Schrödinger's Employee
Back in my screed about why it’s better that we don’t retain copyright, I made the point that labor unions in the U.S. can only represent employees. That’s why novelists, for instance, can’t be unionized. They retain copyright. As such, they’re independent contractors.
Recently, a fellow writer challenged this with a very interesting question. “If the WGA can only cover employees, then how can it cover options?”
Why is that a good question? Well, when a producer options a script, he does not purchase it. The writer still retains copyright. The producer is merely paying the writer to not sell it to anyone else for a specific amount of time. The producer has the option of then purchasing the material at a later date.
Yet, the WGA does cover options, meaning that it has a basic set of minimum terms in place and it collects dues on the options and represents writers in grievances if the option terms are violated. But if the optioner hasn’t yet been employed, then how can the WGA cover her?
Let’s wind back to get to the bottom of this.
When the WGA was founded, screenwriters worked in the studio system. They were employees in the truest sense of the word. As the studio system crumbled, the existence of the spec market was born.
Spec writers can either sell their scripts to a company, or they can option their scripts to a company.
This new development posed something of a problem to both the WGA and the companies.
The companies have always wanted the copyright in the screenplays they develop for reasons I’ve stated before: they exist to exploit intellectual property, and the most efficient way to exploit intellectual property is to own the copyright.
The union has always wanted screenwriters to have the benefits of collective bargaining (like residuals, P&H, credit protection, and minimums), because if one segment of screenwriters don’t receive those benefits, all screenwriters suffer.
Over the course of the years following the collapse of the studio system, the WGA successfully negotiated to cover options and spec sales. Given that spec writers and optioners weren’t working as traditional employees (having been assigned material, for instance), how did the WGA achieve this?
Let’s take the case of the spec script first. When you sell a spec script, the companies routinely (meaning, 100% of the time) require the sellers to engage in a legal maneuver. That maneuver states that even though you wrote the script on spec without any promise of employment, the purchasing company actually “commissioned” you to write it, and it’s really a work-for-hire.
In other words, when you sell a spec, you lose your copyright. In return for losing your copyright (and becoming an employee as it’s legally understood), you gain the benefits of WGA coverage, including the MBA and its collectively bargained terms.
So far, so good. Sell a spec…you’re still an employee, and the WGA covers you by default.
But what about options? The whole point of an option is that you haven’t sold the script.
Here’s what the WGA and the companies did. They agreed that, per the MBA, a writer who options material to a signatory is an employee.
Let me repeat that again, because it’s the essence of the solution. If you option material to a signatory, you’re an employee because you’ve met the MBA definition of employee, even if you don’t meet the traditional definition of employee.
Just like that.
Okay, fair enough, but doesn’t that open the door, then, to the WGA doing precisely what I’ve said along that it can’t do? Can’t we just define novelists as employees, even though they retain copyright just like the script optioners?
No.
The companies have only agreed to let us define an option as employment if and only if the optioned screenplay has not been exploited. Remember, if you own the copyright on something and you exploit it, you can never engage in the legal “maneuver” that says it was really a work-for-hire. The toothpaste is out of the tube. Warner Brothers can’t pay Stephen King any amount of money to claim that Salem’s Lot is now, in fact, a work-for-hire. Hell, we couldn’t even get novelists into our union if the companies did agree, because our new novelist-friendly MBA definition of employee would be in total and stark conflict with labor and copyright law.
Therefore, the WGA and the companies allow an option of an unexploited screenplay to be covered because the intended fate for the optioned material is that it be sold to a signatory…and when it gets sold, it will be sold as a commissioned work-for-hire…which is possible only because it hasn’t been exploited.
Hence, the title of this piece. When you option a screenplay to an employer, you are not an employee (you retain copyright) and you are an employee (a collective bargaining agreement has defined your transaction as that of an employee).
Let me conclude all this wonkiness with a point that you might actually find relevant. We will never improve the terms and conditions of our employment if we do not understand them. I’ve been working for a decade in this business, and I didn’t understand the distinctions I’ve written about today until, oh, yesterday. I don’t know how many writers I can evangelize as fellow wonks, but I hope the numbers increase. If we don’t learn the rules of the game, we will always be at the mercy of others who do.
That’s why I’m learning.
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Over at The Artful Writer, there are articles on format quirks, how spec sellers can be considered employees, organizing video game writers and a bunch of other interesting stuff.... Read More
Wow, talk about something to think about. Very insightful, and informative as always! Just new to the WGA, and quickly learning how much I DON’T know. And that’s from a point of view where I thought I had a good grasp of it.
Well put, Craig. For more on this topic of relationships, see the recent HARPERS magazine with the amazing essay by David Mamet.
Thankyou.
Craig, thanks for working up that response. It makes total sense. Also, in case I haven’t said it before, thanks for this great site.
You’re very welcome, guys.
