When it comes to work stoppages in Hollywood, what exactly is an act of God? It’s a question that sent studios scrambling amid the COVID-19 pandemic, but even now there’s not much clarity around so-called force majeure events.
Shortly after the WGA strike went into effect, writers’ reps began receiving calls and emails notifying them of deals being suspended. The vast majority of them don’t reference force majeure — and, according to attorneys with whom The Hollywood Reporter spoke on background, there’s a clear reason: The WGA’s collective bargaining agreement says a strike itself is justification.
Under Article 7 of the WGA Minimum Basic Agreement, the writers’ employment agreements at struck companies “shall be deemed automatically suspended, both as to service and compensation, while such strike is in effect.”
Hollywood’s top attorneys working with writers and hyphenates have been putting in overtime trying to help clients understand a situation that has seemingly endless variables. “Clients want to know, ‘Can I be suspended? Can I be terminated?’ Generally speaking, ‘Yes, you can,’ is the answer,” says one talent lawyer. “Most of the studios’ standard terms and conditions give the studio a right automatically to suspend and to terminate without any waiting period. That’s by and large the rule.”
Another talent lawyer notes that there’s been wide variation in how companies are managing their talent relationships: “Some studios are at least getting on the phone to say, ‘Here’s what we’re thinking,’ while others are dropping letters in the mail or email, and that doesn’t always land the best.”
Of course, the WGA’s Minimum Basic Agreement is exactly what it says it is: a minimum. Studio boilerplates may vary, and some talent may have negotiated protections, but attorneys say the latter is rare. “Since the 2007 strike, studios have made these suspension and termination provisions basically nonnegotiable, and the only ones that tend to get protections that aren’t in the pre-negotiated version of their standard terms are the 800-pound gorillas,” says another top talent lawyer.
There’s generally consensus that for directors, producers and actors, a WGA strike is a force majeure event — but when it comes to writers, it’s muddier. Talent reps — and even Hollywood labor lawyers — are split as to whether a strike by your own union invokes force majeure. When writers were the ones who called the writers strike, the argument goes, how could they call this an event out of their control?
Studios, on the other hand, could potentially declare a force majeure with regard to writers because of the writers strike, but they may not want to — as it could trigger additional rights and obligations that they don’t currently need to worry about with WGA members. (One exception being Universal, which attorneys say uses language that makes clear your own guild’s strike isn’t a force majeure event.)
Much of the discussion of force majeure in the WGA’s MBA refers writers back to their employment agreements. Those could contain additional protections like selectivity clauses, which effectively prevent companies from playing favorites by stating that a studio can’t suspend or terminate the person because of a force majeure event unless they do the same to everyone who’s similarly situated. According to one lawyer, some of those clauses go as far as to name specific people and certain studios (like Amazon and HBO) are more likely to agree to them than others. Adds another, “Each studio has a different contract and sometimes even at the same studio there are different force majeure provisions.”
In the WGA’s agreement with studios force majeure is addressed in Article 26. It mandates that the time during which a writer is suspended under force majeure doesn’t count toward their employment term — and a writer can send a studio a termination notice after five weeks of suspension, which would give the studio a week to reinstate them or the writer could potentially walk away and make a deal elsewhere after the strike. (When asked if the AMPTP has an official position on whether Article 26 has been triggered, a rep said to refer to Article 7.) Meanwhile, Article 7 states, in part: “Nothing herein contained shall be construed to deprive the Company of its right to terminate the employment contract at any time after such member shall strike or otherwise fail or refuse to perform services.”
There’s widespread speculation that studios will take advantage of this and use the strike to cut projects and talent from their budgets — but whether studios will do that anytime soon remains to be seen. “If you have the right to terminate at any point until the strike is over, why would you do it now?” speculates a talent lawyer, who expects that studios will likely take their time before making those calls. “On the other hand, if they wanted to make a bold statement against the guild writers as a tool of battle, they might do it as a ‘fuck you.’ ”
A version of this story appears in the May 17 issue of The Hollywood Reporter magazine. Click here to subscribe.
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