Sorry, We’re Closed

(Originally published in NYSBA Entertainment, Arts and Sports Law Journal Fall/Winter 2009 | Vol. 20 | №3 | pp. 56–58).
Typographical, citation, and minor stylistic corrections from published version.

The recent threat of a strike by the Screen Actors Guild (SAG) invites an examination of the union’s membership policies, especially one it implemented when it last went on strike. During its dispute with television commercial producers in the summer of 2000, SAG found itself in need of clerical assistance and bodies at the picket lines. It therefore advertised, offering to sell membership cards at 80 hours a pop, regardless of the actor’s level of experience or training. That much time volunteering in support of the strike, plus the usual initiation fee, would buy one the right to emblazon “SAG” atop one’s resume. So forceful and swift was the ensuing flood of volunteers that, long before the strike was over, SAG turned many away. Yet each who had already registered was permitted to complete the 80 hours, tender the initiation fee, and finally become a SAG actor.

SAG’s actions seem to have obscenely constituted an unfair labor practice, as a union is allowed to determine its own membership requirements, but forbidden from discriminating against those it excludes for any reason other than non-tender of initiation fees or dues. Through its basic agreement with the producers for whom SAG permits its actors to work, the union provides members with significant employment opportunities that it withholds from non-members. Perhaps, as a hiring hall, it retains the right to determine the competence of the workers it refers by requiring certain credentials. However, the 80 hours of unpaid labor it required of each “volunteer” had nothing to do with talent.

It is generally acknowledged in the acting community that regardless of an actor’s talent, diligence and formal training, one will be unable to make a living as an actor, and usually forbidden to even audition for the types of work that would enable one to support oneself, if one is not a member of the two major unions, SAG and Actors’ Equity Association (Equity). In order to join either, however, an actor must first obtain work under a union contract, such work generally being available only to union members. This catch-22 is well known throughout the film and television industries.

The SAG basic agreement requires signatory producers to hire at least a certain percentage or number of SAG performers for each production. The penalty for failing to do so is a fine paid by the producer to SAG for each union slot filled with a non-union actor. There are no comparable quotas for non-SAG artists, who, if and after they are fortunate enough to get a SAG job, cannot get another without first joining SAG. In Backstage, a weekly newspaper containing casting advertisements, the screen acting jobs are not divided merely into “Film” and “TV,” but also into “Film/SAG” and “Film/Non-SAG.” Jobs under the former heading are open only to union members, and almost always pay much better than those in the latter.

Further, via their longstanding contacts in show business, talent agents frequently are the only ones who find out about principal acting jobs, i.e., speaking roles. Furthermore, in order to represent SAG actors, agents must be franchised by the union. SAG defines the credentials that the agent must have in order to be franchised, and periodically inspects agents’ offices to ensure union members’ protection. Ross Reports was a periodical for which every issue contained a listing of talent agencies. Many of the entries used to read, “All SAG talent welcome,” while mentioning nothing of non-union talent. That phrase has since disappeared (and the new title is Call Sheet). This might be because it is now commonplace for actors to pay for the opportunity to audition for agents, who would be discouraging potential revenue by publicizing that they work exclusively with union artists.

In 1935 the original National Labor Relations Act (NLRA) was passed in the form of the Wagner Act, whose Section 8(3) prevented anything in the statute from precluding “an employer from making an agreement with a labor organization . . . to require as a condition of employment membership therein.”(1) This was an express approval of the closed shop, a type of agreement under which the employer could hire only workers who were members of the union prior to the time of hiring. However, since the 1947 passage of the Taft-Hartley Act, Section 8(a)(3) of the current NLRA has made it an unfair labor practice for an employer to encourage or discourage membership in a union through discrimination in hiring. Section 8(b)(2) makes it an unfair labor practice for a union to cause an employer to discriminate against an employee in violation of Section 8(a)(3). Section 8(b)(1)(A) prohibits a union from restraining or coercing employees in the exercise of their Section 7 right to refrain from union membership. Employers are equally prohibited by Section 8(a)(1).(2)

