SAG Power Struggle Spills Into Court Amidst Talk of Strike

by Thomas Paschalis February 16 2009, 14:04
I. Introduction

In February 2008, when the Writers Guild of America (WGA) ended the acrimonious three-month strike that crippled American television production, a sense of relief spread throughout the entertainment industry.[1]  Hollywood studios had achieved three years of labor peace with writers, television production would resume, and the Oscars could air undisturbed.[2]  Any feelings of elation were short-lived, however, as the industry collectively turned its head toward the impending expiration of the Screen Actors Guild (SAG) contract that summer.[3]  Despite the express desire of both parties to avoid a reprise of the writers’ strike, the June 30 expiration date came and went without a new agreement between SAG and the Alliance of Motion Picture and Television Producers (AMPTP).[4]  SAG members have now been working under an expired contract for over seven months, with the threat of another strike persistently looming.[5]  Further complicating matters has been a power struggle between hardliners and moderates within the ranks of SAG, which has lead to a legal battle over the attempted ouster of SAG’s Executive Director, chief negotiator, and strike-proponent Doug Allen.[6]


II. The Contract Negotiations

With over 120,000 members, SAG is the nation’s largest labor union representing actors.[7]  Like its colleagues in the Writers Guild, SAG has focused its negotiation efforts on the receipt of residual payments for content distributed via new media, such as iTunes and video streaming.[8]  These growing revenue sources were not incorporated into the old contract.[9]  SAG has also been determined to get a piece of the advertising income generated by product placement and increasing DVD residual rates.[10]

SAG’s counterpart in the negotiations, the AMPTP, represents over 350 television and movie producers, including the production entities of major film and television studios, broadcast networks, and cable networks.[11]  The AMPTP negotiates contracts with nearly all entertainment industry unions, including SAG, the WGA, the American Federation of Television and Radio Artists (AFTRA), and the Directors Guild of America (DGA).[12]  Last year, the CEOs of News Corporation, Disney, and CBS all won praise for their decision to intervene and hold smaller, more informal talks with the Writers Guild after the designated negotiators had reached a stalemate.[13]  This new tactic ended months of stalled negotiations, and within weeks, the contentious 100-day strike concluded with a deal that over ninety percent of the Writers Guild voted to approve.[14]

Despite the industry goodwill established toward the end of the WGA strike, AMPTP’s talks with SAG have been tough.  SAG rejected AMPTP’s “final” offer on June 30, 2008, the day the old contract was set to expire.[15]  After a five-month stare-down, the two sides agreed to sit down with a federal mediator in November.[16]  Two days of meetings were unsuccessful in bridging the large gap, however, and the mediation efforts concluded with SAG’s negotiation committee determined to institute a strike authorization vote in January.[17]  A strike authorization would require the approval of seventy-five percent of SAG members.[18]


III. Strife Within SAG

As tensions surrounding the negotiations intensified, SAG began to splinter into competing factions.  SAG Executive Director Doug Allen and President Allen Rosenberg were among the hardliners who sought to authorize a strike, though they were careful to note that such authorization would be a bargaining chip and not necessarily result in a work stoppage.[19]  Conversely, over 100 Hollywood stars, including George Clooney, Tom Hanks, Alec Baldwin, and Steve Carrell signed a petition urging that the strike vote be cancelled and that SAG members work under the old contract for three more years.[20]   This group wanted SAG to join forces with the other unions in three years and negotiate for unified terms.[21]

Though Rosenberg is the elected President of SAG, his Hollywood-based faction Membership First relinquished its majority control over the SAG’s national board last fall.[22]  The new moderate majority, composed of the New York branches and a smaller faction of west-coast members, heavily criticized Allen’s negotiation tactics and successfully voted to postpone the strike authorization vote.[23]  The moderate majority supports the resumption of talks with AMPTP, and after a month of sparring with the Membership First faction, succeeded in its second attempt to remove Allen from his position.[24]  The board then named David White as its interim Executive Director and tapped Jeff McGuire as its chief negotiator going forward.  [25] 


