Sep 8, 2014 · 3 minutes

The Silicon Valley wage fixing story is expanding into Hollywood’s visual effects (VFX) industry. A new class action lawsuit on behalf of VFX workers just been filed in the Northern California District Court against the biggest names in the industry, including Walt Disney Animation, Dreamworks Animation, Sony Pictures, as well as the two original "Techtopus" conspirators — LucasFilm and Pixar.

In all, the complaint names VFX nine defendants, including San Rafael’s Imagemovers Digital. The lawsuit is being lead by noted antitrust class action law firm Cohen Milstein — which recently settled a $450 million antitrust class action against Apple for fixing ebook prices.

Brent Johnson of Cohen Milstein told PandoDaily:

“Visual effects and animation workers are the lifeblood of many modern motion pictures. They take us to space, bring fairy tales to life, and give superheroes something to fight. In return, they should receive fair pay determined by competition, not Defendants’ secret deals to suppress their wages and limit their employment opportunities. We plan to seek compensation for the wrongs done to the class.”
As we reported earlier this year, the tentacles of the Techtopus wage-theft cartel spread far beyond Silicon Valley, ensnaring hundreds of thousands of employees across industries and oceans. The landmark class action lawsuit against Apple, Google, Intel and Adobe was confined originally to seven companies, three of which already settled — Intuit, and Disney subsidiaries Pixar and Lucasfilm.

One arm of this wage-fixing cartel reached deep into the VFX industry. According to today’s class action complaint:

Visual effects and animation companies have conspired to systematically suppress the wages and salaries of those who they claim to prize as their greatest assets—their own workers.
The complaint (embedded below) suggests that the wage-fixing scandal in the VFX industry affects “thousands” of employees as each of the companies listed “employed hundreds or thousands of class members each year. The class is so numerous that individual joinder of all members is impracticable.”

The complaint excludes claims against Pixar and Lucasfilm that were already settled in 2013. However, as the complaint notes, most tech workers in the special effects industry are not "salaried" employees, and last year's settlement with Pixar and Lucasfilm involved only its salaried employees.

Pixar head Ed Catmull boasted under oath in his deposition last year that he never gave contracts to his VFX employees:

CATMULL: To be very clear, we did not -- and I -- we've been very clear about internally, we don't have contracts, whereas most of the studios had contracts.

Q: I'm sorry, what does that mean? Don't have contracts?

CATMULL: Well, most of the studios had contracts between the studio and the employees. Employment contracts. And I believe they were bad things. Earlier this summer, we reported on the role Dreamworks Animation — headed by top Obama Administration bundler, Jeffrey Katzenberg — appeared to have played in the illegal wage-fixing conspiracy.

For example, in February 2004, Pixar’s then-president Ed Catmull emailed Steve Jobs:

We don’t have a no raid arrangement with Sony. We have set up one with ILM [Lucasfilm] and Dreamworks which has worked quite well.
According to today’s complaint, the wage-fixing agreement was worked out between Steve Jobs and Jeffrey Katzenberg:
By no later than 2004 (and possibly much earlier), Steve Jobs and the CEO of DreamWorks Animation, Jeffrey Katzenberg, had personally discussed and formed similar “no raid” agreements between their companies. As Catmull explicitly acknowledged in an email: “we have an agreement with DreamWorks not to actively pursue each others employees.” Catmull acknowledged under oath that Jobs and Katzenberg discussed the subject and that the two companies weren’t “going after each other."
There’s a lot more to unpack from this complaint that I’ll get into soon, as well as the recent appeal filed by Google, Apple et al against District Court Judge Lucy Koh’s denial of that settlement.

What makes this story so important is that this is the first time we know of when antitrust laws have been successfully used against an illegal wage-theft conspiracy. New ground is being broken in the suit — and workers are learning that the consequences of inequality and incestuous board room relationships effects everyone on the outside, from well-paid tech workers, to barely-secure VFX artists, down to the minimum wage workers who service the Valley and Hollywood studios.

More soon...

VFX Techtopus First Complaint 1-Main