East and West divisions of the WGA reached the new franchise agreement with CAA ahead of Friday’s hearing, in which CAA planned to ask U.S. District Judge Andre Birotte Jr. to halt WGA’s boycott of the Hollywood talent agency.
“CAA and the WGA have concluded and signed a franchise agreement confirming CAA can resume representing writers and continue the important work of helping them realize their ambitions,” CAA said in a press release on Wednesday. “We end this year of unprecedented global challenges with the optimism and energy that today’s news brings, starting now, and for the years ahead.”
The WGA banned a practice called “packaging fees,” which involve packaging a pool of talent (i.e., writers, actors, and directors) for a project for a fee, rather than taking cuts of their client’s earnings.
Both the East and West divisions of the WGA union argue that the fees create a conflict of interest for agents, who are typically more concerned with raising their personal profits than improving negotiations for the writers.
New rules banning the fees took effect in 2020, as well as a rule barring agents from owning or affiliating with production studios. Guilds now also require that their members stop working with agents who haven’t agreed to the new code of conduct, resulting in thousands of writers firing their agents. CAA, William Morris Endeavor and UTA have alleged that WGA engaged in an illegal group boycott by having its members stop working with their agents. ICM Partners, considered to be the fourth of the “Big 4” talent agencies, did not join the lawsuit.
The cases of the other three agencies were eventually consolidated, and the WGA and a group of individual writer plaintiffs filed counterclaims accusing the agencies of collusion in the implementation of packaging fees, among other claims. UTA signed a franchise agreement and was dismissed from the case, according to court filings.
Judge Birotte declined to dismiss the talent agencies’ antitrust claims, citing allegations that the colluded with nonmembers on enforcing the code. By April, most of the WGA’s counterclaims were dismissed, including claims of federal price-fixing and RICO claims.
Judge Birotte allowed all the amended counterclaims challenged by WME and CAA in a partial motion to dismiss to move forward last August.
The agreement between CAA and the WGA on Wednesday means that now WME is the last talent agency still in the case. The lone agency is still asking for an injunction, and the hearing will remain on the schedule for Friday unless WME and the WGA can strike a deal before heading to court.
The case is William Morris Endeavor Entertainment LLC et al. v. Writers Guild of America West Inc., case number 2:19-cv-05465, in the U.S. District Court for the Central District of California.