Personal Service Contracts

Personal Service Contracts (agreements between an animation studio and individual employee) were de riguer in the go-go nineties. But when animation hit a slack spot at the end of the 20th century and start of the 21st, PSCs fell out of fashion.



Disney Feature stopped doing them; DreamWorks Animation continued the personal service contract practice but the documents became less beneficial to employees.



In the last twelve months, however, some studios have started doing individual contrast with employees. Because of the uptick, TAG did a seminar on Personal Service Contracts at the last General Membership Meeting. Some of the bullet points: ...

* Term contracts -- these PSCs begin and end on a date certain. Like for instance, June 1st 2014 to May 31st 2015. The studio agrees to employ an individual for a set period of time (with the usual loopholes in case of performance issues, insubordination, etc.). And the employee agrees to remain with the employer.



* At Will contracts -- an agreement with no long-term guarantee of employment. Employer will call this a "week to week" contract, or "run of picture" contract, but in practice this seldom means an employee will be retained until the end of a project, but only until the Producer no longer requires the employee's services. (Note: In a true "at will" contract, an employer can lay off an employee with a week's notice; an employee can resign from the studio with or without a week's notice.



* Indemnity Clauses (or "indemnification") -- the employee agrees to pay to defend his/her employer against lawsuits triggered by employee using stolen work on the employer's project. (The Guild always points out indemnification clauses in PSCs. these clauses have been around since the 1990s. We've never seen an animation employee pay for a legal defense against a third-party lawsuit, but the threat remains.)



* "Two-picture contracts" -- A PSC that offers employees a "two picture, run of feature" deal, but the way the contract is structured and worded, an employee can be laid off at any time. (There's no definition of "end of picture"; there's an option, exercised by the studio, to extend an employee to a second feature). The guild considers these "two picture agreements to actually be "at will" agreements.



* Ownership rights -- the employer/Producer claims that the producer retains ownership of any artistic work the employee creates during her/his term of employment. (In practice, the employer seldom -- if ever -- lays claims to such work, but language in the contract makes it a potential threat.)



* Carve outs/ Exclusions -- TAG recommends that artists negotiate "carve outs" to studio ownership of their work by negotiating "carve outs" for rights to three or more personal project that the employee is working on at the time of hire. (And if she/he doesn't have three personal projects, she/he should invent three titles under which future personal projects could be placed.)

There are sometimes disputes over PSCs. Studios will label them "term" deals (thereby blocking an employee from resigning and taking another job) when they are, in fact, "at will" deals.



And PSCs that have no better terms or conditions (higher wages, guaranteed employment, additional vacation, etc.) can often be disputed. As the TAG lawyer Stu Libicki has said more than once: "Slavery/involuntary servitude was outlawed a few years ago."