‘Key & Peele’ Writer Claims Writers Guild Unfairly Wiped Out Royalties Payments for ‘Paltry’ Settlement Deal [UPDATE]

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Key & Peele showrunner Jay Martel has filed a proposed class action that claims the Writers Guild of America West, Inc. (WGA) has reached a “sweetheart deal” with Viacom Media Networks and several subsidiaries that essentially wipes out historic royalties payments for Comedy Central writers in exchange for a “paltry lump-sum payment.”

According to the lawsuit, while WGA initially filed an arbitration claim with Viacom and co-defendants Comedy Partners LLC; Central Productions LLC; LRF Development Company, Inc.; and Hello Doggie, Inc. (the “employers”) over the nonpayment of royalties for series featured on ad-supported video-on-demand services, the union thereafter failed in its duty to protect writers’ royalties rights in favor of preserving its relationship with the employers. Per the case, WGA reached a settlement with its co-defendants that “cannot possibly provide adequate compensation” for writers whose work has been streamed billions of times without the proper payment of royalties under their union-negotiated agreements with the employers.

The lawsuit claims WGA’s decision to settle was “possibly made in bad faith” and appears to prioritize the labor union’s relationship with the Viacom units as it “roll[s] up and cleans[es] the Employer Defendants’ years-long violations of the Basic Agreements for pennies on the dollar.”

The 18-page lawsuit out of California explains that the employer defendants are parties to the triannual Theatrical and Television Basic Agreements negotiated by WGA, which require that the companies pay television writers such as the plaintiff specified royalties for the commercial exploitation of their work. According to the suit, the employer defendants have for years failed to properly compute or even pay at all the royalties for television series, such as Key & Peele, The Daily Show with Trevor Noah and Tosh.0, that were featured on on-demand services.

The plaintiff, described in the suit as an Emmy and Peabody Award-winning writer and producer, claims the employer defendants’ exploitation of the television series in the on-demand market has been “nothing short of prolific,” with thousands of episodes and excerpts being uploaded to various platforms for streaming. While the Viacom units reaped “massive windfalls” from the growing consumer demand for on-demand services, they failed to pay proper royalties to the series’ writers as specified in their WGA agreements, the lawsuit attests.

Per the case, WGA proceeded to file an arbitration claim in October 2018 over the employer defendants’ alleged failure to pay proper royalties. Rather than inform affected writers, however, WGA “kept [them] in the dark” and “made no attempt” to gather evidence and organize an effective prosecution of their claims, the suit says. Instead, the case alleges, WGA ultimately abandoned the arbitration and agreed to a settlement through which the employer defendants’ historical liabilities to pay royalties were erased in exchange for a lump-sum payment. The lawsuit claims the settlement, which remains confidential, represents “a colossal failure” on WGA’s part to exercise its duty to represent the series writers given the payment in no way compensates them for the amounts they should have been paid.

The plaintiff says he and other series writers have never seen the settlement agreement, which allegedly provides no basis for the payment calculation. According to the case, however, “it is inexplicable” that the payment provides appropriate compensation for “years of underpayment and nonpayment” of royalties to the hundreds of writers who worked on the series, many of which are renowned and have been streamed billions of times. The fact that WGA took steps to hide the settlement from writers and third-party scrutiny “only reinforces its indefensibility,” the suit avers.

The plaintiff looks to represent anyone in the U.S., as well as their successors in interest, assigns, heirs, executors, trustees and administrators, whose claims for payment from the employer defendants in connection with the series were released under the WGA’s settlement agreement.

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