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Disney and DreamWorks May Have Been Part of Illegal Pixar/Lucasfilm Wage-Fixing Cartel

Tech site Pando Daily has been providing amazing coverage of the Department of Justice antitrust invesigation and subsequent class action lawsuits over wage-fixing amongst Silicon Valley tech companies and animation studios. Described as the largest wage-fixing cartel in American history, it’s the story of how some of the most powerful figures in tech and entertainment, including Apple’s Steve Jobs, Lucasfilm’s George Lucas, Pixar’s Ed Catmull, and Google’s Eric Schmidt, conspired to illegally manipulate and suppress the wages of their employees.

In Pando’s most recent piece by Mark Ames, the discussion turns to the animation studios, which have not been covered as heavily throughout the scandal as some of the tech companies like Google, Intel, and Apple.

The major point that Ames makes is that the illegal wage-fixing extended far beyond the primary players, Pixar and Lucasfilm. Through the deposition testimonies of George Lucas and Pixar president/co-founder Ed Catmull, there is evidence that other studios like Walt Disney Animation Studios and DreamWorks/PDI participated in the illegal activities to keep their employees’ wages unnaturally low. The Walt Disney Company has emerged as a central figure in the scandal, especially now that they own both Pixar and Lucasfilm, and it should come as no surprise that as they worked to pay their employees less, their stock prices and profits shot to all-time highs.

Pando Daily has promised another story soon about how Catmull attempted to get Sony Pictures Imageworks to join the wage-fixing cartel.

  • Toonio

    Hopefully karma will be served. Top Pixar hats made a lot of cash out of the Lucasfilm and Disney deals, leaving all the workers that made it possible in the dust.

  • Ummm….. No Duh. :)

    I know for a fact Dreamworks has been doing it, pretty much from the beginning in 1995. They are in constant contact with Disney regarding animators wages. Their official contract instructions from DW Management are to “Keep the animators tied into a contract for as *long* as you can, for as *little* as you can”

    • Adam Ryland

      The entire of a contract is long term employment.

      • Ummm….. No Duh. :)

        I’m guessing you mean the benefit of a contract is long term employment?
        That sounds great… But its not the way it works. At Dreamworks at least, a Contract does *not* project the animator at all. The company can let them go at any time they wish….but the animator must finish his/her term.
        And how beneficial is a long term contract, when you find out the wage you’re being paid is 1/2 that of what you could have been making somewhere else?

        • Marvin

          A personal employment contract means you can’t quit but the company can fire you.

  • IcyTea

    Every business is corrupt at this point.

  • DIS_enchanted

    But these guys are all Democrats, right? I mean I’d expect this from the Koch Brothers and the other right-wing teabagger crowd, but not these guys. Katz’berg is a leading fundraiser for Pres. Obama. Damn.

    • Beamish Kinowerks

      Katzenberg actively campaigned for Arnold Schwarzenegger, whose term as governor of California was about on par with Pete Wilson’s and Ronnie Reagan’s (read: awful for everyone but the very wealthy). He cares about money, not causes.

    • StephaneDumas

      Don’t forget George Soros. ;-)

      But now we have to wonder if a similar situation exist at WB with CN and Viacom with Nickelodeon?

    • AmidAmidi

      This has absolutely nothing to do with Democrats and Republicans. It’s about slimy animation studios taking advantage of their employees. Keep it on topic.

      • Thank you!

      • Bush’s_fault

        Oh, but it does, Amid. This is akin to those cases where a married white congressman is found in a hotel room w/ his gay, black lover and the media, rightfully so, trumpets his voting record on gay and minority based issues. Katzenberg is the main money man in Hollywood for Obama. He hosts the fund raising dinners and is not shy about making his politics known and an open topic of discussion. For Jeffery to be caught doing something like this makes it, along with being a garden variety greed scandal, a political scandal as well.

      • OtherDan

        You are completely wrong Amid. Why would these guys be exposed, and why talk so much about his political contributions if the underlying point isn’t to persecute Obama (Lefty) supporters. I’m certain, this kind of thing-these back room dealings, have been going on forever amongst producers. You’re naive if you think this isn’t primarily political.

        • AmidAmidi

          The investigation was begun by Obama’s DOJ, so he would be persecuting himself. Again, this is not a left/right issue. If anything, he should be given credit for exposing these scumbags.

