United States: "Financial Core" – A Dissident Writer's Recourse

Amid the confusion and tensions of the WGA-ATA dispute over packaging fees and agency ties to affiliated production entities, more than 7,000 termination letters have been sent out to non-franchised agents who once represented WGA members.1 The mass firing was "mandatory rather than optional"2 and 92% of writers who voted in favor of the Code of Conduct acted in concert as insisted by the Guild. As WGA West president David A. Goodman said, "when the guild takes action, we do so as a group... we don't ask an individual member to take a stand. We do it together..."

The WGA has sent a strong message to the ATA through the coordinated firing, but there remains uncertainty as to how the average writer will procure employment when he or she no longer has ccess to the only person (other than the writer him/herself) that is legally entitled to procure employment—a licensed talent agent.3

Some members such as Shalom Auslander, signed the guild-mandated termination letter but openly lamented the "forced" mass firing in the face of guild discipline. In his letter to his agent, Auslander writes: "you're not forcing me to quit the Guild (yet), but they are forcing me to fire you... if I don't send you this letter by end of day today, I will be, in their words, subject to discipline. I will likely not be able to work in the industry again." 4

Playwright and TV writer Jon Robin Baitz became the first WGA member to openly challenge the guild's directive to fire talent agents. In a letter to the union leaders, he wrote: "I am a union man, but ... I cannot cut ties with my agents, because I would be forsaking ... people who have helped me create a life."5

The WGA has warned that members who defy the guild like Baitz and Auslander could face guild disciplinary action in accordance with Article X of the WGA's constitution, for being in violation of Working Rule 23 that prohibits a member from entering into a representation agreement with a non-franchised agent.6 Pursuant to Article X, members in violation can be "suspended, declared not in good standing, expelled from membership in the guild, be asked to resign, be censured, fined or otherwise disciplined..."7

While the guild has yet to declare the specific consequences faced by a writer who fails or refuses to terminate his/her agent8, some writers are concerned that the guild's planned sanctions may take the form of taking away health and pension benefits.9

A union's right to prescribe its own rules, including grounds for discipline, is protected by federal labor law, but such right is limited by the National Labor Relations Act which prohibits a union from taking disciplinary action that "restrains or coerces employees in the exercise of their rights guaranteed in Section 7" (29 U.S.C. § 158(b)(1)(A)).10

According to the U.S. Supreme Court's interpretation of § 158(b)(1)(A), a union can "enforce a properly adapted rule which reflects a legitimate union interest, impairs no policy Congress has imbedded in the labor laws, and is reasonably enforced against union members who are free to leave the union and escape the rule."11 Hence, a guild's action that interferes with a member's exercise of rights constitutes an unfair labor practice. For example, a coal workers' union's procedure of denying welfare and pension benefits to employees who change mines and consequently change unions was found in violation of § 158(b)(1)(A) because it restricts an employee's free exercise of right to join or not join a labor union.

Writers who have cancer or are pregnant have reportedly felt that "they had no choice" but to sign the termination letters, in fear of losing healthcare and pension benefits.12 Consistent with the above example, it would seem that the WGA's withholding of pension and healthcare would be considered an unfair labor practice.

One option for writers who disagree with the WGA's position but want to avoid disciplinary action would be to go "financial core," a right granted by the Supreme Court in its NLRB v. General Motors13 ruling that affords employees the right not to join (or resign from) the union, but still work union jobs, provided they pay their fees and a portion of their dues.

In the context of the WGA, going financial core allows writers to become non-union yet continue to receive the contractual benefits of a collective bargaining agreement (e.g., minimum scale, pension and healthcare) by paying a portion of union dues. This is an inherent right enjoyed by every union member, which cannot be waived or otherwise taken away by means of guild disciplinary action or rules.

However, declaring financial core status has its costs. For one, this strips non-members of their right to vote or hold union office. And more importantly, going fi-core is viewed by many union members as disloyal. Resignation from the WGA could result in ostracization by the union and exclusion from awards consideration.14 Because of these feared repercussions, only 28 writers opted for financial core status during the WGA's last strike in 2007-2008. As of last year, only 40 of 24,000 members of the WGA West are listed as financial-core non-members. In the WGA East, 11 of its 4,776 members are of the same status.15 As former WGA president Patrick Verrone describes: "Those who went financial core did not share in the adversity and should not share in the Guild's victory."16


1 https://deadline.com/2019/04/writers-guild-agents-fired-total-hollywood-fight-packaging-1202599639/.

2 https://deadline.com/2019/04/writers-guild-agents-fired-total-hollywood-fight-packaging-1202599639/. See also https://www.dir.ca.gov/dlse/TAC/TAC-39547%20Doughty%20v.%20Hess%20040517.pdf

3 https://www.laboremploymentlawblog.com/2019/04/articles/collective-bargaining/wga-preemption-route-ata-dispute/.

4 https://variety.com/2019/biz/news/wga-talent-agents-contract-battle-writers-1203194018/.

5 https://variety.com/2019/biz/news/jon-robin-baitz-wga-agent-defy-fire-caa-1203190402/.

6 https://www.wga.org/members/membership-information/agency-agreement/agency-code-of-conduct-implementation-faq.

7 https://deadline.com/2019/04/wga-disciplinary-trials-for-writers-who-dont-notify-guild-they-have-fired-their-agents-1202596193/.

8 When asked whether the writers who did not e-fire their agents will be sanctioned by the WGA, Goodman replied that there's "no plan to sanction any member who has not yet e-signed" because the guild is still early in the process of collecting the termination letters. See https://deadline.com/2019/05/writers-agents-fight-wga-questions-david-goodman-dissent-1202606278/.

9 https://deadline.com/2019/05/writers-agents-fight-wga-questions-david-goodman-dissent-1202606278/.

10Under Section 7 of the National Labor Relations Act, employees have the right to unionize, to join together to advance their interests and employees, and to refrain from such activity. https://www.nlrb.gov/rights-we-protect/whats-law/unions/coercion-employees-section-8b1a.

11 Scofield v. N.L.R.B., 394 U.S. 423, 430 (1969).

12 https://deadline.com/2019/05/writers-agents-fight-wga-questions-david-goodman-dissent-1202606278/.

13 N.L.R.B. v. General Motors Corp., 373 U.S. 734 (1963) (available at https://www.law.cornell.edu/supremecourt/text/373/734.

14 The same sentiment is shared by other industry unions like SAG-AFTRA, which states fi-core are "viewed as scabs or anti-union by SAG-AFTRA". https://www.sagaftra.org/financial-core.

15 https://deadline.com/2018/12/hollywood-labor-strikes-loom-2019-actors-ad-agency-writers-agents-1202524437/

16 https://variety.com/2008/scene/markets-festivals/wga-reveals-fi-core-writers-1117984266/.

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