HOLLYWOOD—Hollywood writers have begun a mass firing of agents as a result of major agencies hesitation to sign code-of-conduct letters that would prevent the illegal practice of packaging. Writers were asked by the Writers Guild of America to fire their agents and told its members Friday, April 12, to “Notify your agency in a written form letter that they cannot represent you until they sign the Code of Conduct.”

Prominent writers who have already fired their agents include Jay Kogen (“Fraiser”), Nancy Kiu (“Castle”), Daniel Chun (“The Simpsons”), Chrissy Pietrosh (“Cougartown”), and David Simon (“The Wire”). Pietrosh wrote in a statement, “I’ve had the same agent for almost 20 years. I owe him a lot. But I owe the writers who came before me and the ones who are still to come, so much more.”

Both the Association of Talent Agents and the Writers Guild of America have not been able to come to terms with a franchise agreement that would grant agents the power to represent writers. The directive from WGA was a result of  weeks of negotiations. David Goodman, the president of WGA West, stated in an interview with The Washington Post that, “their (ATA) proposals didn’t address the inherent conflict of interest. It became clear that the extension was not productive, not leading to a solution we could bring to members.” The WGA was hopeful that ATA would align their interests with theirs, Goodman explained in the interview.

This week the WGA announced that it is suing several agencies for packaging fees. Packaging fees are collected when an agency bundles talent and brings them to a studio, network for film, or TV projects. This practice is illegal under federal law and state law. The Writers Guild of America West filed a lawsuit on Wednesday, April 17  in Los Angeles Superior Court seeking to establish that talent agency packaging fees are illegal under both California and federal law.

The plaintiffs are Writers Guild of America West and East, and include writers and WGA members Patti Carr, Ashley Gable, Barbara Hall, Deric Hughes, Chip Johannessen, Deirdre Mangan, David Simon, and Meredith Stiehm. The defendants are William Morris Endeavor (WME), Creative Artists Agency (CAA), United Talent Agency (UTA), and ICM Partners (ICM)—the four major talent agencies that control the representation of writers in Hollywood. The four agencies more than 80 percent of the packaging fees paid by Hollywood studios and networks, the WGA West indicated in a press release.

“All of the writer plaintiffs have been hurt financially by packaging deals. They are creators and writers of television shows that have shaped a generation, yet their agents have profited at the expense of their own clients,” said Tony Segall, general counsel for the Writers Guild of America West.

“The plaintiffs will seek a judicial declaration that packaging fees are unlawful and an injunction prohibiting talent agencies from entering into future packaging deals. The suit will also seek damages and repayment of illegal profits on behalf of writers who have been harmed by these unlawful practices in the past,” Segall added.

The complaint consists of two claims:

  1. Packaging fees violate California fiduciary duty law. Under state law, talent agents are fiduciaries, who are required by law to represent writers with undivided loyalty and without conflicts of interest. Because packaging fees sever the relationship between a writer’s compensation and what the agency receives in fees, and frequently pit the interests of the agency against those of its writer client, packaging fees violate these fundamental fiduciary obligations.
  2. Packaging fees also violate California’s Unfair Competition Law. Packaging is an unfair practice because it violates a federal statute, section 302 of the federal Labor-Management Relations Act, the so-called “anti-kickback” provision of the Taft-Hartley Act. That statute prohibits “any representative” of an employee from receiving any “money or other things of value” from the employee’s employer. Because agents are employee representatives under the statute, their receipt of packaging fees—which are direct payments from employers—are prohibited under both state and federal law.

“Packaging fees are not a new practice in Hollywood, but they have always been controversial. It is time to put an end to the egregious conflict of interest that they pose,” said Segall.

Written By Christianne McCormick and Casey Jacobs