More than 10,000 visual effects workers who were employed by industry heavyweights, including Disney and Pixar, from 2004-2010 could be part of a class action lawsuit that accuses the companies of conspiring to keep wages low.
Former DreamWorks Animation employee Robert Nitsch Jr. filed an antitrust lawsuit against the companies in 2014, following an investigation by the Department of Justice.
Nitsch claims the scheme dates back to the mid-1980s, when Pixar and Lucasfilm entered into a gentleman’s agreement to avoid a bidding war over employees. Between the years of 2003 and 2007 several other companies signed on, according to the suit. In addition to agreeing not to “cold call” one another’s employees, Nitsch claims the companies colluded on wage ranges for positions to keep the cost of labor low.
The defendants are Blue Sky Studios, DreamWorks Animation, Two Pic MC, Pixar, Sony Pictures Animation, Sony Pictures Imageworks and The Walt Disney Company (although Blue Sky and Sony have already reached settlements with the plaintiffs.)
On Wednesday, U.S. District Court judge Lucy H. Koh certified the class, which is a big win for plaintiffs.
The class is defined as: “All animation and visual effects employees employed by defendants in the United States who held any of the jobs listed in Ashenfelter Reply Report Amended Appendix C during the following time periods: Pixar (2004–2010), Lucasfilm Ltd., LLC (2004–2010), DreamWorks Animation SKG, Inc. (2004–2010), The Walt Disney Company (2004–2010), Sony Pictures Animation, Inc. and Sony Pictures Imageworks, Inc. (2004–2010), Blue Sky Studios, Inc. (2005–2010) and Two Pic MC LLC f/k/a ImageMovers Digital LLC (2007–2010). Excluded from the Class are senior executives, members of the board of directors, and persons employed to perform office operations or administrative tasks.”
Defendants argue that about half the members of the proposed class are subject to releases or arbitration agreements that would preclude a lawsuit, but Koh finds that an animator being subject to an agreement with one of the defendants would not stop him or her from taking action against the other defendants.
While certifying a class does not require an analysis of the merits of the lawsuit, Koh writes that plaintiffs have offered a “copious amount” of evidence that defendants “entered into express agreements not to compete for one another’s employees and to coordinate compensation policies.”
Koh also noted that it appears the companies changed tactics after the DOJ started checking into their policies.
“The documentary evidence tends to show that after the DOJ began its investigations in 2009, Defendants began to resume directly recruiting from one another,” Koh writes. “By resuming direct solicitation of each other’s employees after the dissolution of the alleged conspiracy, Defendants implicitly demonstrated that direct recruiting was a valuable tool that Defendants would have engaged in but for Defendants’ anti-solicitation agreements.”
In an earlier order, Koh established that the class-wide lawsuit is not subject to the statute of limitations, as plaintiffs have sufficiently pled that the companies “fraudulently concealed the alleged conspiracy.”
Plaintiffs attempted to expand the class definition to include activity prior to 2004, but they did not amend their complaint to reflect the change. Koh denied class certification to employees whose claims arose between 2001-2003, but will allow Nitsch to amend his complaint.
Now that a class has been certified, it wouldn’t be surprising if the remaining defendants followed the lead of Sony and Blue Sky and struck a settlement.