ILM Pixar Collusion Court Documents

Not since Palpatine has our republic seen such a betrayal in trust!

A copy of the recent settlement and court documents between the Department of Justice and Lucasfilm are available:

http://www.justice.gov/atr/cases/lucasfilm.html

According to the investigation, Pixar was the company that actually drafted the agreement and presented it to Lucasfilm no later than 2005.

They illegally agreed to 3 things:

  1. No cold calling of each other’s employees.
  2. Notification when making an offer to an employee of the other firm.
  3. No counteroffer above the initial offer when offering a position to the other company’s employee.

Both companies made management and select employees with hiring or recruiting responsibilities aware to follow this agreement.

On two occasions in 2007, Pixar complained to Lucasfilm about recruiting efforts by them which breached the above agreement. Both companies agreed to alter their recruiting strategy so it did not violate those terms.

Are you pissed off yet? Because I am. What’s even worse is the fact the DOJ is asking the companies to police themselves for the next 5 years.

What really gets to me is that it was Pixar, not ILM that drafted and proposed this agreement. It wasn’t like they were some vfx facility with razor thin margins that needed to do this to stay in business. This was Pixar, one of the most profitable companies to ever employ vfx artists.

I’m all for ideas on how to prevent this.

First off, I personally will be withholding funding for any films or products that are serviced by ILM or Pixar.

If I were a member of The Animation Guild or the potential VFX union, I would propose a provision in the guild contracts with signatory facilities that did the following:

All executives, managers, and recruiters involved in hiring must sign an agreement that they acknowledge that they can be civilly liable for engaging in collusion against guild members.

The problem is there are can be personal agreements between managers/recruiters that the company can argue was not condoned. While I’ve known quite a few good recruiters, there are a lot of rotten recruiters who engage in some seriously bad tactics. If all of the hiring managers knew that engaging in this kind of illegal behavior could not only make the company liable but themselves civilly liable, I would assume this practice would stop pretty quick.

Soldier On.

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43 Responses to ILM Pixar Collusion Court Documents

  1. skaplan839 says:

    Soldier –

    Thank you for sharing this important information. Seeing as our contract is coming up for negotiation soon, I would hope and expect a member to voice their concern and take your suggestion. Language of that nature belongs in our contract.

    This is exactly what organizing and acting as a collective is meant to protect against. While it may be difficult to detect, being on guard for it is of tantamount importance to all.

    Steve Kaplan
    Labor Organizer
    The Animation Guild, Local 839 IATSE

  2. [...] This post was mentioned on Twitter by VFX Soldier and @ftwo. @ftwo said: ILM Pixar Collusion Court Documents: Not since Palpatine has our republic seen such a betrayal in trust! A copy … http://bit.ly/efSm4s [...]

  3. anon says:

    People are surprised by this? Lucasfilm is not the first or only company that Pixar had a similar agreement with.

  4. joe alter says:

    It doesn’t shock me. Pixar used to be part of Lucasfilm, and when the division was sold of to Jobs, I’m sure they had some serious non-compete clauses with ILM and considered the exchange of personnel part and parcel of those agreements.

    I can’t imagine it’s actually explicitly illegal, but is probably frowned on and raises DOJ questions about the possibility of actual illegal activity.

    On a side note, I remember when I left ILM to go to Tippett in ’94, Phil got a fairly stern letter from Jim Morris about exactly that sort of thing (concerning me) that he was kind enough to show me – I was intimidated – but mostly flattered (and surprised). Somehow ILM has soldiered on without me though .. wish I had a copy, I’d frame it ;-)

  5. Tom says:

    I was told by several fellow friends that pixar does not always pay great nor does ILM. I did not truly know this till I was offered near half what I get paid in LA.

    SF Bay Area is just as expensive to live as LA. I don’t see why these two companies don’t just close there doors and go somewhere cheaper if they don’t want to pay people what they should be paid.

    Compared to other industries, the VFX artist is still a very small fraction of the work force. In most cases almost all artists in this industry make more than 95% of American workers. That said, I still think some people are way over paid.

    What I am trying to say is Pixar and ILM need to change how they do business with artists. In the next 5-10 years movies (even pixar’s films) wont make money at the modern day theater anymore. These companies need to figure out the formula with there employees before its too late.

    Just food for thought…
    Reality/TV shows that broadcast 24 episodes that are budgeting around 1-5 million per show. Thats 24-120 million per season. A pixar film is costing about 250 million a show. Maybe pixar should think about moving to Dreamworks model? Both mediums will be available on our destktops via streaming video soon. I predict the movie industry is in for a huge implosion of some sort. Thank god for online universities :) I am learning a new trade to fall back on. You should too!

