Class Action Claims “Sweetheart” Deal Between Writers Guild, Viacom Over Streaming

Hollywood Reporter

March 18, 2021

By Eriq Gardner

Former ‘Key & Peele' showrunner Jay Martel is leading a suit that alleges the WGA has breached its duty of fair representation with respect to royalties owed comedy writers like those who work on ‘The Daily Show with Trevor Noah.'

Are some of television's top comedy writers getting all the money they can from the fact that thousands of episodes are available on streaming platforms? Perhaps not, according to a new lawsuit. On Wednesday, a putative class action was brought alleging that Viacom's Comedy Central units are breaching a collective bargaining agreement — and that the Writers Guild is maintaining a clandestine settlement agreement.

Former Key & Peele showrunner Jay Martel is leading the charge with a suit on behalf of himself and others similarly situated.

His complaint alleges that for years, Viacom subsidiaries failed to abide by the terms of the CBA “by improperly computing or simply not paying residuals owed thereunder for the use of television motion pictures in new media, in particular with respect to ad-supported video-on-demand services. The Employer Defendants clandestinely undertook this pattern and practice across dozens of television programs (including, by way of example, Key & Peele, The Daily Show with Trevor Noah, and Tosh.0).”

A settlement, one that Martel characterizes as a “sweetheart deal,” was then allegedly worked out between the Viacom units and the WGA.  It “wip[ed] out the Employer Defendants' historical liabilities across the Series in exchange for a single paltry lump-sum payment.”

How much? That's unclear.

“The WGA and the Employer Defendants then proceeded to bury the Settlement Agreement in confidentiality,” continues the complaint, later adding that the concealment resulted in the non-discovery of the “startling inadequacy of the Settlement Payment.”

Martel asserts that Viacom has reaped “massive windfalls from exploitation” of the episodes while the settlement “represents a colossal failure of the WGA to adequately discharge its duty of fair representation,” the result of a union that “failed to undertake even basic investigatory steps that would have bolstered its claims in arbitration” and “can only be explained by a lack of a sincere effort to protect Class members' rights.”

Viacom hasn't yet commented.

In a statement provided to THR, WGA West acknowledges the settlement and sources some potential frustration. According to the statement: “The WGAW filed a claim against Viacom for failure to pay proper residuals on a number of their shows.  The case settled prior to arbitration for the full amount owed to writers, plus interest payments and penalties for failure to report.  The writer's frustration with the outcome stems from the fact that current industry collective bargaining agreements provide a fixed payment for the first year of free streaming and allow companies to exclude significant ‘promotional' use of program excerpts from residuals payments.  That's a frustration the WGA shares, but it can only be solved in collective bargaining, not via arbitration, and much less by meritless lawsuits.”