Breaking: ‘The Tiny Chef Show’ Stop-Motion Studio Factory Transmedia Declares Bankruptcy

As stories of toxic and abusive work environments frequently make the rounds in the animation industry, it’s more important than ever for animation workers to know their rights as employees in the workplace.

The U.S. Congress and the many state legislatures have all passed several laws touching on the relationship between an employer and an employee. While the following doesn’t try to be a comprehensive study of what an employee’s rights might be, it hopefully gives a general overview of what American federal law recognizes as an employee’s rights while working in the U.S.

Employee or Independent Contractor?

The first thing to know is that because most of these laws protect only employees, you need to determine if you are classified by your employer as an employee or as an independent contractor. If you are an independent contractor, then only the contract you negotiated with the studio protects you. Federal and state employment law generally does not cover independent contractors.

Importantly, just because a studio may classify an artist as an independent contractor, that does not automatically settle the issue. Whatever the employer might say, in court, it is ultimately up to a judge or jury to decide.

Depending on what law is at issue, judges use a couple of different methods to determine whether a worker is actually an employee. Both methods examine how much control the employer has over the worker, such as deciding what equipment to use and how the worker is paid (independent contractors typically get a flat fee, for example). One test also tries to take a more holistic look at the worker-employer relationship by examining how permanent the relationship is between the worker and the employer, and how much the worker invested in facilities and equipment. If the worker did not need to invest in equipment, it is more likely the worker is an employee rather than an independent contractor. After all, an independent contractor is independent, and has greater need of his or her own equipment.

Remember, too, that what a federal judge might rule under federal law might differ from what a state judge might rule under a state employment law. In May 2018, the California state Supreme Court adopted a new test to determine whether an “independent contractor” is actually an employee. That test looks at how free the worker is from the control of the employer while working, whether the worker and the employer both do the same kind of work, and whether the worker is independently established and doing the same kind work for others. Although it’s too soon to be sure what effect this new test will have, early reactions predict significant consequences for the so-called gig economy, where independent contractors do part-time or short-term jobs for companies but have not been classified as employees. Artists, familiar with the way the animation and vfx industry hires and fires based on immediate production needs, might be affected as well.

Although only the employee is protected by federal employment law, all is not lost for the independent contractor. For example, the employee does not generally keep the copyright to work created for an employer – whereas the independent contractor typically does (unless, of course, the contract between them provides otherwise).


Unions developed in large part in reaction to the Industrial Revolution, as society transformed from an agricultural foundation to an industrial one. Industry of course resisted unions, and in certain cases, striking workers were even prosecuted as criminals conspiring to raises wages.

In 1935, Congress passed the National Labor Relations Act, also known as the Wagner Act, firmly establishing protections for the right to collective bargaining – meaning, labor unions can negotiate with a company’s management on behalf of its members for better wages and working conditions.

The law also created the National Labor Relations Board, which enforces the law, and prohibits employers from interfering with unions, from retaliating against employees who join unions, and from refusing to negotiate with a legally-constituted union authorized by its members to negotiate with the employer.

By the mid-20th century, one-third of the American workforce were members of a union. Today, however, only one-tenth of the workforce are union members, and only a small percentage of the animation industry is unionized. None of the visual effects or gaming industries are unionized.

Nonetheless, efforts are underway in both North America and Great Britain to change this dearth of union representation. In the U.S., IATSE, one of the major unions in the entertainment industry, representing editors, designers, and makeup artists, among others, has posted online arguments for unionization in the visual effects industry and promises “to assist working people in the visual effects industry [to] speak together to make their working lives better.” Such union communications suggest there are workers within visual effects studios attempting to organize their shop as a union. Because of the sensitivity of the issue, however, employee organizers often seek to maintain anonymity.

In the U.K., too, ongoing unionization efforts led by visual effects artists at argue the benefits of the BECTU media and entertainment union, which already represents over 40,000 workers in the British broadcasting, film, theater, and television industries. Notably, the effects artists point to the benefits of American animation artists represented by IATSE’s Animation Guild as inducement for union representation for British visual effects artists.

Meanwhile, in Vancouver, Canada, a band of animation artists have formed the Art Babbitt Appreciation Society to make the case for unions and prevent situations similar to what happened to workers on the animated feature Sausage Party.

These workers recognize that they cannot depend solely on the government to protect their rights and believe that together they are stronger than they are individually. Employers, naturally, argue that the increased costs in meeting union demands imperil employment. But at a time when American unemployment is at historic lows, such arguments perhaps hit with less force than before.

Termination and unemployment

Underpinning employer-employee relations is what’s known as the at-will rule: either the employee or the employer may terminate employment at any time and for any reason, unless they have agreed otherwise, so long as doing so doesn’t break any other law (such as discrimination laws).

So what laws might an employer break? While states have their own laws, the U.S. Congress has also passed significant laws governing employer and employee relations.