SAG’s paradoxical membership requirements, the fact that it withholds the more lucrative jobs for its members while franchising talent agents who might still refuse to represent non-SAG performers, and the refusal by SAG signatory producers to even audition non-members seem to be in direct violation of the Taft-Hartley Act. Yet a proviso to Section 8(a)(3) expressly legalizes the union shop, a system under which an employee must become a member of the union within 30 days (or more if the union so permits) after beginning employment. Though officially a member, a union shop employee need not attend any union meetings or maintain good standing with the union, which nonetheless may not breach its duty to provide the member with the fair representation to which he or she is entitled, as an employee in the bargaining unit represented by the union. Furthermore, the proviso states that, “no employer shall justify any discrimination against an employee for nonmembership in a labor organization . . . if . . . membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required.”(3) In 1963’s NLRB v. General Motors Corp.,(4) the Supreme Court validated the agency shop, under which non-union employees are not required to join the union, but must, in exchange for the union’s negotiation and administration of the collective bargaining agreement, pay the same initiation fees and dues that members pay. In 1988 that amount was simmered down to its “financial core,” in Communications Workers v. Beck,(5) as the Court held that under General Motors, a worker cannot be required to pay more than that portion of such dues and fees that is allocable to collective bargaining, grievance adjustment and administration of the collective agreement.

Non-SAG actors might have done well to file a complaint with the National Labor Relations Board (NLRB) before the strike of 2000. The NLRB very well might have found an unfair labor practice, as some writers have described the actors’ unions as de facto closed shops.(6) However, the one reason why it might not have done so is that Section 8(f) of the NLRA states that it is not an unfair labor practice for an employer and a union in the construction industry to make a pre-hire agreement, pursuant to which the union operates a hiring hall.(7) Such agreements are also utilized in the maritime business because, as in both construction and acting, the jobs tend to be short-term, with workers going from one project to another for different employers. The union tends to be the workers’ only permanent link to the business. The referral service of the union is frequently the most efficient way for an employer to find and screen employees, especially without risking labor troubles.(8) Within such a framework, the union may participate in the process of determining the minimum training or experience that one must have to qualify for referral by the hiring hall. Employees sign up through the hiring hall, announcing that they are available for hire. The hall refers such workers to an employer when it receives the latter’s request for laborers.(9) Likewise, the agreement may provide that a hiring hall is exclusive, in which case it is the only source of labor for the jobs it covers.

Noting the efficiency of hiring halls, the Supreme Court held in Local 357, International Brotherhood of Teamsters v. NLRB(10) that they are lawful as long as they do not create closed shops by treating non-members and members differently. Even an exclusive hiring hall does not violate Section 8(a)(3) unless it is used to encourage union membership through discrimination.(11) Therefore, in making referrals, an exclusive hiring hall may not treat employees differently based on their union status or activity; and if a hiring hall does discriminate against non-members, it does not necessarily create a closed shop unless it is exclusive. In short, a hiring hall is lawful as long as it is either non-discriminatory or non-exclusive.

Plumbers Local 81 (Morrison Construction Co.)(12) was a case in which an exclusive hiring hall lacked enough personnel for a particular employer, who, therefore, agreed with the union that other workers could be hired. These workers were not union members. Nor were they adequately skilled and experienced to join. The Board held that as an agency shop, the union could demand that all non-union workers pay initiation fees and dues, but not more than it uniformly required of its members. Additionally, pursuant to J.J. Hagerty, Inc.,(13) a union operating an exclusive hiring hall may charge non-members a participation fee if the fee is not excessive and reflects a proper allocation of the hall’s expenses. Therefore, the exclusive hiring hall and the union shop or agency shop are by no means mutually exclusive.

Prior to the 2000 strike, SAG may have been able to withstand the NLRB’s scrutiny as a hiring hall for actors. Its preferential treatment of members may have been viewed as an approximation of the hall’s seniority advantage coupled with the hall’s determination of the minimum experience one must have to be referred by it, since it is only very difficult, rather than impossible, for an actor to get that elusive first SAG job. Further, its requirement of membership before one’s second SAG job is legal in the union shop.