    • vfxguy says:

      “SF Bay Area is just as expensive to live as LA. I don’t see why these two companies don’t just close there doors and go somewhere cheaper if they don’t want to pay people what they should be paid”

      I love the implicit message in there that vfx facilities exist solely to pay artists!

      • vfxsoldier says:

        The message I get seems to be the fallacy that Vfx is a commodity.

        There has always been other countries that have cheaper labor and subsidies.

        Cali Vfx has never fashioned itself as the cheap place to do work.

        What the collusion reveals is they really need to stay here for a reason: talent.

  6. vfx artist says:

    Thank your for posting this, vfx soldier and your continual diligence.

    I hope this serves as an example to vfx artist that vfx companies aren’t your friend. They aren’t your enemy either. Its a business. And your time is worth money, multiplied by your skill set. Devalue this, you devalue yourself, your colleague, the work you do and our industry.

    I recall aback in 2006 when Disney bought pixar, Ed Catmull spoke in disbelief as to how companies would poach each other’s employes, citing the Disney/Dreamworks contract wars of the late ’90’s. While I agree, some people were paid too much, it did create a value to our work and industry vs what we have today: the race to the bottom. Dr Catmull’s logic was that you should create an environment where artist want to work. I agree, but that should exist without Collusion. In the same meeting, though, Dr Catmull mentioned how Toy Story 2 had to be redone in months because of a story change, which left artist physically injured (carpel tunnel, etc), which resulted in them reviewing OSHA standards.

    My point being, without a guild or union to set MINIMUMS, even a “smart” place like Pixar seem to defy logic when it comes to labor and even such things as employee health; perhaps resulting in a cult-like dedication. Its this cult-like dedication that often leads to artist to “vote against their interest” and put as much effort into their work as if they owned the business themselves, and ignore the fact that they were an employee. Its important to note this, because everyone’s time eventually comes. I’ve worked at enough places where the people who were thought irreplaceable were replaced. Thats why people who work through their lunch, or work for free after hours think that what they may be doing is in their own self interest, but its not. Eventually, everyone gets canned. Might as well play by the rules.

    Also, any new shop that opens appears to have to go through this evolution: labor law abuse to the point of injury, then class action lawsuit to get the company to just operate within california labor. All the while they devalue the business by competing unfairly with companies that do observe labor laws. If minimums were established and enforced, we would skip this entire step. I say this because I see more and more shops popping up that are 1099, long uncompensated hours, while they compete with shops that do work within labor laws.. then we get news that places like Asylum (who worked within labor laws) shut down while these labor law breaking places flourish.

    I also recall around 2007/2008, getting a lot of calls from recruiters asking me my job description and rate. I replied because in the past, this was usually the first stage of booking a job. It wasn’t. They were pooling data. So what they got was a map of rates for our industry. Soon after I started seeing ceilings on rates. These recruiters would jump from place to place, taking their lists of artists and numbers. Many were paid more than artist while receiving benefits while the artist, the people who did the work, didn’t. Talking to some of these recruiters, I often found myself on the other side of the phone of someone who was 15 years my junior. They had hopped into recruiting after attempting to be a real estate broker. Recruiting was hot now I guess. They have no knowledge of my skillset, which spans decades of experience, and they were telling me what I was worth. Its like me calling my plumber and telling him what I think he should get paid.

    This is where I started seeing the devaluing of what we do. I also started to see the end product suffer (caused by reasons spanning poor production management to the high turn over rate of key talent and management from this “project hire’ logic.) and a false economy being created by a business that had very few staffers and a large group of project hires. I also saw a lack of professionalism, where companies did not want to give deal memos, contracts that state the start and end of your hire. So in effect, they passed on the problems they had with corralling their clients down to the artist. Now all of the problems they had with clients delivering plates on time, staying on bid, etc was now the artist problem. So the artist, who didn’t engage in profit sharing, heck they didn’t even have health insurance, was now engaged in absorbing solely the profit loss of the company. This was in the form of not offering dates on contracts, allowing termination at any point. It used to be that you get two weeks notice… now you get two hours.

    In addition to all of this, I also saw the growth of this false classification of “freelancer” in the form of 1099. What used to be a staffed or contract EMPLOYEE of the company, protected by labor laws, is now a “company”, or “sub contractor” of one, the artist. So a vfx vendor doesn’t employ an artist, it subcontracts the job to a company made up of one person who sits at the vfx vendor’s desk, working of the vendor’s equipment, and taking supervision from the vendor’s staffed employee. Thats illegal. For the artist who want to operate as true freelancers, your client isn’t the vfx vendor, its the vendor’s client.. OR you do work for the vfx vendor on your own equipment at home.

