DreamWorks Linked To ILM/Pixar Collusion Cartel

Three years ago I 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 were involved, but these anti-poaching agreements were designed by CEOs like Steve Jobs, Eric Schmidt, and Meg Whitman.

Now a recent article in Pando reveals that even more companies were involved and one of them is DreamWorks Animation. The court documents show messages from Pixar President Ed Catmull to Disney’s Head of Studio that clearly show the intention was to keep wages down:

Plaintiffs’ evidence also supports Dr. Leamer’s theory that Defendants’ anti-solicitation agreements were intended to avoid “bidding wars” for personal that could drive up wages. See, e.g., Shaver Decl., Ex. 60 (stating in an email that Pixar and Lucasfilm “have agreed that we want to avoid bidding wars”). As summarized by Pixar’s President, Ed Catmull, when writing to the head of Disney Studios:

We have avoided wars up here in Norther[n] California because all of the companies up here — Pixar, ILM (Lucasfilm], Dreamworks, and a couple smaller places — have conscientiously avoided raiding each other.

When the story first broke years ago I really hoped DreamWorks wasn’t involved. For me it was one of my most favorite places to work. VFX professionals in general are very cynical about how we are treated by the business and DreamWorks was sort of the exception and the refuge from all that when I worked there at the time. So when the news was revealed it ruined my day.

Of course some of you might say there was some plausible doubt about DreamWorks Animation’s involvement. I can assure you that it’s true. When I was at Digital Domain we had a huge show that needed to ramp up Character Effects (CFX) talent. Since I once worked in DreamWorks’ CFX department, I expressed that Digital Domain should reach out to the talent there to help us with the show. I was immediately told that the company was not allowed to contact any DreamWorks employees. This angered me as I knew many talented artists at DreamWorks were upset with the contracts being offered by DWA management and that DD would have probably made better offers.

Now before many of you place group blame on recruiters, it’s important to know from the very beginning of this scandal there have been very good recruiters who denounced this practice. Furthermore, I know a few Dreamworks recruiters who were an absolute joy to work with (except one). It’s important because while it’s amazing how acceptable this practice of de-facto wage theft was, what’s even worse are the recent revelations of the pure joy Steve Jobs had in ruining the career of one recruiter who tried to avoid breaking the law.

It’s also important to recognize one of the few companies and CEOs that avoided this illegal deal: Facebook’s Sheryl Sandberg.

Regardless, in the end a part of me wants to disregard everything I learned about “doing it right.” As a friend on Facebook pointed out:

The world is being run by the wrong people. But the reason why is because the right people don’t want to be that evil.

Soldier On.

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32 Responses to DreamWorks Linked To ILM/Pixar Collusion Cartel

  1. contessa12 says:

    Meg Whitman? Wow am I glad you guys didn’t vote her into office!

  2. Paul says:

    That article about steve jobs was just disgusting to read. It puts this problem in perspective. Thanks for sharing

  3. Rick Sander says:

    This was openly discussed, briefly during the 90s, until they were called on it and realized it was illegal. Even during the recruiting process, if you were talking to three companies, two would stop communicating with you. The various HR peeps would talk once a week and call dibs on various artists so there wasnt a bidding war each spring and fall.

  4. Animalworks says:

    In 2009 I was a victim of this between Animal Logic when applying to Dreamworks… Because of a an agreement between the two companies, I had to request from Animal HR to be allowed to speak to DW HR before the recruitment process could proceed with DW. This was horrible because it forced me to announce to my current employers that I was shopping around with no guarantee of a job to go to…..

  5. Dave Rand says:

    I was the CG supervisor for Chronicles of Riddick for Hammerhead Studios. I left Sony to go to this opportunity. An exec at Sony warned me verbally that I’d be forever blacklisted for leaving Sony ..(even though I had no contract only and expired deal memo on a previous show and gave proper notice) They also told me they’d sue me if I attempted to entice any of the VFX artists at Sony to move to Hammerhead for our show. They even sent a letter to Hammerhead regarding any “poaching”.

    These practices were going on in Montreal as well. i happen to know the person involved and she repeated stated that VFX artists are hugely overcompensated. This was right before they decided to sop paying us altogether in the Journey to the Center of the Earth fiasco.

    http://www.gamasutra.com/php-bin/news_index.php?story=21131

    Among many factors …Talent = leverage…. and we an do so much more to tip the balance back in our favor.

  6. Peter Greenaway says:

    “These practices were going on in Montreal as well. i happen to know the person involved and she repeated stated that VFX artists are hugely overcompensated. This was right before they decided to sop paying us altogether in the Journey to the Center of the Earth fiasco.”
    Right!
    Never see such a huge amount of obsequiousness and fear as in Montreal, in my entire life.

    • Rob says:

      Have you worked in London?

      • Peter Greenaway says:

        yes, in UK. But still you don’t compare with Montreal. Although…I think is a general issue.

      • Rob says:

        Really? How so? What could be worse than people not even getting paid for ~30% of their work (or however much work they do unpaid)? And wages so low that they can’t even afford decent housing?
        I haven’t heard that either of those two things are going on in Montreal – not at the big studios that have existed for a while anyway. I do remember the fiasco Dave Rand keeps reminding us of (and rightly so!).

      • Rob says:

        And yes, obsequiousness and fear seem to be common in general. But like I mentioned – you can at least get a somewhat better deal. London is by far the worst I’ve experienced so far overall. And that was also reflected in the amount of frustration and fear I saw around me. Other places paled in comparison. But then I’ve never worked in Montreal before. But as I’m currently considering it, I would appreciate more substantial information.

