Can the Writers Guild Turn a Manager Into an Agent? Probably Not

Writers Guild - H - 2019

The union's move to delegate powers may run afoul of state law related to agencies.

If the Writers Guild of America doesn't come to terms with the major talent agencies by April 6, its members may soon fire their agents en masse. If that happens, the guild is suggesting to its writers that they should ask managers and attorneys to step in to assume the agents' duties. The problem? That maneuver might not be legal.

In an unprecedented move, the WGA issued a letter March 21 authorizing managers and attorneys to substitute for agents. But that letter is legally ineffective, say two attorneys contacted by The Hollywood Reporter, and it won't protect managers and attorneys from the consequences of violating state laws against acting as an agent without a license.

That's because federal labor law doesn't pre-empt statutes such as California's Talent Agencies Act that limit procurement of employment and negotiation of terms to licensed agents, the experts say: What agents do is too far afield for federal labor pre-emption to apply. "I don't think [the WGA] can waive state law," says studio-side labor attorney Alan Brunswick.

In addition, the guild's letter is actually a delegation of powers it may not even have. It comes against the backdrop of ongoing talks between the WGA and Association of Talent Agents and a five-day voting period commencing Wednesday on a new code of conduct that the guild plans to impose after the existing WGA-ATA agreement terminates.

The letter authorizes managers and attorneys "to procure employment and negotiate overscale terms and conditions of employment for individual Writers" and says that "under the National Labor Relations Act, the guild is vested with the exclusive right to bargain over wages, hours, and terms and conditions of employment on behalf of … Writers."

The letter appears to be motivated by the WGA’s desire to help writers who may become agentless when and if the guild itself orders them to fire their agents en masse starting April 7, as many may, since most writers’ agents are not expected to sign the new code. Under WGA rules, non-signatory agents are off-limits to guild members.

But while a union has the exclusive right to conduct collective bargaining for its members, "individual bargaining is not collective bargaining," says Brunswick. The WGA may not have any power to conduct individual bargaining since its agreement with the studios contemplates that individual writers, not the guild, will engage in individual negotiation. 

To understand the potentially problematic nature of the WGA letter, one has to start with the guild’s reasoning. "WGA is the exclusive representative for the purpose of collective bargaining of all writers (‘Writers’) employed under the WGA Theatrical and Television Basic Agreement (‘MBA’)," says an introductory portion of the letter.

But then things get murkier. "As such, under the National Labor Relations Act, 29 U.S.C. § 151 et seq., the Guild is vested with the exclusive right to bargain over wages, hours, and terms and conditions of employment on behalf of such Writers," the letter continues. 

Notice what happened to the word “bargain[ing]”: the adjective “collective” disappeared. But the actual statutory language includes the modifier: a union is the exclusive representative “for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.”

Next the letter says, “The Guild, in its sole discretion, may delegate its exclusive bargaining authority on terms that it establishes.” But can it? One lawyer contacted says that no precedent supports this assertion, let alone a mass delegation to any and all “Managers and Attorneys who represent WGA members,” as the letter is addressed.

And the guild can’t delegate the exclusive power to “procure employment” because the National Labor Relations Act doesn't give it that exclusive power.

This all leads to the conclusion that the WGA may not be able to delegate procurement and individual bargaining powers to managers and attorneys. But even if it can, there’s another issue: Can the guild insulate managers and attorneys from such state statutes as California’s Talent Agencies Act?

The WGA cited federal law — the National Labor Relations Act (NLRA) — and the U.S. Constitution’s Supremacy Clause says that federal laws preempt any state laws “to the contrary.” So, what if the WGA argues that the NLRA preempts state laws regarding talent agents? That would be a nuclear option, since it could leave all agents unregulated, but the guild might argue that preemption only applies under these particular circumstances, that is, where the guild has delegated its powers to the managers and agents.

Preemption is a complicated subject. Sometimes, as with labeling for medical devices, federal laws do prohibit all state lawmaking in the same arena, but other times, as with minimum wage laws — which exist at the federal, state and even local level — there’s little or no preemption.

It turns out that labor law preemption is quite broad, involving two separate Supreme Court cases. One, called Garmon, preempts state laws that relate to conduct that is arguably protected by the NLRA or arguably prohibited by the NLRA. But the NLRA doesn’t protect what agents do — procurement and individual negotiation — and nor does the NLRA prohibit such activities. Moreover, Garmon has exceptions that permit state laws where “the activity regulated [is] a merely peripheral concern of [the NLRA]” or where “the regulated conduct touch[s] interests … deeply rooted in local feeling and responsibility.”

What talent agents do is at best peripheral to the NLRA’s focus on collective bargaining. And regulating professions is a classically “local,” state by state, function — and even more so for a profession that is concentrated in just a handful of states. And the other form of labor preemption, based on the Machinists case, is even less relevant, since it prohibits state laws that regulate labor activity that Congress intended to be left unregulated.

A version of this story first appeared in the March 27 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.