          • OtherDan

            Then why spend all that time correlating Katzenberg’s political support? It’s a separate issue. Do you think they will ever prosecute these execs for their illegal acts?

  • bobbyflavor

    The stock market is officially broken. When the market rewards those who screw employees out of fair wages, it’s not wages that need to be corrected, it’s the way the market works that needs to be corrected.

    • James VanDam

      We needs modern day robin hood.

    • ReindeerFlotilla

      What has the stock market got to do with it? It is illegal to conspire to fix wages. If the stock market reflects the additional profits made from an unknown criminal enterprise, it isn’t the fault of the market. The stock prices will also reflect the precipitous drop in profitability if Robert Iger and Jeffrey Katzenberg are thrown in the slammer and the companies hit with multi-billion dollar class action suits.

      • bobbyflavor

        It’s more that our regulations of the market are broken. The fines or settlements reached because of this behavior are nothing compared to the profits reaped in the increase in stock value.

        There need to be FAR harsher punitive fines than what’s already given out.

        As for the slammer, remind me how many bankers served time for the 2008 crash.

    • Jack Blackstone

      It’s a racket. Those stock market guys are crooked.
      – Al Capone

  • William Bradford

    I always thought Pixar wasn’t union though: doesn’t that mean they can pay people as low as they want anyway? I always assumed ANY company would potentially pay people less if they can get away with it. Not NICE: but is it really a “conspiracy”?

    • Caitlin Cadieux

      It’s a conspiracy because they conspired with essentially all the powers-that-be in the industry to make sure there was the smallest possible chance workers could increase their own recognized value. It’s not exactly unexpected or unpredictable, no, but it’s a pretty bad move.

    • Scott

      It becomes a conspiracy when the heads of a variety of different companies all work together and refuse to poach each other’s employees or bid against each other for them. They all agreed to keep wages as low as they could.

      • Jason

        No kidding. It’s hilarious how everyone is anti union when corporations unionize like crazy!

        • William Bradford

          That’s all it is? They agree not to deliberately poach from one another so nobody would have to bring the wages up? That sound more like a truce then the scam. Now, does the report suggest feature animators are insufficiently paid? Or just not paid the amount the potentially COULD be paid?

          • Doconnor

            For the free market to work the way it is supposed to, there can be no truce. Imagine if Coke and Pepsi decided to have a truce and double the cost of pop.

          • Maharg

            Do you understand what price fixing even means?
            These studios actively worked against the “Free market” to suppress competitive wages increases for higher profit margins. This would have sent ripples of low wages throughout the industry as a whole.
            I have an idea lets make a “Truce” in animation that William Bradford get paid a dollar a month for services rendered. Would that be a conspiracy you think? or maybe just insufficient compensation compared to what you COULD be paid?

          • Jason

            “agree not to deliberately poach from one another so nobody would have to bring the wages up?”
            -That’s basically what a union does on the worker end. So it’s fine if only corporations are allowed to do it? I’m sorry I think I’d rather let the artists dictate what an artist’s worth is instead of ‘truces’ in backroom deals.

            You basically agree to actions like what this article states:http://bgr.com/2014/03/27/apple-google-anti-poaching-scandal/

            I’m sorry if you think the artists deserve less for creating one of the biggest profit creating IPs ever for Disney.

          • mnmears

            Agreed, I think this was a reflexive action taken after Disney Feature Animation was poached during Animation’s Second Golden Era.

            I don’t hear very many animation industry employees complain about their compensation — although they do work long, hard hours. The other main gripe are the numbers hired for a single project and then have to reapply for their next job. That’s just plain bad for morale.

    • Maharg

      What an uneducated argument William. Did you even read the articles?

    • DangerMaus

      Actually, a lot of non-union companies will pay their employees higher in order to keep a Union out. They start to put downward pressure on wages and benefits when they no longer have to worry about a Union coming in and organizing.

  • Well I’m sure they were. Steve Jobs was accused of the same thing and he own Pixar at one point.

    • RCooke

      But those were in the early Days of Pixar, when Catmull and Jobs were busy with insider stock trading scandals.

      • Didn’t know that was going on at the same time. Good info.

  • This kind of news is not only outrageous but really damages respect for these studios. Granted, some knew this more than others, but the point still drives home that worthy animators and other personnel are cheated out of a chance to make a living to help their families.