      • Peter Greenaway says:

        When you talk about local companies is a disaster – Modus, Newbreed, SolidVFX etc …are all scam!
        If you talk about UK companies that are here to chase taxpayers money, then good luck. It is not going to last forever.
        It is cheap labor town, and they pay overtime, but only 1 or 1 1/2.
        But if you want to try, no problem. Nothing compares to a personal experience.
        Houses are cheaper then Vancouver, but moisture and cockroaches are everywhere.
        Good luck

      • Rob says:

        Cockroaches?!
        That’s going to go over well with my bug phobia.
        But I hope that at least more modern condos won’t suffer from that.
        Anyway – thanks for the explanation.

      • Peter Greenaway says:

        good luck with “more modern condos” as well.

  7. gj says:

    Facebook friends quote is right on the money.

    • I don't get it.... says:

      The quote doesn’t make sense. It implies the only way to run the world is to be evil. Why can’t the right people run the world without being evil?

      • gj says:

        You’re right. It’s not the only way to run the world. It’s just the most predominate way of running the world. Right now our society rewards people who excel at taking advantage of others and who pursue greed above all else. It has not always been the case. Here’s hoping things change for the better…

  8. polyphemus says:

    I never bumped into this while I’ll was at Dreamworks although the companies I contacted were ones I worked at before and they knew when my contract was up for renewal at DWA, they would send me an email every time asking me if I was interested on coming over to work on project X.

    I remember studios cold calling artists at their desks at R+H a few years back, that was gold.

    Not surprised about the stories out of Soho/London, all sorts of backroom deals there, one time I interviewed with a facility and when they refused to budge on price (I asked for more to offset the lack of OT pay), I was specifically told don’t bother trying to get more money because they know what the other London studios was going to offer me. Of course they assumed I was only talking to London studios… lol.

  9. wsoldier says:

    This was 2 years ago but I actually received a large offer from DD when negotiating with DWA at the end of my last contract. I don’t dispute that these practices are happening, but at least in my case it certainly wasn’t evident.

  10. Earl Grey says:

    <bWhen I was at Digital Domain we had a huge show that needed to ramp up Character Effects (CFX) talent. Since I once worked in DreamWorks’ CFX department, I expressed that Digital Domain should reach out to the talent there to help us with the show. I was immediately told that the company was not allowed to contact any DreamWorks employees.

    This implicates Digital Domain as well. If Digital Domain was not allowed to contact DreamWorks employees, it implies that Digital Domain expected that favor to be returned.

  11. former_manager says:

    I think it is a good idea to distinguish between a ‘raid’ behavior and having corporate standards for how to hire. A ‘raid’ is calling employees out of the blue at another company and offering them a premium above their current salary to get them to jump ship. This is illegal if the employee is in a contractual relationship, but not otherwise. (look up constructive interference). Some bosses however do consider it unethical and not a good business practice.
    Others consider it as standard behavior especially in Silicon Valley.

    If an employee approaches another company saying I want to work there, the employer is free to offer whatever they think is appropriate for the job. And they can decide as a matter of policy
    that they will not offer large increases, but rather a prevailing wage for the job that is open. HR departments often cooperate with third parties that do salary surveys, so they often have a good idea of where the competition really is. Some HR departments as a matter of policy then will not generally get into bidding wars. There is a base misunderstanding that any salary is negotiable, this isn’t the way large companies work though.

    An agreement between companies that sets wages or terms and conditions of offers and counter-offers is however restraint of trade and illegal as the DOJ case tries to show. notifying of giving offers is invasion of privacy and could lead to collusion. So whoever put those things into an agreement didn’t know what they were doing, and I bet a lawyer wasn’t involved.

    In California, people are free to work where they want, and companies when approached by potential employees are free to offer what they think is appropriate — but collusion between employers is not legal and would give an employee a cause of action against both employers.

    • Andreas jablonka says:

      The irony is all these companies have ethic when it suits them! Yet they fire people when they feel like it, even after promising long contracts (abq, dd Florida). It’s disgusting!

  12. $$$ says:

    I have more than a sneaking suspicion that this practice is rampant in London.

  13. kirsten says:

    Is anyone in this industry doing it with kids and a wife? Where are the longer contracts? I was offered pretty permanent work at ILM but had a new baby at the time. Looking at re entering industry, any tips on most ethical city/company to head to?

    • Peter Greenaway says:

      none!Just try to do something else. Sooner the better.

    • Wake up call says:

      Ethical?? Lol
      Kirsten you must be from Toronto or something.. Been out of the industry for ages maybe.

      Everyone needs to wake up.
      All the studios collude with each other.. Everywhere..Period. Shouldn’t be surprised. They ALL want to control everything and pay you a cheaper amount of $. And if you don’t know what you should be making then you deserve to be de-valued.

      Everyone in London taking it in the @$$ for so long is their own fault for not organizing themselves better. Montreal is a village and it’s worse here in terms of professional practice. There is no such thing. Look at how many people ares sliding into supervisor positions recently at these Mtl vfx facilities… Do you see any international names in their resume? Cheaper and cheaper is the name of the game these days. & artist are to blame for accepting below rates. I know A LOT of seniors making less than 6 figure salaries.. Which is ridiculous.

      Kirsten..The only way to get what you want and your worth is to be MOBILE. Un-attached. Unless of course you want to get half of what your worth.. Then there’s plenty of companies willing to keep taking advantage of you chained at a desk.

      I laughed at the comment about the producer saying vfx artists are overpaid. Last time I checked vfx films are the most profitable EVER. Never has a “commodity” been so hot to get. They should be thinking that MAYBE.. JUST MAYBE they are underbidding instead?.. But that will only dawn on them when the shit hits the fan and they can’t seem to making ends meet (yeah it’s the artists fault).

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