Will States Take Hollywood to Task for On-Set Misconduct?

SMILF_Unions_Comp - Publicity - H 2019
Claire Folger/SHOWTIME

As Massachusetts legislators seek to withhold tax credits from Showtime's 'SMILF' pending an investigation, other local governments may follow suit to keep dollars from going to projects that don't prevent bad behavior.

Massachusetts raised eyebrows in Hollywood on Jan. 16 when lawmakers there called for SMILF's tax credits to be suspended pending the outcome of an ABC Studios probe into creator and star Frankie Shaw's alleged misconduct on the set of the Showtime series. The surprising move signaled that certain states and their film commissions may be taking concrete steps — either by withholding tax credits for scandal-plagued projects or enacting new laws — to hold productions accountable for claims of on-set harassment and discrimination.

Since The Hollywood Reporter reported in December that Shaw, who serves as showrunner on the series, allegedly mishandled nude scenes and separated writers by race — with additional claims that she failed to give proper credit to at least one writer of color — a grassroots movement has been brewing in Massachusetts, where the Boston-set show shot its second season. Within days, more than a dozen state representatives had signed a letter that called for the state to withhold any tax incentives that the production may be entitled to until an independent, state-sponsored investigation could be carried out. State Sen. Nick Collins, who signed the letter, said that taxpayer dollars shouldn't subsidize "unfair labor practice and harassment."

The proposed action to hold back financial incentives would impact the most recent season of SMILF, which relocated from Los Angeles after shooting only exteriors in Boston during the first season. This year, the half-hour series would be eligible for a generous 25 percent tax credit for all its 2018 filming (Massachusetts law requires projects to complete shooting before applying for money back). According to sources, the production hasn't yet applied for those tax incentives, but it is technically eligible to do so until the end of 2019. Whether the state is legally able to withhold those credits from the production — which one on-the-ground source says is "unprecedented" — is another matter. Multiple government agencies are said to be actively looking into the issue, and the representatives leading the movement concede that they're not sure whether the state has the authority to do so.

To prevent a situation like this in the future, Sen. Collins — with the support of other state representatives — filed a new bill Jan. 18 proposing that any production applying for film incentives in the state submit a diversity and inclusion plan. Under the act, the film commission would consider a project's planned representation of women, people of color and veterans in determining filming eligibility in Massachusetts. “We want to use every tool we can at our disposal — and in this case, tax credits are powerful ones — to ensure that not only are people not being discriminated against or harassed but that the benefits of those tax credits are as broadly used as possible to bring opportunities to ... people who have felt shut out,” says Collins, adding of the SMILF situation: “We should have conditions, and it’s too bad those weren’t in place before because they may have prevented a situation like this from happening.”

Massachusetts isn't the only state trying to prevent taxpayer dollars from going to productions that aren't actively working to prevent bad behavior. Illinois warns applicants that a production with low racial or female representation may be denied entry to the program, and New Jersey has a component of its tax credit that offers an additional 2 percent in rebates to productions that meet diversity thresholds for cast and crew. Legislation that former California Gov. Jerry Brown signed last summer, extending the state's $330 million film and TV incentives program through 2025, included new anti-harassment and diversity amendments. One new part requires tax credit projects to have written policies against unlawful harassment, with procedures in place for reporting and investigating claims — and also requires applicants to attest that there will be no retaliation against anyone who reports misconduct. In addition, the updated program, which goes into effect in 2020, includes a diversity provision that requires applicants to report the diversity breakdown of their workforce, including in key above-the-line positions, and calls for productions to establish initiatives to promote women and people of color.

There already are talks about other states implementing similar laws. "It’s certain that more programs — whether at the local state, provincial or national level — will be implemented to promote diversity across all roles within the industry in front of and behind the camera," says Jess Conoplia, president of the Association of Film Commissioners International. "We also expect an increase in the number of policies designed to deal with workplace harassment. Such enhancements help film offices to in turn help the production industry do the right thing." However, New York Gov. Andrew Cuomo vetoed a TV diversity tax credit bill in December 2017, calling it "fatally defective."

Should Massachusetts prevail in withholding money from SMILF, it wouldn't be the first time a Hollywood project has shot in a state under the assumption that it would receive financial incentives only to not get them. Former New Jersey Gov. Chris Christie reneged on a tax credit for Jersey Shore in 2011 because he felt the MTV reality show "perpetuate[d] misconceptions about the state." Similarly, Texas amended its laws in 2007 to allow the film commission to reject any project if it "portrays Texas or Texans in a negative fashion," using the clause as the rationale for not paying out the incentives it agreed to give Robert Rodriguez's 2010 film Machete. But Sen. Collins argues that, unlike with Texas' law, Hollywood projects shouldn't have difficulty meeting the requirements of the provision he's proposing, noting, "If they have a hard time complying with a diversity and inclusion plan, they probably shouldn't be doing business in Massachusetts."

A version of this story first appeared in the Jan. 30 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.