wagefixingcartel-bluesky wagefixingcartel-bluesky
Artist RightsPixar

New Evidence Emerges of Wage-Fixing by DreamWorks, Pixar and Blue Sky

wagefixingcartel-bluesky

The wage-theft scheme operated by major American animation studios continues to grow with no end in sight. Yesterday, the three existing class-action suits against the studios filed earlier this fall were combined into one sprawling 34-page complaint.

The amended complaint implicates Jeffrey Katzenberg’s DreamWorks Animation as playing a much larger role in the conspiracy than previously assumed, and also presents evidence that Connecticut-based Blue Sky Studios of Ice Age and Rio fame was working in collusion with the other studios.

The accused studios, among them Pixar, Lucasfilm, ILM, DreamWorks Animation, The Walt Disney Company, Sony Pictures Animation, Sony Pictures Imageworks, Blue Sky Studios, and Imagemovers, “secretly agreed to work together to deprive thousands of their workers of better compensation and deny them opportunities to advance their careers at other companies,” according to the filing.

Demanding a jury trial, the complaint was filed by lawyers at a trio of law firms: Daniel A. Small of Cohen Milstein Sellers & Toll, Steve Berman and Ashley Bede of Hagens Berman Sobol Shapiro, and Marc Seltzer of Susman Godfrey. Northern California District Judge Lucy H. Koh, who proved resilient against technology corporations during the High-Tech Employee Antitrust Litigation, has also been assigned to handle this case against the animation studios. She was wrangled into the dispute after lawyers for Robert A. Nitsch, the first artist who filed suit, suggested that Koh take the case due to its relation to the earlier High-Tech litigation.

Mark Ames at Pando has written another excellent must-read piece summarizing the “bombshell new material” in the amended filing:

  • The wage-fixing conspiracy spread across the VFX industry earlier than previously reported.
  • DreamWorks Animation’s role in the wage-fixing conspiracy was more far-reaching than first reported.
  • Pixar kept a list of competitors with which it had secret non-solicitation agreements.
  • New evidence of Blue Sky Animation’s participation in the collusion

The new filing maintains that Ed Catmull was the godfather of the scheme along with his co-conspirators Steve Jobs and George Lucas. However, we’re beginning to learn the extent to which other studios besides Pixar and Lucasfilm participated in this scheme to artificially suppress the wages of animation workers.

Steve Jobs, it turns out, may have personally brought Jeffrey Katzenberg into the conspiracy. New evidence also suggests that while Pixar and DreamWorks may have competed at the box office, screwing over their employees represented an apparent convergence of interests for both companies:

[W]hen a new contract recruiter at DreamWorks contacted a Pixar employee in March 2007, Catmull wrote him to explain their understanding: “While we do not act to prevent people from moving between studios, we have had an agreement with Dreamworks not to actively pursue each others employees [sic]. I have certainly told our recruiters not to approach any Dreamwork [sic] employees.” Pixar’s Vice President of Human Resources, Lori McAdams, wrote to Catmull that she “know[s] [Dreamworks’] head of HR Kathy Mandato well, and she’s in agreement with our non-poaching practices, so there shouldn’t be any problem.” McAdams checked with Mandato to make sure there was “no problem with our past practices of not poaching from each other,” to which Mandato replied “Absolutely! You are right . . . (my bad).”

DreamWorks was similarly committed to enforcing the anti-solicitation scheme against other studios. For example, Mandato asked Pixar not to solicit DreamWorks employees when a recruiting email was sent to a DreamWorks employee by mistake. McAdams’ response: “Argh, it shouldn’t have gone to anyone at work or our competitors people [sic]. I’ll put a stop to it!”

Pixar’s human resources v-p Lori McAdams, who is mentioned above, pops up repeatedly in the new filing. In an early 2007 email, she wrote to her competitors at Sony Pictures Imageworks, ILM, DreamWorks, Disney, and Blue Sky, telling them “[c]hatting with all of you each day is really becoming a fun habit. I’m thinking it’d be a great resolution for 2007 that we all just have a short conference call each morning to start our days off right.” It’s unconscionable when you realize why she was chatting with these competing studios, not to mention that such actions potentially put her in violation of American laws, like the Sherman Act and the Cartwright Act.

