Wage-Fixing Scheme Will Cost DreamWorks $50M


     SAN JOSE, Calif. (CN) – Hollywood heavyweight DreamWorks said it’s willing to pay $50 million to settle claims that it colluded with other studios to fix the wages of animators.
     DreamWorks filed a motion for a preliminary settlement in Federal Court on Monday, agreeing to pay a class of animation workers the largest sum to date in a case that implicates nearly all of the studios that create animated films.
     “The settlement here was reached after arm’s length negotiations, drawing on the expertise of informed, experienced counsel who have been deeply involved in this litigation since its inception, and it reflects the risks associated with both parties continuing to litigate this case,” DreamWorks said in the motion.
     The proposed agreement used two previous settlements as a template, both of which were preliminarily approved by U.S. District Court Judge Lucy Koh in early July.
     Blue Sky Studios and Sony Pictures agreed to pay animators and visual effects producers nearly $19 million under the approved agreement. The court stipulated Blue Sky will pay about $6 million, while Sony will pay approximately $13 million under the terms.
     The agreements stem from a 2014 class action brought by Robert Nitsch — who was a senior character effects artist for DreamWorks and a clothes and hair technical director at Sony Pictures Imageworks — claiming major animation studios colluded to fix wages and restrict career opportunities for artists.
     Nitsch was joined by other plaintiffs who said the scheme was essentially industry-wide, with nearly all the major studios conspiring to stifle wages and restrict career opportunities for animators, digital artists, software engineers and other technical workers.
     Pixar, Lucasfilm, Disney and ImageMovers Digital are also named as defendants, but have yet to come to terms on a settlement.
     The studios mounted a fight against class certification, but the settlements began rolling in once Koh agreed to allow plaintiffs to sue as a class.
     Nitsch’s lawsuit mirrors a class action filed against Apple, Google and others in 2010, which claimed their CEOs made “gentleman’s agreements” to restrict competition, and companion wage-setting mechanisms, by not poaching each other’s employees.
     Pixar and Lucasfilm were defendants in that case as well and settled for $9 million collectively last year, but Koh has rejected a $325 million agreement proposed by Apple, Google, Intel and Adobe.
     Nitsch claims the animation studios acted in much the same way as the tech companies, conspiring to deprive artists of “millions of dollars which defendants instead put to their bottom lines.”
     He adds in the lawsuit: “It did so at the same time the films produced by these workers achieved world renown and generated billions in the United States and abroad.”
     Nitsch says the scheme dates back to when Apple founder Steve Jobs bought Lucasfilm’s computer graphics division from George Lucas in 1986 and created Pixar.
     Nitsch says Jobs, Lucas and Pixar president Ed Catmull agreed not to cold-call each other’s employees.
     Neither Lucas, Catmull nor Apple are defendants in Nitsch’s complaint.
     He claims Pixar and Lucasfilm agreed to notify each other when making an offer to an employee, and to not offer higher pay if the employer made a counteroffer. He says Jobs and Catmull spread this kind of anticompetitive agreement throughout the animation industry.
     Dreamworks was founded in 1994 by major entertainment players David Geffen, Stephen Spielberg and Jeffrey Katzenberg and has since made 32 major motion pictures.
     The studio has produced the Shrek, Kung Fu Panda, Madagascar and Monsters franchises, among other hits.
     Blue Sky is a computer animation film studio based in Connecticut. It is famous for making the films “Ice Age,” “Rio” and “The Peanuts Movie.”
     Sony Pictures Animation has a few high-profile films under its belt, including “Open Season,” “Cloudy with a Chance of Meatballs,” “The Smurfs” and “Hotel Transylvania.”

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