Dreamworks offers $50m settlement in wage-fixing case prompted by Pando reporting
If Dreamworks’ next movie looks a little lower budget than normal, you can blame Mark Ames. His reporting for Pando on the Hollywood studio’s wage fixing just cost the company $50m.
Some history: Back in 2014 Mark began reporting his bombshell series about a scheme by Apple, Google, Adobe and other tech giants to fix wages by agreeing not to poach each other’s employees. That would be gross in itself even without the other revelations in Mark’s reporting, including the infamous Steve Jobs “smiley face email” where the late Apple founder expressed delight that he had managed to get a recruiter fired for breaching the illegal cartel agreement. Legendary valley reporter Michael Malone described Mark’s work on the story for Pando as the best Silicon Valley investigative reporting in the past dozen years.
Amongst the many, many readers of the series was a group of animation workers who first learned from documents published on Pando that they too had been victims of wage fixing by their employers. They too decided to begin a class action suit against Sony, Dreamworks, Blue Sky Studios and almost every other significant animation studio.
Already Blue Sky Studios and Sony have agreed to settle for $19m, with Sony agreeing to hand over documents which would help the plaintiffs’ case against Dreamworks and others. Last week, according to Courthouse News, Dreamworks told the court it was willing to pay $50m to settle their own involvement in the wage fixing cartel. As Courthouse News says, this is the largest settlement to date in the class action suit.
Pixar, Lucasfilm, Disney and ImageMovers Digital are also named as defendants, but have yet to come to terms on a settlement.
The studios mounted a fight against class certification, but the settlements began rolling in once Koh agreed to allow plaintiffs to sue as a class.
With the total settlement total creeping towards $100m, the animation studios have had -- to use a legal term -- their asses handed to them by the courts and plaintiffs for trying to save a few million bucks by “disrupting” anti-cartel laws. But that cost is still dwarfed by the $415m settlement in the main Techtopus case involving Apple et al. And, of course, it seems highly likely that amount will be dwarfed by the total amount paid in settlements by Uber over their own disruption of labor laws.
So all’s ending well for the animation workers, and less so for the wage fixers. And there is, one has to hope, a lesson here.
It might seem really appealing to startup founders and CEO to ignore the laws that ensure that workers are not completely screwed by profit-hungry corporations. It might seem cool to disrupt anti-collusion regulations and agree with your billionaire pals to remove competition from the labor market. And, at first, it might even work. There’s no doubt that Apple, Dreamworks et al saved paying a ton of wages during their Techtopus days just like Uber has been able to stay in business, and grow like a weed, by ensuring that its employees -- sorry, “partners” -- aren’t entitled to the same basic benefits and entitlements as, say, an entry level fast food worker.
But, as the courts continue to make clear, if you get caught bending the rules, a day of reckoning will surely follow. $10m saved today could mean a $100m, or greater, settlement tomorrow.
Or, to use another legal term, karma is a bitch.