    It’s becoming more and more ridiculous that these big companies continue to disrespect hard working people who just want to have substantial lives and to continue doing what they love. Utterly, ridiculous.

    • Jack Rabbit

      You can thank the Union that has no teeth.

      • DangerMaus

        A Union is only as strong as its membership. People seem to have forgotten that fact.

        • Jack Rabbit

          Not true. This one never has been, and never will be. That’s why it exists.

      • D. Harry

        You’re right. We could bring this industry to its knees, but the members would have to sacrifice in the short term. I believe the rewards for doing so would be substantial.

        • Jack Rabbit

          Yes, but please rinse and repeat on the above: “It’s becoming more and more ridiculous that these big companies continue to disrespect hard working people who just want to have substantial lives and to continue doing what they love. Utterly, ridiculous.” That big business, and the movie industry doesn’t have to reap the rewards that the Targets and Walmarts and Amazon lobbied our state legistlatures to give up the protections of the workers. Ditto on the trucking industry that is lobbying their drivers to push 14-hour days on the road, the train industry that requires their drivers to work 4 hours on and 4 hours off, etc, etc.

  • Monty McBillionaire

    [Comment removed by editors. Per our commenting guidelines, “It is OK to post with a nickname or alias, but your email address (which we will NEVER share publicly), must be a real, permanent email address. Comments with fake or non-permanent emails will be deleted.”]

  • Beamish Kinowerks

    the man wasn’t perfect (he shot down a cohabitation benefits bill that would’ve extended to all adult couples), but compared to what came next, he was excellent

  • TStevens

    So if the studios are controlling wages behind the scenes, as well as making hired studios work on a fixed bid process, then it would appear that the system is rigged on all ends.
    Part of what I find fascinating is that many of the studios discussed still reside in some of the most expensive areas of the country. Pixar and Lucas could very easily be located in any city in the US but, they stay in an areas like Emoryville where the median home price (based on statistics from Trulia) is $375,000 and San Francisco where its is floating just under $1,000,000 compared to about $213,000 nationally.
    Very few studios are willing to cut the overhead in obvious areas in order to pay artists better. The days of working in industrial complexes are over in lieu of building artist playgrounds on expensive real estate that have cereal bars and high end modern furniture. Unfortunately, many artists are lured by the idea of working for a mega studio that offers them free Cocoa Puffs and the opportunity to work on family friendly films that make more in merchandising than ticket sales. I cam name more than one person who would work on a Star Wars or Toy Story film for minimum wage…

  • Googamp32

    Well, whatcha gonna do? Disney pretty much has the best lawyers in the universe so they’re most likely going to come out of this unscathed. Dreamworks… Well, they were going to go bust sooner or later. Besides, the keyword in this is “MAY”. They “MAY” have been part of a cartel. Also, if this really did happen, one of Disney’s or DreamWorks’ employees would have spoken up about this.

    • DangerMaus

      Well, there is still at least one optimist left in the world.

      • hashaman

        Don’t confuse optimists with a horse running with blinders on.

  • Jason

    You do care about political leanings especially when you cite a right-leaning religious website. Stop trying to turn this into a lazy left/right when it’s Right/Wrong.

    • AmidAmidi

      Thanks for getting us back on course, Jason.

  • DangerMaus

    I wonder if one of Catmull’s favorite books is titled Dr. Strangefixer or “How I Learned to Have Fun Screwing My Employees And Make Millions Doing It”.

    Okay. I know that’s not all that imaginative, but the hell with it.

  • James VanDam

    I hear ya man.

  • Strong Enough

    i wonder how teddy newton feels about this

    • D. Harry

      Teddy? What would he care? He’s over at Paramount these days, and believe me he was taken care of nicely up at Pixar. They do take care of a handful up there – especially Stanton.

      • Strong Enough

        I need Teddy’s input on everything. Even what cereal I eat.

        I still can’t believe he left though. Must of been a sweet deal over at paramount

  • RCooke
  • sidney

    Not even a little surprising.

  • Guest

    This is crushing- between hearing about this wage fixing and Laika being kept afloat by Nike money, it’s like a kick in the chest.

    I’d occasionally look through the internship/other opportunities available at these companies online… but the more I find out about the other side of these companies, I get a little more motivated to try and connect with other enthusiastic and driven people to produce either independent or small studio shorts and feature films.

