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Volume 23 No. 18
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Union advocate Kessler on other side of WGA fight

Jeffrey Kessler, arguably the most powerful players rights lawyer in sports, has entered the increasingly bitter battle between major Hollywood agencies and the Writers Guild of America on the agencies’ side.

Kessler is lead attorney in an antitrust lawsuit WME filed last month against the WGA, alleging the union was engaging in “an unlawful group boycott” in violation of the Sherman Antitrust Act. Unions are usually immune from antitrust lawsuits under the labor exemption, but Kessler’s suit alleges the WGA crossed the lines of protected activity.

More than 7,000 film and television writers have fired their agents — 1,300 of those fired WME — in a fight over the practice of packaging fees, which the WGA asserts is a conflict of interest.

“Anybody can abuse their powers, and when you abuse your authority, justice requires a response,” Kessler said. “I don’t have any trouble in representing my longstanding client, WME, in this particular battle because the Writers Guild gave them no choice.”

Longtime players rights lawyer Jeffrey Kessler is WME’s lead attorney in the lawsuit.
Photo: ap images
Longtime players rights lawyer Jeffrey Kessler is WME’s lead attorney in the lawsuit.
Photo: ap images
Longtime players rights lawyer Jeffrey Kessler is WME’s lead attorney in the lawsuit.
Photo: ap images

Kessler is outside counsel to the NFL Players Association and the National Basketball Players Association. He represented former student athletes in their antitrust case against the NCAA last year and is representing the U.S. women’s national soccer team in its lawsuit against the U.S. Soccer Federation. He also has represented multiple sports agents, as well as sports agencies.

The dispute between the Writers Guild and the agencies erupted after the WGA adopted a code of conduct that included provisions that banned packaging fees. That involves agencies packaging together writers, actors and directors for TV and film projects and receiving a fee directly from the production company. WME’s federal lawsuit notes the practice has existed for more than 40 years.

“Packaging fees create numerous conflicts of interest between writers and the agencies serving as their agents,” the WGA alleged against WME, as well as Creative Artists Agency, United Talent Agency and ICM Partners. The WGA noted in the lawsuit that agencies historically charged a percentage that aligned agent interests with their writer clients but have increasingly abandoned that in favor of packaging fees.

The lawsuit alleges breach of fiduciary duty, unfair competition by the agencies and asks the state court to end the practice of packaging fees, among other things.

Kessler entered the dispute by defending WME in that state case. Then, late last month, he filed the antitrust case on behalf of WME in federal court. “Really, this particular union gave them no choice but to protect themselves,” Kessler said of WME. UTA and CAA both followed, filing similar antitrust lawsuits against the WGA using different law firms.

Tony Segall, general counsel for WGA West, said he knows of Kessler’s background with sports unions and was surprised to see him represent WME in the state case. “That surprise was compounded when WME and two of the other agencies have now filed affirmative lawsuits on federal antitrust grounds in federal district court against the guild,” Segall said. “And the reason we were even more surprised is the very nature of the antitrust suits are to challenge the scope of the labor exemption, which has been something Kessler and his firm have been asserting on behalf of the sports unions.”

Kessler said, “The labor exemption protects unions who act within their legitimate interests and authority, as do the sports unions that I represent. It does not protect the very different WGA writers union here, which is seeking to restrain trade in commercial markets with non-labor parties outside of the labor relationship.”

Kessler’s lawsuit alleges the WGA has “imposed its code of conduct in combination with non-labor groups.”

Segall said the WGA studied the sports unions’ agent regulations, including their prohibitions on conflicts of interest, before forming its own code of conduct. Segall said he’s communicated with sports unions about the dispute but would not provide details.

The four major sports unions did not comment for this story, but an attorney at one of the unions who asked not to be identified said courts have “absolutely established” a union’s ability to regulate agents.

 

Liz Mullen can be reached at lmullen@sportsbusinessjournal.com. Follow her on Twitter @SBJLizMullen.