    This, again, devalued the work, devalues the employee, and creates an environment at work where no one is an employee (which is illegal) and thus not protected by labor laws, anti-discrimination and retaliation laws that protect employees, but not independent contractors (freelancers). They don’t get paid for sick days, vacation accumulation, and no benefits. A whole economy of business is created based on employees not being.. employees. It also used to be that we got trained on the job, now we have to pay for our own continuing education with these trade schools. It used to be that we had jobs… now we rent them.. and they can get pulled at any second. I can get a better rental contract from Avis or Budget car rental!

    What does all of this have to do with the collusion article? Its another feather in the cap of organizing. Its another example of how companies are not your friends, nor should they be, and that its a business.. something that often needs check and balances to operate in a moral and humane manner because their goal is to make money. History has proven that. Just read Tom Sito’s “Drawing the Line: the untold story of the animation Unions” to learn such history.

    Its also helps further the example of devaluing that is happening. I hear the word “Commodity” a lot in our business now and I find it vulgar and even a threat to good business. Commodity is defined as “a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.” Relating people to a thing that can be bought or sold is dangerously close to perceiving people as slaves. It used to be at the end of a commercial, I would have a drink with the producer and fellow artists of a show even though I was a freelancer. Today, everyone keeps you arms length.. in many instances, I don’t know who is the producer. That distancing and sort of disassociation of who does the work is disturbing. It can hurt business because you are not nurturing individuals as a whole, thus getting their maximum productivity. I have found since transitioning to this “project hire” mentality has caused a break in continuity of my “Value” as a “Commodity” as time and time again, I start at ground zero at a place into a rigid classification, operating at fraction of my capacity. Meanwhile when I was an actual employee of a company, not concerned about where I was going to work in a few weeks, but concentrating in my task, I was able to branch out to other disciplines. It allowed me to work across disciplines since I had a relationship with managers I knew for years and they trusted me. Also lost is the camaraderie of your colleagues since now we all compete against each other instead of working together.

    Something to think about.

    Happy holidays all!

  7. [...] Soldier commented on the recent discovery on the agreement between Pixar and ILM. He broke down the agreement as [...]

  8. [...] incredibly pissed off. We now have documented proof that that Industrial Light and Magic and Pixar colluded to hold down wages of visual effects artists between their two [...]

  9. Deke Kincaid says:

    I have heard about companies doing this all the time, Sony and Dreamworks, Pixar and Disney Feature Animation, etc… Many HR people have blindly mentioned these deals with comments like “oh your working for DW, we can’t talk to you right now till your contract is up. Which leads me to think a lot of this is HR people just don’t know what they are doing is illegal otherwise they wouldn’t so blatently mention it.

    HR people in vfx all jump from company to company just like artists. They all know each other and network for work because their rolodex of artists keeps them employed. They talk to each other and the side and do a lot of if I scratch your back you scratch mine. Networking is a natural way of getting work so you really can’t be surprised this occurs.

    • Tom says:

      I know that Disney Animation, IMD, and Pixar have a internal deal like this. If a Pixar employee wants to work at Disney or the opposite, Disney Studios strongly discourages this unless you have been given your end of contract notice.

      I do understand that Pixar and Disney have a responsibility to not prune pick employees from one business unit to another. However, even with companies under the same umbrella I am now not so sure that the Disney company can or even should enforce such a position. If someone wants to work at another business unit within the company the company should have the responsibility to nurture that.

      I, fortunate enough, was once part of the real business world working for a major international firm in my past. I know for a fact the business world does foster and nurture as I describe. Even from within. When I moved to California the company even offered me a job working off-site or at its California Firm. I respectfully declined the offer since I was switching industries.

      I believe that the Disney/Pixar relationship that those companies are fostering is not helping them as they believe. In fact I think it maybe holding back both companies. Some people at Disney I am sure would love to work in the Bay Area. And some at Pixar would love to work in Sunny southern California. This creates happier and healthier employees.

      I am not saying just accept everyone who wants to work at Pixar. I am saying the companies should allow for cross-pollination to some percentage. And of course the talent should be subjected to same screening / interview process as any other new employee.

      I think if Disney/Pixar did this. They would be a true equal opportunity employer.

      To your point Deke, companies usually say “we can’t talk to you right now till your contract is up” not because they are colluding. But usually because for them to interview you, you need to sign an NDA so they can talk about the next contract. If you are already under an NDA it is much more difficult for the company to talk with you. That is not 100% of the reason and you suspicion might be true.

      However, I interviewed with several companies in while still working under a contract. It just takes longer. And the companies are somewhat resistant but they will listen if you let them know your position and/or reason for leaving.

