- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
SAG and AFTRA posted long-awaited merger documents on their websites today, detailing the structure of a new SAG-AFTRA that advocates hope will bring stability, unity and greater leverage – but that a minority faction in SAG’s Hollywood Division fears will mean the collapse of bargaining power, residuals and the guild itself.
In about 80 pages of lawyerly language, two documents – a merger agreement and a new constitution – incorporate geographic and occupational diversity into a structure encompassing 10 national officers, 80 national board members (including the 10 officers), a biannual convention, a national executive committee and about three dozen locals, each with their own officers, boards and constitutions.
Unexpectedly, the unions also released a third document, a feasibility study by experienced ERISA attorneys that in effect supports merging the two unions’ pension and health plans. P&H has been the battleground on which merger opponents have staked their flag.
The merger agreement and constitution indicate that existing members of either of the two unions – there are currently almost 150,000 on active status – will be grandfathered in to the new organization. However, if the unions merge, aspiring actorsactors – non-members – will find that getting in will be harder but the initiation fee will be lower than the two unions’ existing fees combined.
As the documents disclose, dues will go up for some members and down for others; it may be easier for the union to strike; and the rules governing agents will become even more confusing than they are already.
The unions will launch a new, joint website that the unions on Friday to support the merger campaign, with details, FAQs and a calendar of informational meetings and other events. The ballot materials themselves will be sent to the two unions’ membership for a vote on or about February 27, with a return and tabulation deadline of March 30.
Meanwhile, here’s a review of the documents released today.
Pension and Health
The P&H feasibility study could be a game changer, in light of its direct conclusions and credentialed pedigree of its author – attorney Deborah Lerner, who’s represented P&H plans in over two dozen plan mergers – and half-dozen other lawyer contributors with decades of experience in ERISA, the key area of federal law that governs pension and health plans.
According to the study, several hundred multiemployer pensions have merged over the last 25 years and there is no legal obstacle to merging the SAG and AFTRA pension and health plans. The report goes on to say that multiemployer plan mergers do not pose any increased risk of loss of benefits, according to the government agency in charge of mergers – the Pension Benefit Guaranty Corporation – and plan trustees have a legal obligation to ensure that no participant’s accrued benefits will be less after the merger than before.
Rather than increasing risk, the report contends that “mergers are common and beneficial because they strengthen the financial base of the surviving plan, reduce administrative expenses, and permit employees to concentrate their covered work under one benefit structure.” Even though merger of the unions would not automatically result in merger of the plans, the study says it would enable a structure where earnings under both plans could be combined for purposes of establishing eligibility, and would also facilitate the possibility of merging the plans.
Based on their experience with hundreds of plan mergers, the study’s authors conclude that such mergers have resulted in plans that are “more cost efficient, more stable and have been in the best interests of the plans’ participants and beneficiaries.”
Underlying all of this is a key principle: as is legally required, the pension and health plans are jointly controlled by the unions and management, and are thus beyond the memberships’ power to directly affect. The merger agreement says only that the new union will use its best efforts to maintain the current level of plan funding and of terms and conditions for members’ work
Notably, also, the new study is not an actuarial analysis of merger of the SAG and AFTRA plans. No such study has been done recently, so far as is known. The last study – the so-called Mercer report – was conducted in connection with the 2003 attempt to merge SAG and AFTRA.
That report was never publicly released, and leaks by partisans in various camps – management, pro-merger labor, anti-merger labor – have offered divergent claims regarding its conclusions. It’s unclear in any case whether those conclusions would be applicable today, eight years later, in light of dramatic changes in the economy, stock market, healthcare costs, entertainment industry, and distribution of television work between the two unions. Without a copy of the report, it’s impossible to tell.
Strikes and Contracts
Subtle changes to the rules regarding strike-authorization votes have not even been hinted at in reports over the past weeks and months, but might come to loom large. Under the current “Phase I” rules, obtaining a strike authorization on the TV/theatrical contract requires mailing a ballot to the entire combined membership of the two unions, then obtaining a Yes vote from 75 percent of those voting.
The new constitution retains the 75 percent figure, but limits voting to affected members, an ambiguous term that at least arguably limits the electorate to members who work under the contract at issue. The new rules also allow electronic balloting or voting at in-person meetings, as an alternative to mailed referenda. Also, if an employer seeks to impose a final contract offer or terminate an existing union agreement, the national board will have emergency authority to declare a strike.
