Pando

Judge reanimates wage-fixing class action suit against Sony, Pixar and others

By Mark Ames , written on August 24, 2015

From The Techtopus Desk

In 2007, Pixar President Ed Catmull sent out a company-wide email.

In it, he explained the computer-animated film studio’s meager pay raise, 3.5%, as a consequence of other benefits to Pixar’s employees, including a new child care center. Pixar company “talking points” instructed HR people to tell employees that the unexpectedly modest salary increase that year, just after being bought out by entertainment giant Disney, was also due to other employee benefits. It was all for their own good, they said.

But what Catmull and other Pixar executives didn’t tell their employees was that the real reason they were given such meager raises that year was because Pixar knew exactly what all of their competitors were offering their employees, and visa-versa—thanks to their illegal antitrust wage-theft cartel across Hollywood’s computer animation industry.

And it is thanks to instances of alleged “fraudulent concealment” like the notices sent to employees by Catmull and Pixar that the San Jose District Court ruled last week to reanimate, as it were, the Hollywood portion of the Techtopus class action wage-theft lawsuit.

“Attributing the anticompetitive effects of a conspiracy to some cause other than the collusive conduct can be an affirmative act of fraudulent concealment,” Judge Koh wrote in her 55-page opinion, adding:

“[T]he Court finds that Plaintiffs have sufficiently alleged that Defendants both made misleading, pretextual statements and took affirmative steps to keep the alleged conspiracy a secret.

“Plaintiffs allege, and support with specific factual allegations, that Defendants actively attempted to conceal the existence of the conspiracy.”

Earlier this year, Judge Lucy Koh had ruled to dismiss the lawsuit based on antitrust statutes of limitation, unless the animators suing the biggest studios in the industry could show that they filed late because their employers willfully and fraudulently covered up their wage-fixing cartel’s tracks. That is exactly what the animators’ have done, according to Koh’s ruling last week, and now we could see a trial coming.

In the summer of 2014, Pando first broke the story about a vast conspiracy between leading Hollywood animation studios to fix and suppress film animators’ wages and their career mobility. As we reported in December, it was our revelations that helped spark a class action lawsuit filed by the affected animators against their employers—Dreamworks Animation, Disney (including subsidiaries Pixar and Lucasfilm), Sony, and Blue Sky Studios—in the same San Jose District Court, as part of the same hi-tech wage theft conspiracy lawsuit against leading tech firms including Apple, Google and Intel.

From the initial court documents:

[T]here ended up being some publicity about a year later in a technology online magazine called ‘PandoDaily’ that describes some of that evidence and that in turn alerted people in the industry, many members of our proposed class, that there might be a problem here that was different from the one that was sued on in the high-tech case.

The animators’ lawsuit, and the hi-tech suit, grew out of the Techtopus, an illegal employers’ cartel whose tentacles reached into the biggest names in hi-tech, and eventually spread across industries and oceans. Pando has been reporting on this landmark antitrust case for nearly two years now.

While the Techtopus wage-theft cartel lawsuit came to a settlement earlier this summer, the Hollywood studios have been fighting this separate and newer class action in the same court, overheard by the same judge, Lucy Koh—perhaps the most important and interesting legal mind on the intersection of law, politics, power and technology today. (Read Judge Koh’s opinion embedded below.)

I spoke to one of the plaintiffs in the original hi-tech Techtopus lawsuit, Michael Devine, the “rebel” plaintiff whose rejection of the original settlement in 2014 resulted in the plaintiffs being awarded $90 million more than originally agreed. Devine tells me he thinks the animators have a potentially stronger case in a trial by jury than tech workers do, given the fever-pitched rhetoric against tech workers in the media and culture today—even workers whose wages were stolen by their billionaire bosses at Google and Apple.

Devine told me by email,

I hope they take the animator case to trial. In the techworker case, the primary reason I agreed to settle was the prejudice against tech workers revealed in jury research. The animators will probably find more sympathetic jurors. I also hope the earlier settlement in our case, with Lucas Film, Pixar, and Intuit, does not set a benchmark for the animator case: I agreed to that settlement purely for strategic reasons and I think it was grossly inadequate given that George Lucas is the progenitor of the felony conspiracy.

It is one of the bitter ironies—stupidities, actually—of the anti-tech backlash today that the all-powerful employers and executives at Apple and Google can harness anti-tech populism to screw their own workers and enrich themselves.