Updated April 18 at 10:35 a.m. ET
The Writers Guild of America is suing four of Hollywood's biggest talent agencies in a fight over writers' wages — and whether agents are keeping too much of the pie for themselves.
The guild, along with eight writers including The Wire creator David Simon, filed the complaint in California superior court. They are suing William Morris Endeavor, Creative Artists Agency, United Talent Agency and ICM Partners.
At issue are packaging fees — deals that allow agents to be paid directly by studios rather than agents receiving a standard 10% of writers' income. The four agencies receive 80% of the packaging fees that are paid by studios and networks, the WGA says.
"The plaintiffs will seek a judicial declaration that packaging fees are unlawful and an injunction prohibiting talent agencies from entering into future packaging deals. The suit also will seek damages and repayment of illegal profits on behalf of writers who have been harmed by these unlawful practices in the past," Tony Segall, general counsel for the Writers Guild of America West, said in a statement announcing the lawsuit.
The WGA represents thousands of people who write for television and movies, as well as other platforms.
One of the lawsuit's plaintiffs, Meredith Stiehm, created the police drama Cold Case, which ran on CBS from 2003 to 2010. Stiehm said it wasn't until six years after CAA negotiated the deal that she learned the agency made 94 cents for each dollar she made from the hit show.
"That is indefensible," she said in a statement. "An agency should make 10% of what their client makes — not 20, not 50, not like in my case, 94%. 10% is enough."
The writers complain that not only are agents taking more money than they should, but that they are keeping writers from being better paid. They also take issue with the trend of agents becoming producers themselves, creating possible conflicts of interest.
The plaintiffs' complaint hinges on two legal claims, the WGA says. First is that under California state law, talent agents are fiduciaries, meaning they are bound to loyally represent writers, without conflicts of interest. Second, they argue that packaging fees constitute illegal "kickbacks" to agents, a violation of California and federal law.
The Association of Talent Agents argues that packaging benefits writers by saving them their 10 percent commission if their agency is one of the packaging agents on a show.
"Packaging agencies help assemble a show's creative elements before the show is pitched to potential buyers and continue to service the show during its lifecycle," the agents' association says in an FAQ. If packaging fees were to be eliminated, the ATA says "those packaging fees likely would not be redistributed in any way to talent. The studios would keep the money they pay the agencies now." It also pointed to the United Talent Agency's analysis that found its writer clients earned more money on shows that the agency packaged than on shows it didn't.
The agents' association says that WGA leaders are "forcing their members and our industry into long-term uncertainty."
"While the legal process runs its course, we strongly believe that in the interim it remains in the best interests of writers to be represented by licensed talent agencies," ATA Executive Director Karen Stuart says in a statement. "We empathize with our writer clients and the untenable position they have been put in by WGA leadership." She notes that the association has crafted its own voluntary standards for client representation.
On Saturday, the WGA told writers to fire agents who refuse to sign the union's code of conduct, which bans agents from collecting packaging fees. Some writers posted images of the letters they had sent to their agents, saying that under union rules, they can't be represented by the agency until the matter is resolved.