Another $50 Million Shoe Drops: DreamWorks Settles Wage-Fixing Class Action

Oct 21, 2016

In the latest sequel to the ongoing legal drama, DreamWorks has agreed to pay $50 million to settle a class-action based on DreamWorks conspiring with other animation studios not to poach/hire one another’s employees.


As discussed in my prior blogs, there were two major class-actions regarding wage-fixing/anti-poaching agreements.  The first involved most of the major animation studios, including Pixar, LucasFilm, Walt Disney, Sony, Blue Sky and others.

The second class-action involved major Silicon Valley titans, like Google, Apple, Intel, Microsoft, Adobe, Oracle and Intuit. (Id.)

In both cases, defendants were alleged to have agreed not to poach one another’s employees, thereby quashing competition and keeping wages artificially low.

Most of the animation defendants agreed to pay settlements totaling $19 million when “smoking gun” emails came out which clearly showed collusion like the one from Pixar’s VP of Human Resources: “we have a gentlemen’s agreement not to directly solicit/poach from their employee pool.”

Most of the Silicon Valley defendants settled for $415 million when “smoking gun” emails came out which clearly showed collusion like a Google internal memo that we “will not pursue manager level and above candidates for Product, Sales or G&A [General and Administrative] roles –even if they have applied to Google.”

This latest DreamWorks proposed settlement is scheduled for hearing for Court approval in January 2017, leaving Disney/Pixar/LucasFilm as the last animation defendants that have not reached settlement.


Settlers and Snitches: Sony Breaks Ranks in Hollywood Wage-Fixing Claims

May 05, 2016

I previously wrote about two wage-fixing class actions, where some of the largest high-tech and Hollywood companies conspired not to hire one another’s employees to keep wages low.  Google, Apple, Intel and Adobe attempted to settle the high-tech class action for $324 million, but the Court found the amount too low.  They ultimately settled for $415 million.


Meanwhile, the Hollywood wage-fixing case against Pixar, Dreamworks, Disney, LucasFilm and other studios continued to move towards trial when the Court denied the studios’ motion to dismiss.

Initial evidence indicated that Sony was clean; it had rebuffed the other studios’ efforts to recruit Sony into the “gentlemen’s agreement” not to hire one another’s employees. But apparently there was sufficient evidence against Sony that it decided to settle. Sony, which has given us such animated classics as the Smurf franchise, Cloudy with a Chance of Meatballs, and Hotel Transylvania, agreed to pay $13 million to settle its portion of the wage-fixing claims and further agreed to cooperate with Plaintiffs in their action against the other studios.

It will be interesting to see whether Sony’s settlement will inspire the other studio defendants to cut their losses and settle or fight on.