Employment Law Daily Proposed $13M deal would release Sony Pictures from class wage suppression litigation
Monday, May 9, 2016

Proposed $13M deal would release Sony Pictures from class wage suppression litigation

By Pamela Wolf, J.D. Sony Pictures Imageworks Inc. and Sony Pictures Animation Inc. would pay $13 million under a proposed deal that would take them out of the class wage suppression litigation on behalf of “several thousand” animation and visual effects workers. The proposed settlement amount is about 16.7 percent of the estimated $78 million in damages attributable to Sony Picture employees that was made by the plaintiffs’ expert, according to the motion asking the court to preliminarily approve the deal. Sony would also be required to provide continuing cooperation to the plaintiffs in the ongoing litigation, if the deal is approved. Conspiracy. The conspiracy alleged by the plaintiffs purportedly included Pixar, Lucasfilm, Dream Works, Walt Disney, Sony Pictures Animation, Sony Pictures Imageworks, Blue Sky Studios, and ImageMovers Digital. Artists and engineers previously employed in animation studios by one or more of these defendants filed a series of class action complaints asserting violations of Section 1 of the Sherman Act and California’s Cartwright Act and Unfair Competition Law (UCL). In the now-consolidated complaints, the plaintiffs claimed that the defendants conspired to suppress employee compensation by entering into nonsolicitation or non-poaching agreements and agreeing on salary ranges. Blue Sky proposal. On March 31, a proposed deal was filed with the court under which Blue Sky Studios would pay $5.95 million to resolve the claims against that company. The proposed settlement for Blue Sky Studios would give the class members about 25 percent of the $23.1 million that the plaintiffs’ expert concluded was damages attributable to Blue Sky employees. Proposed Sony deal. The proposed Sony Pictures deal, on a percentage basis, is higher than the 14.26 percent of single damages represented by the total of all of the settlements with all defendants in the earlier, High Tech litigation, according to the motion. In addition to distributions to class members, the proposed $13 million settlement would cover any attorneys’ fees, expenses, and service awards ordered by the court. Takes evidence of “cheating” into account. While the percentage of damages in the proposed deal is less than the 25 percent sought in the Blue Sky settlement agreement, it is appropriate, say the plaintiffs, in light of the differences in absolute damages as calculated the expert and relative litigation costs, among other factors. The plaintiffs pointed to the fact that while both of these defendants have denied their involvement in the conspiracy, there was some evidence that coconspirators were concerned that Sony was “cheating” and sometimes not fully complying with the no-poach agreement. The plaintiffs believe that evidence would show Sony’s continuous involvement in the conspiracy, but they cannot ignore Sony’s defenses in reaching a fair and appropriate settlement, the motion asserts.

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