If people could remember only one show during this winter, chances are it would be Netflix’s latest hit, Queen’s Gambit.1 The show was released on October 23, 2020, and just five days later became the most viewed of the day on Netflix.2 One month into its release, the streaming service announced that the show has been watched by 62 million households since its release, and making it Netflix’s biggest scripted limited series to date.3 The show is also responsible for a renewed public interest in chess, as the show is about the life story of Beth Harmon, an orphaned chess prodigy, on her rise to the top of the professional chess player world, and her emotional and physical struggles throughout her coming of age.4
As the show gains international recognition and fame, one might naturally be intrigued by its production and distribution. As law students and future lawyers, we would inevitably wonder what are the common legal issues that might arise on a show’s way to success. So today, let’s talk about the employment law issues one might encounter in producing and distributing films and shows.
No business can survive without the talents, and in the entertainment industry, that’s the actors and actresses. The actress in Queen’s Gambit, the 24-year-old Anya Taylor-Joy, allegedly picked up approximately $200,000 for the show, while movie roles are expected to pay ten times that sum.5 Recruiting actors and actresses for a project can present important contract law issues, as doing so sometimes require lengthy negotiations between agencies representing the actors and the production company. Formal contract will usually ensue after the negotiations, which would serve as the basis for subsequent disputes, should any compensation related disagreements rise. Many well-known TV shows have reportedly had compensation related disputes, the most famous one being Friends, as the six friends united together to re-negotiate their offers from $600,000 per episode to eventually $1,050,000 per episode.6 Unequal compensations exist between actors based on fame, experience, gender, and ethnicity, among which fame and experience are probably more justifiable, since reputations of the leading stars can sometimes make or destroy the film in the entertainment industry. However, discrimination and differentiation based on gender and ethnicity should be repudiated. Sadly, that is not the case in Hollywood so far, as there has been a significant gap between payment for actors and actresses. According to The Conversation, actresses in the film industry earn approximately 80% as much as men.7 Many actors and actresses have raised gender inequality in Hollywood over the years, and we are witnessing a trend of closing of the gaps in recent years. Unfortunately, gender inequalities are not the only inequality issue in the film industry. The most obvious one is arguably racial inequality, as minority actors and actresses systematically get fewer opportunities to work on “blockbuster” movies, compared to their white counterparts. Since there are fewer opportunities for Asian8, African9 and Latinx10 actors, it would be harder for them to be compensated to the same degree. As our society progresses into a more diverse and open-minded era, racial and gender-based inequities in the entertainment industry might be reduced over the course of time. However, it’s going to be an uphill battle, since the actors and actresses would often be afraid of possible repercussions from the film companies and directors.
A show cannot be made with just the stars of the show: one also needs support staff and other employees on set. A legal question then arises: would these staff members be equally protected by employment law? An unavoidable source of contention would be whether to define supporting staff members as employees or independent contractors. Different state governments have different tests on defining independent contractors: private contractual agreement regarding the characterization is frequently insufficient for legal determination of a worker’s status as an employee. In California, for example, a worker would be assessed under the “ABC test,”11 which would deemed him or her an employee unless three conditions were satisfied: (1) the worker is free from the control and direction of the hiring entity in connection with performance of the work; (2) the worker performs work that is outside the usual course of the hiring entity’s business; and (3) the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed. Based on this strict test, it might be not as easy to identify staff members as independent contractors in Hollywood, since this test affords them more protection under the California employment law.12
It’s absolutely jarring to see that the wage difference between high-paid actors and the less well-known actors or the rest of the staffers working on set. People come to the entertainment industry because films tell dreams and stories, people come work in the industry because they love films. While objective differences in contributions to the film do exist, such vast gaps in payment are unwarranted, and are sometimes egregious: a report in 2016 revealed that Netflix hires laborers to watch and grade Netflix shows, but classifies them under independent contractors, so as to pay them a salary lower than minimum wage.13
State regulators should thus strive to impose more regulations on defining independent contractors and voluntary works in the movie industry, and to offer more protection to the workers from being exploited by the large production companies. A film, however lucrative or sensational, can only make a certain amount of money. Once the pie is cut, larger shares should be reserved for the staffers and workers on set, leaving less for the producers and actors. A commitment to the principles of equity and justice demands it.