Agencies Warn Writers Guild That Its Plan to Enlist Managers as Agents Is Illegal

Getty/WGA/ATA

Negotiations appear to be touch and go.

In a move that appears to signal declining hope for a deal between the Association of Talents Agents and the Writers Guild of America, lawyers for the ATA sent a letter Friday to the WGA warning the union that its “purported delegation” of agent-like power to managers and attorneys violates state law.

That delegation came in a March 21 open letter from the guild that delegates to managers and attorneys the power to procure employment and negotiate terms on behalf of individual writers. But as the ATA lawyers’ letter points out, those powers are reserved under state law to agents, not the guild or managers or attorneys.

“We write to advise you that the WGA's purported delegation violates both California's Talent Agency Act and New York's General Business law, and to demand its immediate retraction,” says the letter from Latham & Watkins’ Marvin Putnam. “The ATA considers any and all unlawful procurement entered into at the behest of the WGA to be unfair and unlawful competition that will harm the ATA and its member agencies. … ATA will take appropriate action as needed, against any person engaged in unfair competition, to protect the lawful interests of its members.”

After this story posted, the WGA responded, “The Guild stands by its action in lawfully delegating the authority it has as the exclusive representative of writers under federal law. The agencies are attempting to intimidate attorneys and managers to stop them from performing work they routinely do.”

Separately, The Hollywood Reporter has learned an additional detail of the agencies’ proposal Thursday to the WGA. It was reported that the agencies had proposed to share a portion of packaging fees with writers, but the exact amount to be shared was not disclosed. THR has learned that the proposal is to share one percent of packaging fees with writers.

Although that is a small percentage, the agents are likely leaving themselves headroom to negotiate with the Directors Guild of America and SAG-AFTRA. Percentage residuals may serve as a model: They are always in a 1:1:3 ratio. That is, if the director receives a particular percentage of a producers gross receipts as a residual, the writer share the same amount and the actors share a pool three times as large. Thus, a one percent offer to the WGA implies that the DGA would also be offered one percent and SAG-AFTRA three percent, for a total of five percent paid out.

THR has also learned that the agencies requested to meet at 8:30 a.m. Friday with the WGA, but that the guild was only willing to meet at 3:00 p.m. That will give the parties just nine hours to negotiate before a midnight deadline, at which time the WGA has said it intends to impose a “Code of Conduct” — one that the large and mid-size agencies are not expected to sign, which in turn is expected to lead to the guild ordering thousands of writers to fire their agents. Unless, that is, the parties reach a deal.

April 12, 11:49 a.m. Updated with WGA response.

For more on this subject, visit THR‘s labor page.