As the lawyers representing the animation workers conclude::

No studio acting in its own independent self-interest in the absence of a conspiracy to suppress compensation would share this kind of compensation information, let alone with such a large group of competitors. Absent an agreement not to compete on compensation, any studio sharing such information would be handing its competitors specific information about how to best compete with them for employees and candidates. Such behavior only makes sense in the context of a conspiracy to suppress compensation.

The entire complaint which is embedded below offers countless more details about the actions of the studios:

  • Well, as a college student studying animation and getting ready to hop into the industry in a couple years, this sucks. This leaves me wondering how this will impact the job market in a few years, especially depending on how the lawsuit ends.

    • James VanDam

      Recently graduated* I hear ya.

    • ReindeerFlotilla

      If you want to worry, worry about H2B immigration caps being expanded greatly or dropped entirely by executive order.
      = Katzenberg arts medal.

    • I know, right? I’m an art student too and about to graduate in February. Reading about stuff like this is such a downer, especially when you’ve always wanted to work for these companies.

  • James VanDam

    Interesting theory.

  • Harrison

    I kind of hope that’s the case. That way when these idiots hopefully get arrested, the new people in charge can open up to more traditional possibilities.

  • Mister Twister

    So… everyone is in on this? Everyone is evil? Is this the end of the world?

  • Toonio

    Blue Sky now? Really? They were quite sub par when Pixar and Dreamworks were in their prime. All I can think of is a sort kind of pre emptive move knowing that in time they would get somewhere.

    Wonder where is 60 min in all this, I know 20/20 won’t touch this because of well known reasons. But the Public in general really should learn about this modern day exploitation shennanigans.

    Now what really surprises me is learning that George Lucas was that dumb in joining a band of mobsters on top of being a mediocre director. How low can one go indeed.

  • Revy

    Not sure if it’s directly related to the wage fixing scandal, but I’ve long suspected a conspiracy against 2D for the reasons you stated.

    Throwing that most recent Winnie the Pooh film up against the latest Harry Potter on opening weekend was such an obvious “we don’t care how this flick does” move by Disney. I know Pooh would never draw BIG money, but against Potter?! Yeesh, it’s like putting Justin Beiber in the ring with Brock Lesnar (which, as an aside, I would gladly pay to see)

    Conspiracy or not though, 2D is dead among the major studios. If it comes back, it will be from a small/independent house that no one suspects. And it will have a great story.

    Because if nothing else, the feature studios today seem to have a conspiracy against good stories.

  • InconvenientWalrus

    This really irks me. Why is it always the creatives that get shorthanded in a lot of these industries? These companies would be NOTHING without them. The artists are their most valuable assets, and yet they treat them like costs/headcounts/machines. The artists put the bread on Ed Catmull’s table, and he and the other suits give them crumbs.

    • Axolotl

      I had a (Russian, I think) friend who explained that in any business, you have people who want to do good work, and people who want to do business-y shit. The people who want to do good work have to work with one hand and fight off the business people with the other hand. So the business people get to fight with two hands, and naturally win.

      It makes one want to stay home and troll CB all day.

    • Alex

      That reminds me of a scene from The Wire

      https://www.youtube.com/watch?v=xyg_v7Vxo4A

  • Pedro Nakama

    Are all of these HR/Recruiting people still working? I’ve noticed on some of the job boards in the last few months there’s been a lot of hiring in those departments at most of the companies named here.

  • William Bradford

    NOW please don’t quote this as defending the cartel.

    BUT If I may play devils advocate for a moment, I understood the budgets for Features Films of late was getting so high that even the successful films are barley turning a profit. It seems to me wage fixing was going to have to happen sooner or later. GRANTED, I understand the people involved in the cartel were pocketing millions for themselves. I WOULD have been nice if they’d shared that with all their employees: but it seems to me that when films are getting into the 200 mil brackets, a few extra mill the tops guys pocket, however ROTTEN that is, is a small issue compared to the industry being unable to sustain itself financially.

    I KNOW that’s not a popular thing to say, but surely constantly raising everyone’s salary will just raise the cost of the films, thus making it harder and harder to afford local talent?

