Union Sues Burbank Post-Production Firms

The union representing technical employees at ATS Acquisition Corp., formerly Compact Video Group, sued both Burbank companies last week in a labor dispute stemming from the ongoing consolidation in the troubled post-production industry.

The lawsuit alleges that Compact Video, which was in financial difficulty, fraudulently sold its assets to ATS last month to get out of a collective bargaining agreement with the International Alliance of Theatrical Stage Employees (IATSE).

Several post-production firms have merged or gone under in the past few years as a result of tighter studio budgets, intense competition and price-cutting. The suit against Compact Video and ATS, which was filed Sept. 14 in Los Angeles federal court, also names Meridian Studios Inc. as a defendant.

In its lawsuit, IATSE charges that Compact Video, ATS and Meridian are “alter egos” of each other under federal labor law. It alleges that Compact Video’s assets were sold to ATS to deny union members wages, severance pay and other benefits. The suit seeks to recover those lost benefits, union dues plus $2.5 million in punitive damages.

An ATS spokesman said that the suit was without merit and that ATS expected it to be dismissed by the court as a “frivolous” action by the union.