SAG-AFTRA weighs in on ‘onerous’ Hollywood contracts in Fox, Netflix legal dispute

Hollywood’s biggest union has stepped into a long-running legal fight between Netflix and 21st Century Fox over employment contracts.

In a legal briefing filed late Thursday in Los Angeles Superior Court, SAG-AFTRA raised concerns that an ongoing legal battle between Netflix and Fox could have adverse implications for the working arrangements that actors often get tied into.

The union said 82,000 members who live in California could be adversely affected by the results of the case, which is centered around whether the Los Gatos, Calif., streamer was allowed to lure away Fox employees under contract.

While not taking sides in the appeal, the union said it didn’t want the case to undermine Californians’ legal protections against employers.

“In the past, television actors were guaranteed enough work each season to make a decent living,” said SAG-AFTRA President Gabrielle Carteris in a statement. “Now, with only 8 or 10 episodes per season, actors are working less and receiving less compensation. These unfair exclusivity restrictions in their contracts preclude actors from taking other work making it nearly impossible to sustain a career.”

The move highlights the broader ramifications of Netflix’s hiring practices in Hollywood. As it faced pressure to build up its production capabilities in recent years, Netflix in 2016 was sued for poaching executives from rivals Fox and Viacom with offers of higher salaries and protections against any legal fallout from their early exits. A judge in both cases upheld the legality of the studios’ contracts. Netflix launched an appeal against the decision in the Fox case.

Actors are sometimes tied to shows exclusively and are not allowed to take on other work. Performers who are signed to series-regular contracts are often subject to provisions relating to exclusivity that give producers the option to unilaterally extend them season-to-season, sometimes stopping them from taking other work in between seasons.

SAG-AFTRA said it believes such restrictions are at odds with California law and did not want the initial ruling in the Fox/Netflix case to be applied improperly to its members. The union said it is also concerned that the court’s ruling could have greater repercussions for women and people of color, who have fewer opportunities in the industry.

“These onerous contract terms that prevent artists from having the ability to work — in certain cases for up to two years — are outrageous and must change,” SAG-AFTRA National Executive Director David White said in a statement. “This amicus brief is an important step in our fight to create a more just work environment for our members and others in this industry.”

One of the tenets in the case revolves around a California law that prevents contracts from extending beyond seven years. In its fight with Fox, Netflix argued that Fox’s employment agreements were unlawful and unenforceable, creating a “form of involuntary servitude” that violated the state’s labor code by exceeding seven years, according to court filings.

The legal briefing cites the 1943 case won by “Gone With the Wind” actress Olivia De Havilland against Warner Bros. after she took the studio to court for its insistence that her seven-year contract had not run its course. Hollywood’s early system would tie actors to onerous long-term contracts that bound them to one studio. Her win laid the foundation for today’s freelance film industry, which has become more restrictive over time, in particular with the advent of cable networks making their own shows.

Decades later, De Havilland’s legal precedent helped musician and Oscar winner Jared Leto persuade the courts to apply the rule to recording contracts as well.

In its filing of an amicus brief on Thursday, SAG-AFTRA shared its concerns over the effects of long-term contracts on its members.

The advent of streaming, and the growth in its popularity, has heightened labor tensions in Hollywood. It has changed the way writers and actors are paid, with such outlets offering them large up-front sums for their work rather than payments based on a show’s long-term popularity. With TV shows no longer syndicated, hit series don’t have as long a shelf life; TV seasons have also shortened considerably, creating more economic uncertainty for actors and others.

Unlike Fox and Viacom, Netflix is not part of a powerful alliance of studios that regularly bargains with the entertainment industry’s unions. Instead, SAG-AFTRA agreed to a stand-alone deal with Netflix in 2019 for the first time.