    GRANTED this statement would be a lot easier to say if I new guys in charge of the cartel weren’t scraping a little extra off the top… if they put that all back into the projects and the studio so they could keep it running and maybe try some bolder projects I would be ALL FOR them agreeing not to openly lure each other’s employees away with higher wages. BUT while I’m dreaming and all that…

    • ArtB

      Of course a business needs to watch its profits and budgets and certainly is under no requirement to pay more or offer raises, etc. What they CAN’T DO is WAGE FIX as a group with competing businesses! That’s ILLEGAL! Obviously it simply seems like good business practice to them and one can see why, but you cannot DO that! And don’t believe for a second that official studio accounting is what it seems to be. Those budgets aren’t inflated by employee wages alone. Massive studio overhead(which includes the salaries of all kinds of “management”)are figured into those “budgets”.

    • Abel Salazar

      I get your point Will, I’d just say that you can’t extrapolate a conclusion based on grade school economics. Especially when companies (hi Dreamworks) can create millions based solely on speculation.

      Basically, things are complicated. What they did is complete shit. Films don’t cost as much as they say although that money does disappear at the end of the day. Neat trick huh?

      Here’s a quirky thing to look out for. When a film destroys at the box office, why do companies hold of on releasing production cost? Look at what happened w/ Guardians of the galaxy. The budget ballooned over the weekend. Huh. strange right? All estimates and sources from the studio placed it’s budget at 120 million. Box office mojo lists it final “actual” production budget at 170 millon. hmmmmm….

      Film econs are a strange and wondrous beast, artist aren’t usually the beneficiaries of that trickery and magical accounting so just, you know, take it down a notch.

    • Peter Shakes

      “I KNOW that’s not a popular thing to say, but surely constantly raising everyone’s salary will just raise the cost of the films”

      Because ticket prices haven’t been going up too, right?

      Animation artists also have to pay bills, their rents go up just like everyone else’s, of course they should be getting raises!!!
      Also, it’s not like these companies are located in cheap cities either.

    • I have to agree with you, somewhat. I remember hearing in the 90s some top animators getting $5M to work on a film.

      While I think that’s fine if you’re worth it, and some certainly are, the only way I would agree to a wage freeze was if it was known company wide. And also if there was some sort of fair profit sharing for EVERY employee. I livable wage is all anyone asks for, most anyway. But getting a bonus for a job well done is awesome.

    • Ryoku240

      You just took one of my old “devils advocate” posts and re-worded it.

      I should note though, some studios like Sony were able to pay their animators more and skip out on the cartel, the cost? Less big name celebrity voice actors.

      Was it worth it? I dunno, I don’t watch modern films anymore.

    • William Bradford

      HAHA I new I was askin’ for that. I should insist these are NOT my feelings, it’s what impartial people (or people OVERLY partial on the other side) will say .

      And while I find all of the statements above to make perfect sense, they’re not going to sound any less self-interested or bias as any excuses or arguments the culprits in this crime are going to make. This certainly reflects bigger issues of Hollywood status quo screwing, so I REALLY hope it sticks. But to anyone outside the industry, this is basically us complaining about not getting as much money as we potentially could because rich bastards tried to make as much money as they THOUGHT they could get away with.

      And yes, I do have a grade school grasp of economics. I fear if I had a strong grasp of economics, i’d be one of the guys exploiting the situation like they are.

  • Blacklisted

    The continuation of this topic although important is aggravating. Sadly I worked for several of these companies, I signed the class action paper work. And a year later received three hundred dollars, while the lawyers are getting three hundred million. What’s to be done? Have those involved been contacted for comment? I should have been a farmer…they never get screwed over, right?

  • ToScaredToTalk

    I find it interesting that no one seems to be speaking from the front-lines.

    • Contractbased

      If we make any noise in the studio we are not re-hired during the next project and blacklisted from getting a job. :-(

    • ArtB

      That probably means you don’t work on the front lines.

  • ea

    Does anyone outside the animation community care about this? I haven’t read any related headlines on mainstream news sites.

    • mrstupes

      It actually made the front page of reddit, but I doubt the general public cares.

    • Ryoku240

      I doubt it, people only care about the films and their branding, I never hear them talk about the animators.