In a more positive vein, contracts can be ratified on a majority vote of affected members, with voting conducted by mail, electronically or in-person. As before, contract proposals will be developed by a wages and working conditions committee, and negotiations conducted by a negotiations committee.
Of interest to agents is how they’ll be regulated under the new union if merger passes. That’s an issue because SAG’s “franchise agreement” with talent agencies lapsed a decade ago with respect to agencies that are members of the talent agent associations in Los Angeles (ATA) or New York (NATR), whereas AFTRA’s continues in force. The new structure leaves the differences intact: Until the national board adopts a comprehensive approach, each union’s existing franchise agreement will apply to work within its prior jurisdiction, as well as to employment under that union’s collective bargaining agreements in areas where jurisdiction previously overlapped.
However, in the case of SAG work and ATA or NATR talent agencies, the agencies’ own agreements (called GSAs) will continue to apply, rather than the expired franchise agreement. Preexisting waivers or adjustments will also remain in place for the time being.
Another area where the unions diverge is in their rules against working non-union. SAG’s Global Rule 1 is strictly enforced, whereas AFTRA’s “No Contract/No Work” rule is more loosely interpreted. Each of the preexisting rules will continue to apply within the prior union’s traditional jurisdiction unless and until modified.
Fees and Dues
As The Hollywood Reporter previously reported, the new union’s initiation fee will be $3,000, which is higher than SAG’s $2,277 or AFTRA’s $1,600, but less than the two combined.
That translates to a 23% savings for actors who would otherwise join both unions – as many do, since the overwhelming majority of new scripted television series have gone AFTRA since 2009, while movies remain a SAG-only business.
Initiation fees aren’t the only cost associated with union membership: there are also annual dues which, as with SAG and AFTRA, will be divided for SAG-AFTRA into a base component plus a percentage component based on earnings under the collective bargaining agreements.
As THR previously reported, dues will decrease for some members and increase for others under a merged union. Base dues will be $198 per year, which is a decrease for dual-cardholders currently paying $116 to SAG and $128 to AFTRA.
Work dues will be 1.575% of all earnings up to $500,000, earned under SAG, AFTRA, AFTRA Local or SAG-AFTRA union agreements. However, for any member working exclusively under non-multiemployer broadcaster agreements, work dues are 1.575% of earnings up to $100,000, plus 0.274% of earnings from $100,000 to $250,000.
In a new development, initiation fees and base dues will automatically increase by 2% per year, starting three years after merger. In addition, they can be increased by a majority vote of the members or a 2/3 vote of the biannual convention delegates. That latter group, however, can only authorize an increase of 5% per year, and can’t schedule any increases more than two years into the future.
As THR previously detailed, AFTRA’s open door policy – which allows anyone to join the union online by paying the initiation fee – will end if the unions merge. Instead, someone will be eligible to join if:
• They’ve worked, are working or are about to work in a position covered by a SAG-AFTRA, AFTRA or SAG collective bargaining agreement other than as a background actor;
• They’ve completed three (3) days of work as a background actor under a SAG-AFTRA, AFTRA or SAG collective bargaining agreement; or
• The national board determines that the person is engaged in work that advances the union’s organizing efforts or general goals.
It’s unclear whether one year’s membership in Actors’ Equity (plus having at least one principal role) or several smaller live performance unions will remain an avenue toward membership post-merger.
The new union will be governed initially by co-presidents, co-secretary-treasurers, a group of officers from both unions, an executive committee, and an unwieldy combined board comprised of the two unions’ existing boards plus AFTRA national officers who are not otherwise accounted for.
This transitional structure will last until the new union’s first biannual convention, which will be in Los Angeles sometime before the end of September 2013.
The national offices, and the initial office-holders, are: president (initially, as co-Presidents, SAG president Ken Howard and AFTRA president Roberta Reardon), executive vice president (current SAG 1st VP Ned Vaughn), co-Secretary-Treasurers (SAG’s Amy Aquino and AFTRA’s Matt Kimbrough), a VP from “the largest Local” (i.e., Los Angeles; AFTRA 2nd VP Gabrielle Carteris), a VP from the second largest Local (New York; SAG 2nd VP Mike Hodge), a VP from a tier of mid-size Locals, a VP from a tier of Small Locals (current SAG 3rd VP David Hartley-Margolin), an actor/performer VP (the current SAG Hollywood Division 1st Vice Chair), a broadcaster VP and a recording VP. In the interim structure, Reardon will appoint the Broadcaster, Recording Artist and Mid-size Local Vice Presidents from among the current AFTRA VPs.
