- Actors union SAG-AFTRA recently reached a new agreement with the ad industry that loosens the union’s rules about who can work with union talent, according to a leaked memo.
- This change is a compromise for the union, which previously forbade agencies that hadn’t signed its commercials contract from working with the 160,000 professionals represented by SAG-AFTRA.
- Most agencies and brands that launched in the digital age did not sign the contract. The memo suggests working with union talent will remain difficult but not impossible for these companies.
- It’s unclear how these rules will apply to non-traditional, influencer campaigns that are becoming increasingly popular with advertisers.
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This week, the world’s biggest media union changed its rules about who can work with union talent.
New rules took effect April 1 regarding how SAG-AFTRA will work with agencies and advertisers that have not signed its commercials contract, which covers compensation for union members.
SAG-AFTRA (Screen Actors Guild-American Federation of Television and Radio Artists) represents about 160,000 actors, musicians, voiceover artists, journalists, and other professionals, according to its website.
An internal memo sent to employees at top PR firm Weber Shandwick on March 12 and obtained by Business Insider details the ways these new rules will affect talent relations moving forward. The full memo is printed below.
These new regulations could have wide-reaching effects on how marketers spend their money. Many agencies and brands that launched in the digital age did not sign the contract, which requires members to use almost exclusively union talent in commercial productions ranging from influencer campaigns to big-budget broadcast ads.
“These are important changes that will have an impact for brands and our industry at large,” said a Weber Shandwick spokesperson. “We’re taking the necessary steps to ensure we’re in full compliance with the new rules, so that we can continue to seamlessly deliver for our clients.”
SAG-AFTRA declined to comment beyond a March 16 blog post stating that it had not rolled back any requirements, despite claims from “some in the commercials industry.”
These rules represent a new phase in the long-running battle between the union and ad industry
SAG-AFTRA and the agencies that produce commercials have a history of clashes.
Ad, PR, and talent management firms, facing pressure from clients to create content faster and cheaper, reached an agreement with SAG-AFTRA last April after arguing that elements of the union’s previous contracts — like holding fees that actors earned each time ads aired — were cost prohibitive.
But the union and agencies still had unresolved issues.
SAG-AFTRA previously organized strikes and picket lines outside the offices of non-signatories like Droga5 as well as Publicis Groupe’s BBH, which tried to withdraw from the commercials contract in 2017. BBH claimed that the union’s conditions placed it at a disadvantage because they allowed competitors who hadn’t signed the contract to pitch their services to brands at lower rates.
A judge ruled against BBH last year.
According to the memo, SAG-AFTRA compromised on plans to prevent union talent from working with agencies that haven’t signed its contract
In 2018, SAG-AFTRA began targeting third-party signatories, or production and talent management companies that have signed the contract and are then hired by non-signatories so the latter can work with union talent on “co-produced” campaigns.
The union revoked the status of the six largest such companies in May 2019, accusing them of serving as front organizations that didn’t actually employ anyone but let agencies and brands that hadn’t signed the contract bypass union rules.
SAG-AFTRA scored a legal victory by getting these companies to agree to a strict letter of agreement that took effect on Jan 1.
That letter, according to an analysis from law firm Davis & Gilbert, which represents advertising companies like WPP, was designed to get non-union agencies to become signatories by preventing the third-party companies from working with them and thereby cutting off the non-union agencies’ access to union talent.
The new rules leave open questions, especially regarding PR and influencer campaigns
According to the memo, the new rules are a result of further negotiations between SAG-AFTRA and unnamed “industry participants” regarding those third-party production and talent management companies that signed the contract, which the memo calls “signatory co-producers” or “SCPs.”
The most important changes allow non-union agencies and their clients to participate in certain key activities like choosing actors or influencers, negotiating contracts, hiring production companies, and reviewing scripts — as long as the third-party companies are directly involved and use union talent.
Previously, only union members could participate in those activities.
It’s unclear how these rules will apply to the non-traditional campaigns that brands increasingly use — especially those involving celebrities or influencers who are not members of SAG-AFTRA but work with brands and production companies or agencies that are.
As Brian Murphy and Candice Kersh, partners at law firm Frankfurt Kurnit Klein & Selz, wrote in a March 8 blog post, “Can you imagine telling Kim Kardashian that your third-party signatory needs to come to her mansion while she is shooting her social video?”
Read the full memo below.
Critical Changes to Working With Talent
Effective April 1, 2020, SAG-AFTRA is changing their rules regarding how non-signatory agencies and brands work with union talent. In December 2019, we alerted you to this change. Since then, industry participants have negotiated roll-backs to the rules concerning the use of Signatory Co-Producers (“SCPs”), which will make it easier for non-signatory agencies to continue to work with SCPs.
