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WME Files Antitrust Suit Against Writers Guild, Citing ‘Unprecedented Abuse of Union Authority’

Cynthia Littleton

WME filed a federal antitrust lawsuit against the Writers Guild of America on Monday, accusing the guild of engaging in an illegal group boycott in its campaign to prevent talent agencies from collecting packaging fees.

WME’s complaint against the WGA West and WGA East accused the unions of conspiring to unreasonably restrict competition by implementing its Agency Code of Conduct in April. The battle between the WGA and Hollywood’s largest talent agencies led to thousands of film and TV writers firing their talent agents in April. The WGA filed its own lawsuit against WME, CAA, UTA and ICM Partners, seeking to invalidate packaging fees under California state law.

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WME asserts that the WGA has engaged in a “concerted refusal to deal” that violates the antitrust exceptions in federal law that are offered to collective bargaining organizations. WME is seeking an injunction on the WGA’s enforcement of its Code of Conduct as well as undetermined damages.

“[T]he boycott to enforce their unlawful bans is nothing more than a ‘power grab’ masquerading as a legitimate exercise of union authority,” the lawsuit states.

The complaint contains an extensive defense of packaging, whereby agencies collect fees from producers in exchange for assembling actors, directors, and writers to work on a project.

“Without packaging, some shows and films would never have been produced, and the writing opportunities these productions create would never have existed,” the suit states. “Many writers have hired WME because of its packaging services. Writers want to benefit from meeting with, and being paired with, in-demand directors and actors. The ‘package’ of talent often enhances demand for the writer’s script and services and leads to the production of TV shows and movies that would not otherwise get made.”

The WGA argues that packaging represents a conflict of interest, as the fees incentivize agencies to represent the interests of employers ahead of those of their own clients. In a statement, the union said the WME suit has no merit.

“History repeats itself,” the guild said. “In 1975, the William Morris Agency sued the Guild for antitrust violations in response to the WGA’s campaign to prohibit packaging fees. A federal judge made an initial ruling in the WGA’s favor. There is no merit to WME’s lawsuit, and the Guild will not be bullied into a bad deal.”

WME’s litigation against the guild comes four days after the WGA ended negotiations with the Association of Talent Agents over the new rules the guild has sought to implement to ban the practice of agencies receiving packaging fees from production entities.

WME asserts that the WGA’s effort to ban a practice that the guild expressly allowed for more than 40 years amounts to an abuse of its power as a union.

“We took today’s step with careful consideration,” WME said in a statement. “The WGA negotiating committee has made it clear both through its legal action and unwillingness to negotiate that it was never interested in making a reasonable deal. We are now left to seek a legal remedy for this dispute.  While we wish we were not in this position, we will not capitulate to a leadership group that limits the choices and opportunities available to our clients, and has made repeated attempts to undermine our business.”

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