BY: BECKY STOCKEL
On Friday, March 30, the Screen Actors Guild (“SAG”) and the American Federation of Television and Radio Actors (“AFTRA”) overwhelmingly approved a merger to form one union for all performance artists. This merger affects over 150,000 actors, journalists, musicians, writers, editors, puppeteers, singers, stunt performers, and others who perform on stage, television, radio, video games, and other media.
The new union, SAG-AFTRA, will change various aspects of the entertainment industry for the better. First, it will eliminate competition between the two former unions to represent performers in high-profile shows. It will also change the way dues are paid for many members who previously maintained memberships with both unions. The fee structure under the new constitution provides for income-based dues so that those members who earn the most pay the most. For most members who belonged to both unions separately, dues will decrease.
This merger has been a long time coming. SAG and AFTRA were each formed in the 1930’s in an effort to protect the employment rights of performance artists. The idea to unite the two unions has been present in the performing arts community for about eighty years. The concept has even been put to a vote twice before – first in 1998-99 and again in 2003. Both times, AFTRA approved of the merger but SAG did not.
Despite the overwhelming advantages of the merger, some members of SAG are still voicing their opposition to it. In late February, a group of actors led by former SAG President Alan Rosenberg, Martin Sheen, Ed Harris, Valerie Harper and Edward Asner, approached a federal court once again to block the merger. In addition to allegations of labor law violations, their law suit charges the SAG board of directors with a breach of fiduciary duties for failing to do take a hard look at the impact of the merger on members’ health benefits and pension plans.
SAG Attorneys deny these allegations, saying that “a proper feasibility study was conducted.” SAG’s reply brief, in part, reads:
This lawsuit is a clear attempt at circumventing the will of the membership. . . . It is disappointing that this group seems dedicated to preventing their fellow members from exercising their democratic right to vote on their futures through the union’s fair and established referendum process which is already underway.
After ballots were sent out to over 131,000 members of the two former unions, plaintiffs moved for a preliminary injunction that would have prevented the votes from being counted. The court denied the injunction on Wednesday, March 28. In his denial, Judge James Otero said:
Voting in favor of merger may or may not be in the best interest of the majority of Union Members. But the decision, for better or worse, belongs to the Members – not to Plaintiffs, and certainly not to the Court.
In the same opinion, Judge Otero denied Defendant’s motion to dismiss, meaning that the breach of fiduciary duty claim remains. The judge’s opinion did indicate that the plaintiffs did not offer enough evidence to show the health benefits and pension plans will be put at risk by the merger. Despite this, the fact that it survived the defendants’ motion to dismiss could be important. It can become the subject of intense discovery, depositions, and could be argued in court or, as Santa Clara Law Professor Steve Diamond said, used by the plaintiffs as a “bargaining chip to use with SAG in exchange for dropping the law suit.”
When put to a vote, SAG approved of the merger by 82%, and AFTRA approved by 86%. Only 60% approval was needed from each union. When asked about the benefits and pension issues, SAG representative and SAG-AFTRA Co-President Ken Howard said that these will be fully addressed in due time, but did remind members, “Vested pensions are protected by federal law. So they will not be diluted.”
AFTRA representative and Howard’s Co-President Roberta Reardon added, “We stand as one. This new union will give us the collective voice and presence to protect our present contracts.”
 Michael Cieply, Merger of Performers Unions Approved, N.Y Times (Mar. 30, 2012), http:/www.nytimes.com/2012/03/31/business/media/merger-of-screen-actors-guild-and-aftra-approved.html.
 Supra note 1.
 Jonathan Handel, SAG/AFTRA Merger Passes: It’s Now SAG-AFTRA, The Hollywood Reporter (Mar. 30, 2012), http://www.thehollywoodreporter.com/news/sag-aftra-merger-passes-sag-306398.
 Actors Sue to Block SAG-AFTRA Merger, Law and Industry Daily (Feb. 24, 2012), http://legalnewsgroup.com/2012/02/24/actors-sue-to-block-sag-aftra-merger/6215. (The case is Martin Sheen et al v. Screen Actors Guild et al, No. CV-12-01468, Central District of California (Los Angeles)).
 Dave McNary, Judge OK’s SAG-AFTRA Vote, Ruling Denies Attempt to Block Merger Between Unions, SAG Watchdog (Mar. 28, 2012), http://www.sagwatchdog.com/wp/2012/03/28/judge-otero-denies-preliminary-injunction-in-sheen-v-screen-actors-guild/.
 Arlin Miller, Judge Otero Denies Preliminary Injunction in Sheen v. Screen Actors Guild, SAG Watchdog (Mar. 28, 2012), http://www.sagwatchdog.com/wp/2012/03/28/judge-otero-denies-preliminary-injunction-in-sheen-v-screen-actors-guild/.
 Supra note 5.
 Nikki Finke, SAG-AFTRA Merger Approved! 81.9% of SAG Ballots Returned Voted Yes; 86.1% of AFTRA; Single Union Effective Immediately, Deadline Hollywood (Mar. 30, 2012), http://www.deadline.com/?s=sag-aftra.