As originally proposed, the rules would have made it practically impossible for non-signatories to work with SCPs. The recent roll-backs provide a path forward for using them. That said, the manner in which we collaborate with SCPs must evolve to accommodate the new rules.
Note: As with the original proposal,the new rules do not apply when working for clients that are signatories, unless the client advises that they are unable to list themselves as signatory for union purposes. While uncommon, it does happen from time-to-time for business reasons.
At the heart of the rule change is the notion that when non-signatory agencies and brands use an SCP to engage union talent, the SCP must be the employer of talent under the SAG-AFTRA Commercials Contract, as evidenced by the performance of 10 mandatory talent employer activities.
While this is still the case, SAG-AFTRA has agreed to 3 important changes:
- Non-signatory agencies may now be involved in the employer activities, whereas this was prohibited under the original rules.
- The agency and the advertiser are no longer required to certify their non-involvement.
- SAG-AFTRA has acknowledged that certain of these activities may not apply to all productions (such as influencer content) or may have been performed prior to the engagement of an SCP (such as in multi-service endorsement agreements common in public relations, where talent is selected before all elements of the program are determined). In those cases, SCPs must obtain waivers from SAG-AFTRA, and the union agrees to discuss those waivers in good faith.Accordingly, non-signatory agencies must ensure all necessary waivers are sought as soon as possible in order to confirm that SCPs can be used as a means of achieving compliance with union rules.
Though the rules have been relaxed, they still require important changes in how we work with SCPs.
Impacts on Process
The good news is that some of these activities are already being performed by SCPs. Others are to be done “in collaboration with [the] client” or simply require “participation” by the SCPs.
For those activities, the rules do not spell out the level of involvement or control SCPs must have to be in compliance, but it does appear that SAG-AFTRA does not expect SCPs to own these activities in their entirety. However, because the rules are ultimately binding on the SCPs (not agencies or advertisers), each SCP may have its own standards as to how much control they will need to achieve compliance for “shared” employer activities.At a minimum, we expect that non-signatory agencies will need to copy their SCP contract on all emails relating to those “shared” talent employer activities.
As noted above, agencies will need to get in the habit of looping in SCPs as early as possible in projects involving union talent,both by copying their SCP contact by email on all conversations with clients concerning union talent and including them on calls where employment activities are discussed.
Under the new framework,short turnaround engagements with union talent will be considerably more difficult to coordinate, and it iscriticalthat teams plan in advance.
Also,SCPs should review scripts/storyboards prior to production, and may require copies of videos prior to publication. If pre-publication review is technologically impossible (e.g. livestreams), a substitute process should be agreed with the SVP well in advance of the production day.
While a path forward is available to continue working with SCPs, from time-to-time circumstances may prohibit agencies from working with them (e.g. too many employer activities have taken place prior to SCP involvement and the union will not grant waivers). In those instances, non-signatory agencies will need to collaborate with another agency that is a SAG signatory if they wish to employ union talent. The details of those collaborations such as division of labor and compensation would need to be worked out between the signatory agency and the non-signatory agency, but it should be noted thatthe new SCP rules do not apply to collaborations between agencies.
Everyone at non-signatory agencies working on union production needs to be aware of the changing landscape and update their processes to comply with the new rules.
We will be offering short training sessions in the weeks ahead to brief client teams on the rules and how to comply. I encourage you to make this mandatory for anyone who works with talent.
Please reach out to your legal contact if you have any questions about these changes.
10 Mandatory Employer Activities
- Securing casting agentin collaboration with client(n.b. This will not be applicable if no casting agent is used);
- Resolving all cast clearance issues (n.b. We understand this to mean managing the Station 12 and Taft-Harley processes);
- Hiring and contracting with performersin collaboration with client;
- Having personnel on-set for each and every production except voiceover sessions or foreign shoots (defined as shoots taking place outside of the United States). Those on-set personnel must be able to address any issues arising under the SAG-AFTRA Commercials Contract for any shoot days;
- Ensuring proper payment of session fees and residuals of all performers and be available to promptly engage with SAG-AFTRA staff to resolve any claims at the time of production or thereafter;
- Attending pre-production meetings (in person or via conference call) if employer activities are discussed (n.b. Attendance will not be applicable if employer activities are not discussed);
- Participating inselection of a production company;
- Reviewing scripts and storyboards for purposes of determining number of performers to employ; (n.b. This will not be applicable if there are no scripts, storyboards or other performers)
- Being involved inselection of performers; and
- Negotiating union talent agreements with performer representativesin collaboration with client.
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