Delayed Paychecks Spur Lawsuits by Hollywood Crews

By AMANDA BRONSTAD

Staff Reporter

Matthew Gross knows how to live like a squirrel.

The 34-year-old extra, who calls himself a “background actor,” stocks up on bulk dry goods before the winter months, when television and movie production slows down.

So when he had to wait seven days for $180 he was supposed to receive after appearing in a two-day shoot for a soda commercial, he started to fret.

“I was very nervous,” Gross said. “There was no check. That’s frightening when you’re trying to juggle food and other things going on in your life.”

Waiting a week for a paycheck may seem unremarkable to most workers, but in the world of television, commercial and motion picture production it’s a big deal and it may be illegal.

Even though workers on those productions are technically laid off after each shoot, whether it lasts a day or a month, state law requires they be paid at the next regularly scheduled pay period, usually a week or more.

That issue is at the core of four lawsuits that have been grouped together in L.A. Superior Court, in which cast and crewmembers allege violations of state labor codes and unfair and illegal business practices by more than 100 studios, production and payroll services companies.

Lawyers for both sides in the unusual litigation, which dates back three years, have been working to settle the claims for months, an effort that Alan Brunswick, a partner at Manatt Phelps & Phillips LLP representing Cast & Crew Payroll Inc., called “Herculean.”

Lawyers involved in the negotiations said they felt the two sides were coming closer together, but no one would set a timetable for the conclusion of negotiations.

Though Brunswick declined to comment about the potential exposure to the defendants in the cases, one lawyer familiar with the litigation said the plaintiffs are seeking as much as $100 million.

Debating exemption

The argument affects as many as 200,000 actors, camera assistants, lighting technicians, carpenters, drivers, painters and other crew members hired in California, whether the work is done here or not.

The case highlights a long-running issue in the entertainment industry of paying workers late, said Jeffrey Berman, a labor and employment partner at Sidley Austin Brown & Wood who is not involved in the case.

Whether those pay schedules violate certain labor codes, as the suit alleges, remains unclear, he said.

The state’s labor code requires employees of all other industries to be paid immediately before leaving the job after being either laid off or discharged. Under the law, the definition of being “laid off” means the employee could be hired back at some point.

In 1957, the state legislature amended the law to give employers in the motion picture industry 24 hours to pay an employee whose job was completed but whose paycheck required “special computation,” said Miles Locker, an attorney in the Labor Commissioner’s office, which manages the Division of Labor Standards Enforcement.

He said paying workers on a movie set might be affected by a variety of factors, including multiple locations, which make the regular issue of paychecks difficult.

“For years, nobody tried to assert that the waiting time penalty provision of the labor code applied in the entertainment industry,” Berman said. “People just knew how the industry worked, and it took a while to get paid. And everybody lived with it.”

In a 1998 amendment to the code, however, the state legislature extended the 24-hour provision to the “next regular payday.” Employers who violate the state law must pay the worker’s daily wage for each day that exceeds the lawful pay date, for up to 30 days.

“Studios often do not pay their workers for days and even weeks after the job is completed,” said Alan Harris, a partner at Harris & Ruble and lead attorney representing the plaintiffs. “This unlawful practice enables producers to save millions of dollars in interest charges and administrative costs, all at the expense of their unemployed laborers. There is no reason why employees should not be paid according to law.”

Limiting jurisdiction

Lawyers for the workers are pursuing a two-pronged approach to the case. In addition to seeking reimbursement for those not paid within the 24-hour limit set before the 1998 amendment became effective, they are trying to have workers on television and music video productions exempted from the motion picture provisions of the law. The effect would be to require those employers to pay workers immediately at the wrap of production.

Lawrence Michaels, a partner at Mitchell Silberberg & Knupp LLP representing most of the major studios in the case, declined comment. Among the major studios named are Universal Studios, Sony Pictures Entertainment, Warner Bros. Entertainment Inc. and Walt Disney Pictures and Television.

Brunswick said producers of commercials, television and music videos are part of the motion picture industry and should be subject to its pay schedule.

But Locker, of the Labor Commissioner’s office, said the law is intended only for workers on movie sets. He said the uncertainty associated with motion picture production warranted some delayed pay, but that workers on television shows and other non-movie productions should be paid immediately following completion of the job.

Defense attorneys have also argued in court filings that the workers should be pursuing the matter through their unions rather than through the courts. Unionized workers generally cannot file civil lawsuits that require a judge to interpret federally governed collective bargaining agreements, Berman said.

That has put the unions in an uncomfortable position.

Kenneth Sackman, a partner at Gilbert & Sackman LC representing Local 33 of the International Alliance of Theatrical and Stage Employees, said allowing unionized workers to bring suits outside their collective bargaining agreement paves the way for more freedom in labor matters like wage and hour cases.

Still, the local does not support the workers, either, he said.

“The way they’re getting paid, when they’re getting paid, is the way it’s been for many decades, and it’s the way it’s been negotiated, and we don’t think there’s anything improper about that,” he said.

For Gross, whose on-again, off-again career has landed him everything from stand-in movie roles to a spot as puppeteer, receiving a paycheck has taken anywhere from five days to a month.

“It’s extremely hard to get paid on time,” he said. “There’s always, in the back of your mind, the question, ‘When am I going to get paid?'”