The Civil Rights Act of 1964 prohibits discrimination and retaliation based on race, color, religion, sex, and national origin – but applies only to employers of 15 or more people. Termination, then, by such an employer and for reasons based on such discrimination is against the law.

The Age Discrimination Act of 1967 added age to the list of protected categories, and the 1990 Americans with Disabilities Act did likewise for those qualified persons with mental and physical disabilities.

Along with prohibitions against certain kinds of discrimination, employers may not terminate an employee “in violation of public policy.” These prohibitions are typically state laws, rather than federal, and generally protect employees in four situations: (1) refusing to commit an illegal act; (2) exercising a statutory right (such as claiming worker’s compensation); (3) completing a public obligation such as jury duty; and (4) blowing the whistle on employer wrongdoing.

If you are terminated, and you don’t have any of the above claims against your employer, then you likely will want to apply for unemployment insurance benefits.

The Social Security Act of 1935, in addition to creating Social Security, established unemployment insurance. The law imposes a tax on employers, taking a percentage of each covered employee’s wages, and the federal government then sends that money back to state-run unemployment insurance programs. This allows the federal government to require states to meet certain standards to receive the funds – standards such as a prohibition from denying benefits because of a pregnancy, and from paying benefits to undocumented, unauthorized workers.

Not all unemployed workers are eligible for unemployment insurance benefits. Different states may have different requirements. Generally, recently-unemployed workers are ineligible for benefits if, among other things, they leave their employment by choice, if they were terminated due to their own willful misconduct, if they are only part-time workers, or if they no longer are searching for new work.

The reasoning behind providing unemployment benefits was to help workers search for new employment that utilized their skills and experience, rather than forcing a laid-off worker to take the first available job for financial reasons.

In 1988, recognizing the advance of technological changes in industry, Congress passed the Worker Adjustment and Retraining Notification Act, or WARN, which requires employers of 100 or more full-time employees to provide prior notice of mass layoffs of at least 60 days. This gives the employees a chance to prepare and to perhaps retrain for a new position.

For the recently unemployed, in addition to government assistance, the contract between the employer and the employee may also address termination and unemployment rights. Jason MacLeod, business representative at the Animation Guild, told Cartoon Brew that all the contracts their union negotiates provide for some form of severance or dismissal pay. Guild members also maintain a Training Fund to help defray costs for skills training, and the Guild offers its members further assistance in skills training by connecting members to state funding and partnering with educational organizations.

Minimum wage and overtime

In 1938, Congress passed the Fair Labor Standards Act (FSLA), which prohibited child labor, established a minimum wage, and requires that employers pay overtime after 40 hours a week. The minimum wage has been amended many times over the years, too, and the real devil is in the details – namely, the exceptions to the rules: child labor is allowed for actors, for example, and employers do not have to pay overtime to administrative, executive, or professional employees, nor to employees who load or pack seafood, among other examples.

The current federal minimum wage is $7.25 per hour – but many states and counties have their own standards. California’s minimum age, for example, is $12 per hour for 2019, and will increase by $1 per hour each year until it reaches $15 per hour in 2022. New York’s minimum wage is currently $11.40 per hour, increasing by 70 cents per year until 2021, and then by the rate of inflation until it reaches $15 per hour.

Not all employees are covered by overtime rules. In fact, the FSLA effectively exempts animators and other creative artists by excluding professionals whose work “require[es] invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.” Likewise, California exempts professional motion picture employees from overtime and minimum wage requirements.

Family and medical leave

The Family and Medical Leave Act of 1993 protects certain employees who must leave work for an extended period due to childbirth, adoption or foster care, or to care for themselves or a spouse, child or parent with a “serious health condition.” Where the leave is taken to care for a new child, the leave must be completed within twelve months of the child’s birth, or of the child’s adoption or placement for foster care. The employee cannot lose any accrued benefits, such as health insurance, life insurance, sick leave, or pensions due to taking the leave (and health insurance must be maintained during the leave, though, if the employee fails to return to work after the end of the leave, the employee may be required to reimburse the employer for premiums paid during the entire leave). Upon returning to work, the employee is entitled to the same or similar position with the employer as was held prior to the leave.

However, this law only covers employers of 50 or more employees (based on 20 or more workweeks of the current or preceding calendar year). And only employees who have worked for the employer for at least 12 months, and for at least 1,250 hours during the previous 12-month period are eligible.

Harassment and discrimination

Despite what the behavior of certain Hollywood powers-that-be might suggest, employees have the right to be free from sexual harassment. The 1964 Civil Rights Act prohibits discrimination on the basis of sex (among other categories), and in 1976, the federal district court for the District of Columbia held, in Williams v. Saxbe, that sex harassment qualified as sex discrimination. The U.S. Equal Employment Opportunity Commission is charged with enforcing the law in this area, and that agency states sex harassment includes “unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.” The agency points out, however, that harassment “can include offensive remarks about a person’s sex,” but “simple teasing, offhand comments, or isolated incidents that are not very serious” are not prohibited. Nonetheless, if the harassment is so frequent or severe so as to create a hostile workplace environment, or if the employee’s position at the company is affected in some way, such as a demotion or even a firing, then the employee may have a claim.