And Rock…welcome to the WGA. Keep reading, you’re already miles beyond 90% of the rest of the members now. :)
Hello Craig,
Fascinating article, one I’ve had to read more than once in order to grasp (and I imagine I may have to read it a few more times) but I do have one question for that I don’t know if you’ve addressed - what about an independent film, written, financed and shot by the same person, (like Blair Witch, Clerks, Brothers McMullen, etc) that gets picked up at a festival for distribution? I know in two of those cases, the writer and director are the same person and the director’s deal is usually different, but I have a couple of independent scripts on the dock for possible production, hence my interest (I’m not yet union, though I hope to be someday soon) - If an idie shows at a festival and is picked up, is the writer required to give up copyright at that point for a distribution deal, even though he or she wasn’t hired to write it, it’s already written and shot?
Craig:
I wonder if you are not being unduly influenced by current conventional thought. On the one hand, you say:
On the other hand, you say:
The reasoning you provide to support your answer is that a novelist’s work is already exploited, so the fiction of employment cannot apply to the purchase of the novelist’s work. Specifically, you say:
This is, at best, a pretextual distinction. I suggest there are many creative solutions to this problem. For example, organize novelists to obtain representation before they publish. WGA would not only represent them as to motion picture contracts, but as to the original publishing deals. Another possibility, create the legal fiction that, because the motion picture rights have not been sold yet, they have not been exploited. As to motion picture rights, novelists are “employed” by the studios. (Remember, a legal fiction is not real, so this is no more absurd than saying optioning rights in a screenplay creates the status of employment.) Yet another possibility, start by organizing novelists to have the WGA act as their bargaining unit for only those sales which involve selling motion picture rights before the novel is sold or published, which is not uncommon. Once this representation is established, it provides a base of power to expand representation in the future.
Obviously, none of these solutions is easy to accomplish nor are these things the WGA can do unilaterally. In addition, there may well be strong market forces at play that prevent the WGA from organizing novelists, or the WGA may not consider it advisable to put resources into this effort for its own reasons. I’m not saying it should. I’m just saying, challenge all assumptions. If the WGA has a worthwhile goal, don’t let a little thing like a legal fiction stand in the way.
Joshua asked:
I’m not sure. It depends, I think, on how the film is produced and how it’s sold. However, I do know that there are ways for the WGA to cover independent films; if you’re thinking about making one, I suggest you call the Guild and ask for information about their indy film coverage.
Jon suggested:
The only way we could do that is if novelists intended for their works to be purchased as works-for-hire prior to exploitation. Remember, the companies agree to essentially “look the other way” on the copyright situation with options because the scripts will ultimately become works-for-hire.
I don’t think novelists would agree to that, because unlike our situation, their written work is exploitable in its written form. The reason companies want our copyright is the same reason we give it to them: our screenplays are not exploitable in and of themselves, and the companies can’t efficiently make movies without owning the screenplays.
Novels are exploitable in and of themselves. Thus, it would make no sense for a novelist to work as an employee. It’s advantageous for the owner of the publicly exploitable work to maintain copyright.
Screenplays are not publicly exploitable.
Craig:
I agree with you that they probably wouldn’t do that now, but only because they are not that interested in the benefits of collective bargaining. Otherwise, they would agree. Authors typically assign rights to the publisher for the life of the copyright, anyway, so it is a change in form more than substance. My poorly made point was not that authors would jump on board, but that looking at a legal fiction and assuming it is written in stone only limits possibilities.
Craig - great site by the way.
I’m interested in this issue because I recently sold an original script to Sony and my lawyer said it’s better to sell the script as an individual copyright holder, where as the re-writes on the same script were a separate “work for hire” deal via my loan out corp, like a writing assignment or book adaptation.
Apparently by selling my copyright as an individual and not a corporation it canot be characterized as a “work for hire”?
Have you heard of this?
Jon:
My understanding isn’t that they wouldn’t do it only because of a lack of interest. They wouldn’t do it because of a lack of interest and a compelling legal argument that such material is not coverable by a union.
If this seems contradictory…all I can say is that I can say no more, because I’m starting to get into some touchy areas. This much I know, though. Novelists who retain copyright cannot be represented by a labor union.
Trevor:
Huh. When you sold your script to Sony, I’m not sure how you did it. If the sale of the spec wasn’t a work-for-hire, then was it a copyright transfer? A license? I’d need to know more details.
Craig -
I’m looking at the contract right now and it was an “Aquisition of Rights” agreement with a copyright assignment…
Interestingly, we did an option deal with Universal for a different original screenplay of mine, and my lawyer again required them to do the option contract with me as an individual, then did a separate deal for re-writes via my loan out corp…
For the record my lawyer is highly regarded at a very established entertainment law firm and I know this is a policy they have to protect their clients… maybe I will call him to get a more clear understanding of how this works…
Trevor:
Okay, so you assigned copyright rather than apply work-for-hire. Not sure what the difference is in terms of protections for you. The WGA covers both maneuvers.
Could you find out what protections this affords you? I’d love to know.