When is a force majeure event not a force majeure event? When it’s merely a hiatus, studios say.
SAG-AFTRA staff are working day and night, and in concert with agents and lawyers, to resolve two tough questions raised by the entertainment production halt resulting from the COVID-19 pandemic, The Hollywood Reporter has learned: how long can studios hold idled actors to their contracts and what, if anything, must the studio pay them for the hold?
The issues are key for actors — who may need the money now but some of whom may seek the flexibility to take other projects when production resumes — and they’re key for studios, who fear losing talent in the anticipated logjam that’s likely to ensue when the industry restarts.
A source told THR that studios are generally arguing that holds can be indefinite — or at least until whenever production can resume — and that a number of studios take the position that they need pay actors nothing for the holds. On Thursday, the matter surfaced when the union posted a message to members affected by the coronavirus-related shutdown, postponement or interruption of theatrical, television and new media productions.
“The issues surrounding production shutdowns related to COVID-19, including the applicability of Force Majeure language from our collective bargaining agreements, are specific and situational,” the message read. “Employers have made different decisions from among the possible options of how to proceed. We are working directly with these employers to find arrangements that work to the benefit of our members and prioritize protecting their income during this period.”
SAG-AFTRA national executive director David White said similarly in a statement to THR, “We are working closely with agents and attorneys who represent our members to ensure a coordinated approach to the companies’ response to the pandemic.”
The union declined to elaborate, but a source explained that after the 2007-08 writers strike, the studios obtained broad language in Hollywood collective bargaining agreements that they are now using. Much depends on whether the production interruption is deemed a force majeure event or a hiatus, as the latter approach gives the studio more rights — and so many are opting for hiatus.
THR has learned, for instance, that HBO put some of its shows including Succession on hiatus, but has paid those actors a quarter of their pay this season up front and may pay another quarter soon, with the remainder paid when production resumes. Meanwhile, according to a source, some studios have given actors “compassion pay” whose intended accounting is unclear.
Adding complexity, the contractual language varies among the different SAG-AFTRA agreements applicable to movies, top-level scripted shows (e.g., prime time, streaming of premium cable) or unscripted fare such as reality TV and certain scripted series such as soap operas and other programming.
Beyond that, each actor’s individual deal has to be consulted as well, since these can offer protection not found in the union contract, for a fundamental reason: labor law and the collective bargaining agreements permit individual deals to provide better terms than the union deal in almost any respect, but not to undercut the collective agreement absent a waiver. That complexity is found only in industries where union agreements and individual contracts go hand in hand — which is to say, essentially only in entertainment and sports.
In fact, in a surprising twist that complicates attempts at uniformity, for movie actors above certain pay rates the individual deals contain the only potential remedy for the holds. That’s because the union agreement gives much less protection to high earners, on the assumption that they can take care of themselves with the help of powerful lawyers and agents. But the content of those individual agreements vary from studio to studio and actor to actor, with more prominent actors more likely to have obtained favorable language.
All of this amounts to inconsistent and overlapping contract clauses — but with very real implications, monetary and otherwise.
Bryn Elise Sandberg contributed reporting.