IV. The Lawsuit

After the SAG's moderate majority wrested control from Allen, it agreed to resume negotiations with AMPTP on February 2.  Those  meetings had to be postponed, however, after Rosenberg filed a lawsuit to nullify Allen’s removal and restrain Allen’s replacements from conducting SAG business.[26]  Rosenberg’s first suit was dismissed on a technicality, and after refilling, he claimed that the moderate majority violated state corporate law and guild bylaws by firing Allen without conducting a formal board meeting.[27]  Rosenberg asserted that though SAG's bylaws require a two-thirds vote for the removal of individual officers, the majority employed a seldom-used procedure called a “written assent” that only forty-one (52.5%) members of board signed off on.[28] 

In response to the suit, White called a national board meeting to formally fire Allen.  The board created a task force to proceed with talks while dissolving the negotiation committee.[29]  Subsquently, Los Angeles Superior Court Judge James Chalfant denied Rosenberg’s restraining order, stating that the board acted within its rights under the bylaws.[30]  A three-judge appeals court panel affirmed the decision a week later.[31]  Though these rulings were based on  organizational bylaws, they can also be seen as an extension of the judicial policy of showing deference to union agreements and policies enacted internally.[32]


V. Conclusion

The removal of Allen has paved the way for a new round of talks between SAG and AMPTP, which are scheduled to begin on February 17.[33]  Of course, Rosenberg’s attorneys may continue to seek legal redress by filing another appeal or taking the case to trial, but such avenues will not be expeditious.[34]  Thus, SAG is once again in a stable enough position to resume talks.  Optimistic appraisals have a deal being reached by February 23, at which time SAG is scheduled to begin negotiating a new commercials contract with advertising industry representatives.[35]  Any final agreement may be difficult, though, as Rosenberg and his allies continue to insist that they will not ratify any agreement that resembles AMPTP’s current offer.[36]  If SAG cannot reach an agreement with AMPTP, it would likely maintain its focus on the matter at-hand and postpone the commercials negotiation.

Additionally, further shakeups could be on the horizon, as some members of the board have circulated a petition calling for the ouster of Rosenberg.[37] Due to the tense state of relations and the slim majority of moderate board members, sparring between the two factions may continue throughout the resumption of the negotiations with AMPTP.  Though Rosenberg’s power has been weakened, the moderate faction’s majority is tenuous, and its ability to retain control of the board may depend on how favorable the new contract is perceived to be.  If SAG members do not ratify the new contract, Rosenberg’s faction can argue that SAG’s inability to stay united and weather a strike, as the WGA did, led to its failure.

To that end, SAG is likely to demand that a new agreement be enforced retroactive to the expiration of the last contract.  By continuing to work under the expired contract, SAG members are not able to enjoy the 2.5 to 10% pay raises that AMPTP is offering.[38]  Furthermore, despite the perceived successful outcome of the writers’ strike, both producers and actors are likely attempting to take a more conciliatory approach in light of the acrimony that developed during the WGA negotiation.  In addition to the lost revenues and income caused by the work stoppage, the industry’s image was tarnished to some degree in the public mind.

A year after the conclusion of the writers strike, the country is in the throes of a financial crisis.  Negotiators on both sides understand that the film industry, the market most threatened by a potential SAG strike, is more elastic than the television market that ground to a halt one year ago.  Presumably, this knowledge underlies AMPTP’s decision to keep its June offer on the table, which it claims would align SAG’s terms with those of the other major entertainment industry unions.[39]  For the time being, SAG’s reshuffling indicates a willingness to settle near AMTPT’s current offer and avert a strike.  Undoubtedly, the prospects for turning this dispute into a deal appear to be stronger than ever.  Nevertheless, as the real-life struggle for the soul of SAG continues upon a narrative arc of its own, it is unclear whether the decisive battles have yet to be waged. 

 
Sources

[1] Cynthia Littleton & Dave McNary, Showrunners Return To Work: While WGA Votes, Writers To Resume Producing, Variety, Feb. 10, 2008, http://www.variety.com/article/VR1117980626.html?categoryid=10&cs=1 (last visited Feb. 16, 2009).

[2] Id.
 
[3] Id.

[4] Jay A. Fernandez, SAG, AMPTP Set Date For New Talks, Hollywood Rep.., Feb. 10, 2009, http://www.hollywoodreporter.com/hr/content_display/news/e3id86b3c6480b9377fb2368a26a794fc20 (last visited Feb. 16, 2009).

