Is the WGA Writer’s Strike a Force Majeure Event?
The term “force majeure” is a commonly used concept in various commercial contracts, referring to unforeseen events beyond the control of either party. Within the realm of Hollywood contracts, studios frequently employ this clause, not only for Writers Guild of America (WGA) strikes but for any union strike, allowing them to avoid compensating striking union members who were previously entitled to compensation, under fairly lucrative agreements.
Suspension and Termination
When a studio invokes the force majeure clause in a specific contract, the initial response typically involves a suspension of the project or production, extending the duration of the deal for as long as the event persists. However, these clauses may also grant the right to terminate the contract outright after a specified period, which some striking WGA writers believe studios perceive as a potential cost-cutting measure. With mounting pressure to reduce overall expenditures on streaming content, studios view prolonged strikes as an opportunity to potentially cancel projects.
The application of a force majeure clause depends on the precise language contained within the agreement between the studio and its writers. Generally, a force majeure clause in the entertainment industry does not immediately lead to termination; rather, it usually results in a temporary suspension. However, if the delay continues for an extended period, the contract may grant the production company or studio the unilateral right to terminate it.
The studio’s rationale for invoking its force majeure clause can be quite broad, and even include non-obvious reasons, such as raw financial considerations, i.e.: the cost to produce a show will eclipse the show’s projected revenue, or the unavailability of key talent to work on a specific show after a strike concludes. Even if the project is not canceled, the studios may explore their options of outsourcing film production to companies abroad unaffected by the strike, such as those in Canada or Europe.
What Can The Writers Do?
In the unfortunate event of termination, the legal options available to WGA members are slim. Writer-producers, a fairly common designation, could try to sue their studio, arguing that their production services are distinct from writing services and deserve separate compensation. However, historically, the WGA has taken a different stance, asserting that producer services inherently involve writing.
A writer may have a chance of success in their claim if their contract with the studio does not explicitly define a strike as a force majeure event. In such cases, the writer could argue that the strike was a foreseeable event, known to the studio in advance, and, as a result, the studio does not have the right to invoke the force majeure clause or terminate the agreement.
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