However, with its strike volunteer program, SAG seems to have brazenly crossed the line between mere de facto closed shop and explicit closed shop. The 80 hours of strike support that it required of the volunteers had absolutely nothing to do with acting, performing or artistry of any type. As mentioned above, as long as one promptly pays all the union fees and dues on time, one may refuse to engage in all other union activity, and the union may not take any action in retaliation, such as by expulsion, having the member fired or otherwise disqualifying him or her from employment. Actors who refused to donate 80 hours of labor to the strike were denied the membership that the volunteers received, which was blatantly predicated on participation in union activities, such predication being discriminatory. Now, Section 8(b)(1)(A) of the NLRA specifically precludes itself from impairing the right of a union “to prescribe its own rules with respect to the acquisition or retention of membership therein,”(14) so if membership had been the only thing kept from non-volunteers, that would have been fine, since SAG, as an agency shop, could still have accepted the financial cores of their initiation fees. Denying them official membership but giving them full access to all of the employment opportunities it makes available to its members would have been discriminatory but non-exclusive. Alternatively, SAG could have granted them union shop membership while maintaining its exclusivity as a hiring hall. That too would have been fine; exclusive but non-discriminatory. Instead, however, the union withheld the entire package, discriminatorily denying them both membership and the significant job opportunities that are exclusive to SAG membership. SAG thereby committed an unfair labor practice in direct violation of the Taft-Hartley Act.

It would seem that if an actor had complained to the NLRB, one risk would have been unofficial blacklisting from any future participation in show business. Additionally, despite the merits and the law, the NLRB might simply continue the courts’ lack of willingness to muster aggression against the two unions. In 1997 it approved a modification to a 1988 settlement that had opened a window into the closed shop of Equity, as non-members with certain qualifications were permitted to participate in union auditions for a small fee. But the members disliked the competitive draft, and the modification slammed the window shut.(15) Then, in the 1998 case of Marquez v. Screen Actors Guild, Inc.,(16) the Supreme Court held against an actress in her suit against SAG when she claimed that the union did not inform her that representation had been made less expensive by General Motors and Beck. Furthermore, even one of the writers who describe Equity as a de facto closed shop believes that it needs to remain as such, due to what would otherwise be an unmanageable number of bodies at truly open auditions.(17) The NLRB might think the same way about SAG.

On the facts, however, and under applicable labor law, the strike “volunteer” program appears to have unmistakably been an unfair labor practice.

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Endnotes

1. National Labor Relations Act, ch. 372, § 8(3), 49 Stat. 449, 452 (1935).
2. 29 U.S.C. §§ 157, 158(a)(1), (a)(3), (b)(1)(A), (b)(2).
3. Id. § 158(a)(3).
4. NLRB v. General Motors Corp., 373 U.S. 734, 735 (1963).
5. Commc’ns Workers of Am. v. Beck, 487 U.S. 735, 745, 762–63 (1988) (quoting Gen. Motors, 373 U.S. at 742).
6. See generally Emily C. Chi, Star Quality and Job Security: The Role of the Performers’ Unions in Controlling Access to the Acting Profession, 18 Cardozo Arts & Ent. L.J. 1 (2000); Mark D. Meredith, Note, From Dancing Halls to Hiring Halls: Actors’ Equity and the Closed Shop Dilemma, 96 Colum. L. Rev. 178 (1996).
7. See 29 U.S.C. § 158(f).
8. Julius G. Getman, Bertrand B. Pogrebin & David L. Gregory, Labor Management Relations and the Law 365 (2d ed. 1999).
9. Michael C. Harper & Samuel Estreicher, Labor Law: Cases, Materials, and Problems 180–81 (4th ed. 1996).
10. Local 357, Int’l Bhd. of Teamsters v. NLRB, 365 U.S. 667, 672–77 (1961).
11. Id. at 674–77; see also Bricklayers Local 1 (Denton’s Tuckpointing, Inc.), 308 N.L.R.B. 350, 352–53 (1992) (finding union’s refusal to issue work permits for union-protective reasons discriminatory).
12. Plumbers Local 81 (Morrison Constr. Co.), 237 N.L.R.B. 207, 208–10 (1978).
13. J.J. Hagerty, Inc., 153 N.L.R.B. 1375, 1377–79 (1965), enforced, 385 F.2d 874 (2d Cir. 1967); see also J.J. Hagerty, Inc., 139 N.L.R.B. 633, 636 (1962) (finding exclusive hiring hall agreements), enforced in part, 321 F.2d 130 (2d Cir. 1963).
14. 29 U.S.C. § 158(b)(1)(A).
15. Chi, supra note 6, at 8.
16. Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 44 (1998).
17. Meredith, supra note 6, at 180.

Image courtesy of Magnific.