  10. Ann says:

    I haven’t seen this mentioned in Variety or other industry press yet. ILM & Pixar – you’d think that would be a front page story. Did I miss it over the holidays? Or is this another case of not wanting to upset the big guys again…

  11. stevorilla says:

    Don’t know if anybody really gets what has been truly happening over the last 5 to 10 years. The golden age o f animation never really ended. In fact, the profits studios saw during the golden age of animation have increased due to merchandising and international sales. Furthermore, executives of animation studios have taken lessons learned from the past and manipulated the union and contracts in their favor. THEY MOST DEFINITELY MEET BEHIND CLOSED DOORS AND NEGOTIATE WORKING CONDITIONS AND PAY ON THEIR TERMS.

    Why some might ask? Because they know the power a strike can wield on their bottom line. A labor strike would be catastrophic to any animation studio. And frankly, it would mean better pay for any artist quickly. We are are highly highly trained and hard to replace. Took me at least 10 years to craft my skills to work at a feature level. They know they can’t replace their staff on a drop of a dime. Time for artists and unions to man up.

  12. see says:

    The HR managers of all the studios have a regular meeting, initiated by either Dreamworks or Disney. I know that Disney and Dreamworks top HR folk attend. Pixar folk flew down for it. This problem is much larger than Pixar/Lucasfilm.

  13. [...] here is if VFX artists are a “dime a dozen” why are executives at top facilities like Pixar and ILM engaging in collusion to prevent wages from [...]

  14. [...] If it’s so easy to send work overseas to cheaper locations, why are top companies such as ILM and Pixar so busy engaging in collusion to prevent wages rising in [...]

  15. Mike Seymour says:

    BUT ILM is still hiring in Asia…
    Please see my article here:

    http://www.fxguide.com/featured/hiring_around_the_world/

    The most important thing to understand when considering applying for a position with a major effects company is remarkably simple. They want to talk to you, they want to hire people. You(they) are not trying to get past or around someone in recruiting who is guarding the gates – stopping you from your dream job. It is the exact opposite. Recruiters want to find good people, and they want to place them in positions where they can excel, make money (for them) and build a solid career. They are seeking you. Once you approach a facility with this as your approach, – applying, interviewing and the whole recruiting process becomes vastly more enjoyable.

  16. [...] won best animated feature despite the ILM Pixar collusion scandal. I thought it would have gotten more play this year but when most major media outlets are [...]

  17. [...] all remember that in January I posted about the DOJ’s investigation and complaint of collusion between Pixar and [...]

  18. [...] seems for the most part we suspect these problems along with others such as collusion and pregnancy discrimination will solve themselves. I’ll be [...]

  19. [...] discriminated against because she was pregnant. Of course you all know the big news about the collusion against VFX workers between ILM and Pixar. Now a LucasFilm consultant is being sued for sexism: In a deposition in the previous case, Bies [...]

  20. [...] on how to prevent collusion such as the incident between ILM & Pixar: @VFXSoldier @AnimGuild And they got caught! How about evaluating Pixar, ILM, SPI and PDI’s [...]

  21. [...] are cutting them, other countries that offer them are at full capacity and turning work away. The profitable companies get caught engaging in collusion to keep wages down even though it’s cheaper elsewhere. Yet the studios keep coming here to [...]

  22. [...] In other words, the studios will argue that such an association is unjust because it was formed specifically to stifle competition through rules that prevent underbidding or adjust prices on consumers (Studios in this case) or employees (See ILM/Pixar Poachgate). [...]

  23. [...] on a potentially sobering front I echo the concerns by cartoon brew. Remember LucasFilm and Pixar were both caught by the Feds in regards to collusion. Now they’re both owned by Disney. The [...]

  24. [...] This is not the first time Lucasfilm has been in trouble regarding pregnancies. In 2010 the company lost a wrongful termination lawsuit by a pregnant woman. In a separate case Lucasfilm was found to be in collusion with Pixar Animation. [...]

  25. Steven Merchant says:

    Don’t fetishize unions too much. On one hand, yes, these companies are trying to prevent each other from poaching, and the morality of that is debatable, but unions do the exact same thing, and work to make sure that their members only work under conditions that they impose. Ever tried to shoot an indie, no-budget film with union actors? ACTRA in Canada (and probably SAG too) pretty much hold a gun to your head as if you’re Paramount or Universal. It’s the worst experience imaginable.

  26. [...] suffered from a high risk pregnancy. It’s also worth mentioning the current trial involving collusion against workers in California between LucasFilm and another subsidiary Pixar. LucasFilm also recently announced it may open in London. Many of the workers in the UK would like [...]

  27. Ross says:

    If I run a PRIVATE company and I decide to talk to another owner of a PRIVATE company, what we agree to in terms of NOT poaching from each other is correct business practice! Mutually beneficial. If people don’t like it, they should start their OWN COMPANIES!

  28. […] years ago I was wrote about an anti-poaching agreement revealed in a Federal investigation between Pixar and ILM. The case later expanded to reveal that not only were big high-tech companies like Google and Apple […]

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