[5] Kay McFaddin, The ABCs Of A Possible SAG Strike, MSNBC, Dec. 18, 2008, http://www.msnbc.msn.com/id/28180598/ (last visited Feb. 16, 2009). 

[6] Dave McNary, Court Denies Alan Rosenerg Plea: SAG President Hoping To Overturn Allen Ruling, Variety, Feb. 13, 2009, http://www.variety.com/article/VR1118000158.html?categoryid=18&cs=1 (last visited Feb. 16, 2009).

[7] Screen Actors Guild About Us Page, http://www.sag.org/content/about-us (last visited Feb. 16, 2009).

[8] McFaddin, supra note 5.

[9] Id.

[10] Id.

[11] Alliance of Motion Picture and Television Producers About Us Page, http://www.amptp.org/aboutus.html (last visited Feb. 16, 2009).

[12] Id.

[13] Littleton, supra note 1.

[14] Id.

[15] Dave McNary, SAG Says No To Majors’ Final Offer, Variety, July 26, 2008, http://www.variety.com/article/VR1117989579.html?categoryid=13&cs=1 (last visited Feb. 16, 2009).

[16] Mark Hefflinger, Following Failed Mediation, SAG To Seek Strike Authorization, DIGITAL MEDIA WIRE, Nov. 24, 2008, http://www.dmwmedia.com/news/2008/11/24/following-failed-mediation,-sag-seek-strike-authorization (last visited Feb. 16, 2009). 

[17] Id.

[18] Id.

[19] Andrew Salomon & Jay A. Fernandez, SAG Ousting Chief Negotiator Doug Allen, Hollywood Rep.., Jan. 12, 2009, http://www.hollywoodreporter.com/hr/content_display/news/e3i64ab5b30222e725f9b905c954ae2f73f (last visited Feb. 16, 2009). 

[20] Lynette Rice, George Clooney, Tom Hanks Among Actors Petitioning Against Strike Authorization, ENT. WKLY., Dec. 16, 2008, http://hollywoodinsider.ew.com/2008/12/actors-petition.html (last visited Feb. 16, 2009).

[21] Id.

[22] Salomon, supra note 18.

[23] Id.
   
[24] Jay A. Fernandez and Andrew Salomon, Doug Allen Forced Out of SAG Posts, Hollywood Rep., Jan. 26, 2009, http://www.hollywoodreporter.com/hr/content_display/news/e3ieb36f849687dcd17081f0269c72f2754 (last visited Feb. 16, 2009).

[25] Id.

[26] Andrew Salomon & Jay. A. Fernandez, Legal Threat Halts SAG-AMPTP Talks, Hollywood Rep., Feb. 2, 2009, http://www.hollywoodreporter.com/hr/content_display/news/e3ic76b333f26567c6705d95eae8a20f714 (last visited Feb. 16, 2009).

[27] Carl DiOrio, Judge Denies Move To Save SAG’s Allen, Hollywood Rep., Feb. 5, 2008, http://www.hollywoodreporter.com/hr/content_display/news/e3ib47a6c218351ced376ad9e5d0317738e (last visited Feb. 16, 2009).

[28] McNary, supra note 6.

[29] Id.

[30] Id.

[31] Id.

[32] See Marino v. Writers’ Guild of America, 992 F.2d 1480 (9th Cir. 1993).

[33] Jay A. Fernandez, SAG, AMPTP Set Date For New Talks, Hollywood Rep., Feb. 10, 2008, http://www.hollywoodreporter.com/hr/content_display/news/e3id86b3c6480b9377fb2368a26a794fc20 (last visited Feb. 16, 2009).

[34] McNary, supra note 6. 

[35] Fernandez, supra note 33.

[36] Id.

[37] Andrew Salomon & Jay A. Fernandez, Doug Allen’s Ouster Back on SAG Agenda, Hollywood Rep., Feb. 4, 2009, http://www.hollywoodreporter.com/hr/content_display/news/e3i55545185203bc0b1efcce623a25737af (last visited Feb. 16, 2009). 

[38] Alliance of Motion Picture and Television Producers Home Page, http://www.amptp.org/ (follow "Click to download June 30, 2008 Final Offer" hyperlink) (last visited Feb. 16, 2009).

[39] Id.


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