  • Ryoku240

    As much as I wish people oif my generation would grow a spine,, if every animator stood up and quit or protested their work would be outsourced to a cheaper country.

    And the mass public wouldn’t even notice.

    • Jaaso

      If it was cheaper to outsource, then they’re already do it. ‘Spine’ or no spine.

  • Animator606432

    Well because as an artist you have a special connection to the films that inspired you. Of course creating art in general is awesome, but everyone wears their influences on their selves when it comes to art. Also, remember the great streak Pixar had for quality films a few years back? You wanna be where the “magic” is happening.

  • When you love to do something, it’s natural to want to associated with the icons of that industry. You play football, you want to someday play the NFL. You make R&B music, you someday want to play for Motown (dated ref, I know). There’s nothing wrong with enjoying theses things at home, but for some, it’s the milestone that others they admire have also achieved.

    • K.

      This is super bull, do you really think the people playing in the hardcore punk bands in DC in the 80’s, the hip hop MC’s recording underground mix tapes or graffiti artists covering trains were not loving their things ?
      It’s called DIY, and definitely some of the most inspiring creative people of the late 20th century can be found in the examples above.

      It’s like asking a ambitious cook if he dreams of working at MacDonald’s designing new burgers, Industry wise they sure are icons…

      • Er, who said or even suggested anything of the sort?

  • Animator606432

    The writers guild thing is a perfect comparison to what is happening now. I was only a kid during the Writers Strike, but I kept hearing how the writers were “spoiled” and “lazy” for demanding better wages.

  • Eric Paulsen

    There were 17 people at Sony making OVER $1,000,000.00 in salary per year according to the hacked information. So at a minimum let’s say $17,000,000.00 go to the suits who are producing…? In all reality you could easily double that number and probably still come up short of the actual one so how many standing desks and computers (which are reusable company assets), arcade games (company assets), fountains (CA), sculptures (CA), landscaping (Really? That’s maintenance!), buildings (Again, would you have them do business in the streets? That falls under facilities), free food, and a wrap party. Well, I guess the company loses out on the cost of the food and frivolity of a party for a job well done, all that money going in one end of an animator and out the other with no appreciable benefit to the company. But even if they managed to eat $1,000,000.00 worth of food and had a few thousand dollars worth of fun at the end of a long stressful job… SEVENTEEN people at Sony cost that much or more ALL BY THEMSELVES and I submit to you that they did not contribute 500%+ more work than the animators did. When did America become all about applauding the people who engorge themselves parasitically on the backs of those who do the work? I know we are all supposed to hate socialists like the living dead but when did we all decide to worship the bloated ticks who figured out how to thrive off of the industry of others?

  • Taco

    I can’t down-vote these two paragraphs of diatribe enough. Sorry Mike.

  • PossibleCareerChange

    How would you change the system, so an artist really could create their own path with out corporations? Because I like what you are advocating. As artists rejecting the current corporate system, and creating our own path is great. Finding our own financial success, conducting our own business, follow our bliss–awesome. However, when I do get to this point as a creative working for myself what do I bring to the table (contract, salary, etc.), if a corporation wanted to hire me for my talent. As much I would like to think, that working for myself is great and corporations will appreciate my talent pay my worth(whatever it may be) I have to be realistic. I will eventually will need income to meet the current costs of living and there are clients out there who may like my talent but see only profit and may want to pay me less. What should I say to them then?Since they will most likely be working for small or big business, should I take what they give me or argue for more? I know you may not agree with the comments above or below, but what we are basically arguing for is for better bargaining rights, so if we need to go our own path, they will know what we are worth, we will know what we are worth( benefits, salary etc.).
    Creating just because you like it is great, but eventually you will need an income because bills need to be paid or you may need money for supplies. It is easy to be taken advantage if you don’t what you can ask for? CEOs know what to ask for and expect because everyone around them is doing it? You can get another job or career and keep animating as a hobby. But if you want to have a career and be fulfilled from it like the CEOs mentioned above, then we have to ask for more for the sake of living. They have our time, why not pay the money for it. If you want quality pay for it. It lasts longer. Right?
    Also if corporations and the executives are just like us, are we equal or unequal? Should we be paid for the amount work we contribute, or what they(corporations, executives) think we contribute? Is it fair?