After the transition period, newly elected national officers will serve two-year terms, but the way they’re elected will differ. Members will directly elect the president and secretary-treasurer; the executive VP will be elected by all convention delegates; and the geographic and occupational VPs will be elected by corresponding delegate caucuses. Elected delegates themselves will have two-year terms, while board members will serve for four years (except that some of those elected in 2013 will serve two-year terms, so that subsequent elections will be staggered). National officers, national board members and the presidents of each Local will be ex officio delegates.
In a change from current SAG governance, the new constitution will require that board member alternates must have been elected to a Local’s board or as Convention Delegate, and will also prohibit resigning board members from picking their own successors.
As with both unions today, board members’ votes in the new union will be weighted. In a twist, however, if the votes cast by LA board members (excluding the national officers) exceed a majority of the total votes cast, then an enhanced provision kicks in, requiring that a motion achieve a majority that’s at least 5% above the total votes cast by LA board members, or that among the board members voting in favor, there must be one from LA, one from NY, one from a mid-size Local and one from a small one.
The governance structure will also include a national broadcasters steering committee and a committee of Locals, which will represent the interests of Locals outside of New York and Los Angeles.
On the staff side, there will be co-national executive directors. The documents don’t indicate the co-NEDs’ terms, or any other details regarding merger of staff (some of whom are themselves unionized).
The new union will have offices in LA, New York, and other places as decided by the board. Initially, at least, all of the existing SAG branches and AFTRA Locals will be retained, with duplicates merging by December. That results in a list of about three dozen Locals: Albuquerque, Atlanta, Boston, Buffalo, Chicago, Cincinnati, Cleveland, Denver, Dallas, Detroit, Fresno, Hawaii, Houston, Kansas City, Las Vegas, Los Angeles (Hollywood), Miami, Nashville, New Orleans, New York, Omaha, Orlando, Peoria, Philadelphia, Phoenix, Pittsburgh, Portland, Rochester, Sacramento/Stockton, San Diego, San Francisco, Schenectady, Seattle, St. Louis, St. Paul, Utah, and Washington-Baltimore
The Locals will apparently have significant autonomy: Subject to national board oversight, they’ll have the right to organize members, and even conduct collective bargaining and call strikes, unless the collective bargaining agreement at issue is a national one or affects more than one Local.
An unanswered question: Will the hometown Local be known as “Los Angeles” (AFTRA terminology) or “Hollywood” (SAG’s)?
Initially, at least, waivers will handled as follows: commercials, corporate, educational and non-broadcast will be handled by existing joint committees. Waivers to AFTRA-only contracts will be reviewed by the executive committee. Waivers related to movie and television contracts (other than AFTRA-only) – including in the sensitive area of basic cable – will be handled by a committee composed of the members of SAG’s existing television & theatrical contract standing committee plus an equal number of members selected by AFTRA president Reardon. There’ll also be a new committee for waivers in interactive media (videogames).
If the merger passes, the two unions will merge into a new entity – legally, a Delaware corporation – to be formally called Screen Actors Guild-American Federation of Television and Radio Artists but that will brand itself as SAG-AFTRA.
The new union will succeed to AFTRA’s current AFL-CIO charter and will be a member of the umbrella group called the “Associated Actors and Artistes of America,” or Four A’s. The new union will assume the collective bargaining rights of the existing unions and will make a demand that employers recognize it.
The new union will also succeed to the existing unions’ rights and obligations regarding foundations, subsidiary organizations, awards shows and programs, and other SAG or AFTRA-related entities. Other than that, there aren’t any details on what the merger will mean for the SAG Awards, SAGIndie, SAG and AFTRA Foundations, and the like.
Finally, in case one merger’s not enough, the documents provide that future mergers can be approved by 60% of members voting or 60% of delegates voting in convention.
Sign up for THR news straight to your inbox every day