    I know some people mentioned initially wanting to work at one or more of these companies too (and may also be unsure if they still want to)- if you also felt a kick in the chest reading this news, just remind yourself that your desire and goal of wanting to produce amazing and widely watched work hasn’t changed.

    • Beau

      Perhaps I missed something. What is the issue with Laika being kept afloat by Nike money?

      • Guest

        (Not trying to get off topic)

        There are a few articles regarding Laika, one of which is on cartoon brew that relates how Will Vinton got the boot and Travis Knight got in, and how Phil Knight invested a lot in the company, continues to do so; supposedly a lot of executives from Nike have or are working at Laika, and from reviews on glassdoor.com it appears that working at Laika can be more cons than pros. The films that Laika has produced are truly amazing and refreshing, but reading some of those comments from employees is gutting.

        Granted, Nike isn’t the only company to have used sweatshops and child labor (it just happens to be one of the most high profiled ones) and Nike has made an effort to try and reverse damage that’s been done- although its a little hard to get the picture out of my head that at one point there were kids making Nike products, and part of the money from those products goes into making kids movies.

        Here’s hoping that these companies will listen to current and prospective employees/colleagues- or maybe in this case, the law, and make changes that more morally and ethically responsible.

        • Beau

          I see what you are saying. But if you use that rationale you have to also boycott studios like Blue Sky (owned by Fox and the questionable Newscorp), Sony (owned by an electronics company with lots of off short sweatshops), Reel FX (who is owned by the Fossil watch billionaire with all offshore manufacturing), etc. Every major studio is either owned by a billion dollar corporation, or by a billionaire who made his money building a billion dollar corporation. Unless you want to go work at a small boutique studio with no investors, you aren’t going to find “clean money” funding the major studios. Or at the very least I am sure there will be something controversial about where the money came from. :

    • Leslie

      “…try and connect with other enthusiastic
      and driven people to produce either independent or small studio shorts
      and feature films.”

      That’s my career goal, screw the major studios.

  • Steele

    Sigh…..this is sad and not cool. :(

    • Tim Miller

      Isn’t joining a union just “price fixing” in reverse? Just one person at a time? ;) It’s not legal and a better world would be more fair….. But those companies treat–and pay–their employees well from what I’ve heard–from lots of friends who work there–and at the end of the day THAT is the most important thing. Seems odd to feel sorry for people doing what they love and making salary’s that I’m fairly sure are (on average) probably double the NATIONAL average. I wouldn’t cry for them–they’re a shitload better off than 99.9% of the people on planet earth.

  • bob

    I know how you feel, but welcome to the real world. This industry is a business above all else. This is a terrible thing, but it’s not new, and this type of system rigging is all over the animation industry. I hope one day it’ll be different.

  • iraowens


  • Jacob Boelman

    I bet Michael Eisner is laughing his ass off right now. :(

    • Ken Martinez

      And the tragic thing is he may have very well been right.

  • g0nk

    That pretty much sums up democracy for me.

  • SethBlizzard

    Disgraceful. I remember Steve Jobs talking about working hard and having passion for your company, yet he was involved in this underhandedness as well? The appeal of these companies has vastly eroded in my eyes.

  • Marie

    Tell me again how the CEO’s of American companies work so hard for their millions while the rest of us are too lazy to get rich like them? Oh, that’s right, it’s about cheating.

  • Stacey

    Unfortunately I don’t think you are going to tame this beast…. You force them to increase wages, they will but they will lay off a lot of employees, double and triple the work load of the employees they keep and not to mention further price hikes on admission and merchandise.. Bad press sucks but they won’t pay for it… It’s their employees and fan base that will pay for it…

    • Innistrader

      What basically needs to happen is that the boards of these corporations, and their high-level management; the people responsible for these wage-fixing schemes and their acolytes and associates; they need to be publicly executed.

  • Puddintane

    There’s a reason you don’t hear from the artists…everyone is too scared to speak up.

  • mnmears

    It just reminds me of a segment in “Waking Sleeping Beauty” where some animators talk about the rock-star treatment and offers they were getting as they rode the second Golden Animation wave.

    I know several artists now working at DreamWorks who once worked for Disney and there are probably some cases where the opposite is true.

    I’m a bit torn on this and will admit I need to read some more about the situation. I don’t see this as a political issue but one of POSSIBLE greed.

    So far it seems the studios agreed not to pilfer from one another — or enter a bidding war for some talented artists — but they didn’t stop the individuals from applying to rival studios.