Importantly, both the harasser and the employee can be either male or female, and the harasser can be a supervisor, a co-worker, or even a client or customer.

The 1964 Civil Rights Act additionally prohibited discrimination on the basis of race, color, religion or national origin. In 1967, Congress passed the Age Discrimination in Employment Act, prohibiting discrimination in hiring, promotion, wages and termination against those 40 years old or older, and in 1990, Congress passed the Americans with Disabilities Act, prohibiting employers with 15 or more employees from similar discrimination against those with disabilities, which the law defines as those with physical or mental impairments that “substantially [limit] one or more major life activities.”

Intellectual property

Intellectual property rights to employee creations and inventions, including copyrights and patents, are generally considered the property of the employer rather than the employee.

Where the work includes artistic and literary creations, the “work made for hire” copyright doctrine says that where an employer hires an employee to create a certain work, the copyright belongs to the employer. So character designer Bob Givens, despite designing Bugs Bunny, had no copyright to his creation – Warner Bros., his employer, does.

Similarly, for more scientific inventions, such as, for example, a multiplane camera or a realistic surface simulation in computer animation, the patent belongs to the employer – so, for these examples, Disney or Pixar rather than Bill Garity, or Anthony David DeRose and Michael Kass.

Employees hired to invent a specific invention or solve a specific problem have what is known as a duty to assign the patent to their inventions to their employer. A patent is similar to a copyright, in that it confers exclusive rights to the party holding it, but applies to inventions, rather than artistic or literary works, and lasts only twenty years (copyright currently lasts for the lifetime of the creator, plus another seventy years).

Despite these doctrines conferring rights to an employer, in law, there is always an argument to be made, and so courts will look at whether an inventor is actually an employee of the company, and whether the invention was created within the scope of employment – that is, was the employee hired to invent this specific item? Also, was it invented on the inventor’s own time? Did the inventor use the employer’s equipment or materials? These factors will help determine what rights an inventor has to his or her invention.

For these reasons, and to avoid confusion and conflict, employers frequently include an assignment provision or a release in their contracts with certain employees, whereby all rights to their inventions and creations are assigned or released to the company. As Phil Tippett told Cartoon Brew regarding the development of the famous go-motion technique used in The Empire Strikes Back, “We all signed releases for whatever we invented…and George [Lucas} footed the bill.”

Even if the employee manages to retain the patent, companies will often have what is known as a “shop right” – the right to use the invention despite the employee owning the patent.

Because the “work made for hire” and “duty to assign” doctrines apply to employees, however, independent contractors retain their rights to their work (except where their contract with the company says otherwise). Companies will often include an assignment provision in their contracts whereby all rights to their inventions and creations are assigned to the company.

Privacy and GINA

First, it should be stated that for employees and independent contractors bother, best practices is to avoid using employer-owned or employer-provided equipment, such as computers, for personal communication, or browsing social media, or other activities not related to work. If nothing else, you will someday likely leave your position at the company, but the company will retain your computer. What you did on that computer will then be in the hands of your boss, for as has been proven again and again, the internet is forever, and nothing electronic ever seems to be truly deleted.

With that said, even conscientious employees must rely on what is known as tort law to protect their privacy rights when working for a private employer. (Public employees fall under different protections).

Four different invasion of privacy torts are generally recognized by the courts: (1) intrusion upon an employee’s seclusion; (2) false light; (3) appropriation of name or likeness; and (4) giving publicity to private facts.

Intrusion upon seclusion is the primary issue where employee privacy is concerned. Generally, where an employee has a reasonable expectation of privacy, such as a locker, phone calls, emails, and computers, then an employer is prohibited from invading such spaces. However, to protect themselves, employers often issue employee handbooks that expressly state emails and other electronic communications are controlled by the employer – thus making an expectation of privacy by the employee unreasonable. Courts have also found that employees have no reasonable expectation of privacy when sending emails on company computers.

Additional laws, such as the Wiretap Act, which bans employers from listening to an employee’s phone calls without at least one of the parties’ consent, and Electronic Communications and Privacy Act, which bans the interception or disclosure of electronic communications, provide additional protections. However, certain exceptions apply, such as allowing for employers to monitor computer use.

Finally, in 2008, President George W. Bush signed the Genetic Information Nondiscrimination Act, or GINA, which prohibits employers from discriminating based an employee’s genetic information. It is the twenty-first century after all.

Brian Gabriel

Brian Gabriel is a writer covering legal issues for Cartoon Brew.