Los Angeles, CAOn November 19, SAG-AFTRA, the union that represents over 160,000 media professionals and performers, filed a lawsuit to enforce a 2020 arbitration award that required UFO Pictures to pay roughly $163,000 toward the actors’ salaries and benefits. The sum is due, according to the union, under the terms of a collective bargaining agreement and the federal Labor Management Relations Act rather than the California labor code.
More complicated than it looks
On their face, the facts seem simple.
In 2020, the union claimed that the production company had breached the terms of an agreement--the Ultra Low Budget Agreement--that permits producers to pay less than union wages and benefits for work on low budget films. “Low budget” means less than $300,000. The condition is that the movie be filmed entirely in the United States. The film “Beyond the Law” was partially filmed in Romania. SAG-AFTRA submitted the claim to arbitration, as required under the terms of the bargaining agreement.
UFO Productions did not appear, did not defend itself and did not request a continuance. It defaulted.
In November 2020 the arbitrator entered an order requiring UFO to pay $163,665.67 in unpaid wages, health and pension contributions, taxes, payroll expenses and attorneys’ fees. Four years on, UFO has still not paid, so the union filed this lawsuit.
Too late? Going backwards? Who is Status Media?
In a recent statement, UFO Pictures founder Micah Brandt denied the claims and said he had not been paid in full for producing the movie. UFO Productions, he asserts, “was not involved in any overseas filming as it pertains to this movie.” “It was all orchestrated and funded by Status Media,” he says, which “did not financially fulfill the agreement they had with the Romanian-based production services company.” These facts might have been relevant had they been raised four years ago in the arbitration proceeding. But they were not.
The union argues that the California Central District Court should not re-open the underlying question of whether UFO Productions owes the money. Longstanding precedent holds that courts should not review the substantive merit of an arbitration award made in accordance with a collective bargaining agreement. Instead, general practice holds that courts should defer to the arbitrator's legal and factual determinations because the arbitrator had the opportunity to hear and evaluate the evidence. For court watchers, this is roughly analogous to the maxim that appeals courts should not generally review the facts presented at trial.
More than anything, however, SAG-AFTRA v. UFO Pictures, LLC highlights the growing trend of TV and film productions to try to skirt union regulations by filming overseas – a practice known as “foreign skirting.”
What is foreign skirting?
Foreign skirting is a practice employed by some production companies to circumvent the labor agreements and regulations of unions like SAG-AFTRA. It involves filming portions of a production in countries with less stringent labor laws or no unions at all, thereby avoiding the need to pay fair wages, benefits, and residuals to actors. This practice allows producers to significantly reduce their production costs and appears to exploit workers.
The impact of foreign skirting on the entertainment industry
Foreign skirting arguably has a detrimental impact on the entertainment industry by:
undermining the value of creative work;
eroding fair labor standards; and
creating an uneven playing field for production companies.
Pushback
SAG-AFTRA has been actively combating foreign skirting, implementing various strategies to protect its members' rights, that include:
Negotiating strong contracts: SAG-AFTRA works to negotiate strong collective bargaining agreements that often contain specific language regarding the production of films and television shows, including requirements for fair wages, benefits, and residuals.
Monitoring production activities: The union closely monitors production activities to identify potential instances of foreign skirting. This involves gathering information about filming locations, budgets, and casting decisions.
Enforcing labor laws: SAG-AFTRA works with government agencies and other labor organizations to enforce labor laws and regulations. The union may file complaints or lawsuits against production companies that violate these laws.
Educating members: The union also provides its members with education and resources on their rights and how to recognize and report potential instances of foreign skirting.
California governor Gavin Newsom proposed a major tax incentive to keep film production in California, recognizing that production companies are incentivized to keep their costs low. It would offer production companies more favorable financial treatment that can help offset the costs of SAG-AFTRA compliance and hopefully reduce the incentive to skirt.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an employment law lawyer who may evaluate your California Labor Law claim at no cost or obligation.