  • Your reading into my comments as if I’m taking sides with executives of these companies, and your apparent viewpoint only seems to allow you to see that there is no choice but to be on one side or the other. Im talking about stepping back and looking at the bigger picture, which is YOU. There is no dictatorship happening. You have a choice to walk away and do something else. If you are unhappy with your job or that your not making enough money, then go find what you really would be passionate about. What excites you. But you guys don’t do that. You sit around complaining on sites like this about how shitty everything is and how your not getting the money you deserve, and you want to blame and protest about a bunch of higher ups you don’t even know or what their actual mindset is (while simultaniously hiding behind your user name so nobody will know who you are).

    Why are you doing this to yourselves? Why not change careers or follow another path related to your career that you like that might actually bring you success. Your all concerned about what other people are thinking instead of yourselves. It’s a waste of a life always fighting for what you think your entitled to instead of just going out and doing what you love. I don’t see any of the leading artists in the industry (people like Glen Keane or Brad Bird) posting on here taking a stand for you guys. They’re too busy following their passion and doing what they love, and they didn’t become successful arguing for wage increases on Cartoon Brew.

    So I guess the question is, what do you want to do? Continue an endless fight and pretend your a slave in a corporate world, or maybe take the path of least resistance and think about what it is you are passionate about and what would make you all the money you’ve dreamed of having. It’s your choice, and either choice is valid.

  • J.S

    Wage fixing..

  • DV

    This is a great education for new talent. Just FYI kids; studios see young artists as the most naive, abusable, and exploitable commodity on the planet. Oil puts up more of a fight to be gotten out of the ground.

    They know this, they rely on it, they say it in private while talking ‘family’ through their HR mouthpieces.

    Also, don’t discuss your salary. That’s tacky.

  • Except a chef would dream of working under a black hat, or for a famous restaurant, or with a famous chef. I referred to the icons of their respective industry. MacDonald’s was a false equivalency. Not even remotely what I said.

  • So… your response is to get angry and hostile with me because I said go do what makes you happy? Do what makes you happy instead of wasting energy complaining about something you really have no power over? Do you really think following your excitement always means you have to go back to college in your mid thirties? I never said that. I never said you had to be a millionaire. I’m not suggesting anything except that you find something in your life that lets you feel good about yourself no matter what your career is.

    And to answer your question, yes, you are drama queens. Why don’t you take action and become a leader to help artists achieve what a fair wage is if that’s what your so passionate about. That is what you want isn’t it? And many of you are complaining that there’s no one higher up putting themselves out there to support your cause. If it matters that much to you, do something about it. Otherwise your just like every other person, going to work complaining your not being paid fairly and joining the club of other bitter angsty artists who want to come on here and hide behind their username pretending their opinion matters in the slightest. This whole cause is something that doesn’t really concern you. The people “doing this to you” has to do with their path in life which doesn’t have anything to do with you. But you choose to believe that it does. If you want to continue wasting your time complaining instead of, I don’t know, doing anything else that might lead to a happy fulfilling life, then be my guest, you have every right to go for it until you burn yourself out.

    If you think I don’t know anything about how life works, then I’ll tell you this. I’m not the one beating his head against a wall trying to break through it. I’d rather find another way around, even if that meant I’d have to stop drawing for awhile, step back from the career I thought I wanted, and find another way of getting what I want…which is to live a happy life, and doing it in a way that’s a fulfilling, satisfying journey. You know that saying right? Life’s about the journey not the destination? Well, if the journey sucks, that’s nobodies fault but your own because you had to insist that there was only one path.

    • Jaaso

      Christ, alot of words from a guy that’s not ‘taking sides’.

      • I was gonna squeeze it all into one sentence, but I’d still probably come off as annoying. :)

  • Yah. It’s just hard to think about someone I look up to doing something like that. BUT! No one said he is, so I’m not worried about Pete Docter doing that. :)

    • KW

      Given his position in the company i doubt he has any direct influence in these sorts of decisions.

  • Yah, I guess. Well, Hopefully that’s not the case

  • James Wade

    ed catmull says “pay my hefty ransom or you will never see your precious 2D animation again”

  • James Wade

    yes it could be