    And, frankly, I haven’t heard too many artists at PDI, Pixar or DreamWorks complain about their compensation. Maybe those who do are quickly laid off or get out of the industry? The number one complaint I hear from today’s artists are the long hours and time away from family — but most love their work.

    • Ant G

      of course you “love” your work. You get to do what most people don’t consider a “real” job, because you “followed your dream”, a concept reinstated over and over in almost all the movies the company you work for have made; and you wander why it’s desperately always been your “dream” to work there, because that company just gets you… and thousands or millions of others who you have to compete with in talent or social ass kissing or both, to trample your fellow artists over and get to work for the man. Once you get in, no matter the treatment, you are just grateful you’re working despite the long hours and now also obvious withheld pay. Because you’re aware of the statistics, majority of art school graduates do not end up in a job related to their studies and majority of artists don’t make a living off of their work, turns out that college tuition just made your hobby super expensive, a hobby you barely have time for with the student loans you have to pay… when “following your dream” goes wrong; the side you never hear about and yet it occurs far more than these success stories. So no one can complain, there are thousands of others who are ready to replace you and tolerate even worse treatment. It’s like a white-collar version of sweatshops.

  • mnmears

    It’s not political leanings … It’s the size of the company and who owns or controls the company. Big isn’t always better.

  • AnimationGuy

    “Power corrupts, and absolute power corrupts absolutely.”

  • Craig Wolford

    Record profits achieved by screwing their employees. Why are so many businesses so willing to hurt their employees? Where is the pride?

  • Ant G

    Which is why they presumably believed they were in the right to do this in the first place. They looked at other countries where the separation between rich and poor is so wide and thought why not mimic that in the US. Most of these CEOs and investors were already raised with money, they have no concept of “climbing a ladder” and the concept of class is ingrained in their heads; their class needs more and more money, others don’t.

    • Innistrader

      When you look at the actual people involved; the ringleader was lifetime exploitationist and confidence man Steve Jobs; who never met anyone he wouldn’t victimize.

      Then you’ve got Lucas; I shouldn’t even need to say anything here but I will: the guy is a hack who takes credit for other peoples’ work by nature of his existence and assumes his own genius is responsible for everything. He never had a moral context divorced from hyperbolic narcissism to begin with.

      It’s obvious the rest of the parties involved were just amoral sociopaths who didn’t need any other motivation than the promise of more money for them.

  • Sigh

    I’m at a loss. My dream has been to work in animation, but after hearing about this and the layoffs at DreamWorks, I’m not sure if it’s worth it anymore.

  • UnNamed

    Well, now this will set up all of them to do exactly what we don’t want them to do. Move and or ship all of the work to Canada( maybe ), India, China, or some other third world country. What work was left in the states that was animation or VFX, should be considered history.
    The door is now wide open for them to take all the work overseas. Congratulations. You job of that measly $45 to $52 an hour is gone.

  • Elizabeth Radley

    My fiance worked in Disney Australia and he can tell you he got slightly more money working hard hours as he did when he was jobless living on the dole. It’s a good thing he’s good at his job and found work before they closed Disney Australia down for good and he had to wait in long lines to compete with all the other people who just got done doing Brother Bear 2. Just ask him what the industry was like before India started hacking their prices to compete with the real players.

  • ThatGuy

    Pay your employees what they’re worth you stingy Mc-Stingersons

  • Flatwood

    Now that I think about it, I wonder if there’s a correlation between the pent up hatred animators have for Steve Jobs and the recent trend of Jobs-type villains in animated works. The most notable example I can think of is Cloud With a Chance of Meatballs 2, but I’ve been seeing this archetype a lot of more recently. Maybe they were trying to tell us something…

  • Flatwood

    Now that I think about it, I wonder if there’s a correlation between the pent up hatred animators have for Steve Jobs and the recent trend of Jobs-type villains in animated works. The most notable example I can think of is Cloud With a Chance of Meatballs 2, but I’ve been seeing this archetype a lot of more recently. Maybe they were trying to tell us something…

  • David Webb

    That’s a bit naive, don’t you think? Isn’t it reasonable to think that ties to Obama and other liberals is why this story hasn’t/ didn’t make its way into the mainstream news?

    I never heard a word of this before reading it on this site! I would think ties to Obama and the “news” networks would have something to do with keeping this scandal quite!

  • Mystery X-Files