Posted: Mon., Feb. 27, 2012, 3:58pm PT
Opposition says it sought delay in spending on merger proposal
By Dave McNary
With ballots beginning to hit members’ mailboxes, opponents of the SAG-AFTRA merger have amended their lawsuit against SAG to ask for a jury trial and monetary damages.
Move comes a week after the four-count civil complaint was filed in Los Angeles. Plaintiffs allege the Screen Actors Guild and its leaders are attempting to merge with the American Federation of Television and Radio Artists “without conducting the necessary due diligence.”
SAG has labeled the suit “a clear attempt at circumventing the will of the membership” and “a public relations stunt” and has moved to dismiss it.
Plaintiffs’ attorney David Casselman of Wasserman, Comden, Casselman & Esensten told Variety that SAG is spending more than $2.5 million on the merger. Ballots are being mailed to 120,000 SAG members and 70,000 AFTRA members, touting the combo as giving performers more bargaining clout. To be approved, the merger must receive at least 60% of the votes from each union.
The suit is aimed at preventing SAG from counting the votes on March 30. The amended complaint alleges that the plaintiffs had requested a delay in spending until SAG fulfilled its own fiduciary rules.
“The individual defendants intentionally and knowingly refused to abide by the SAG constitutional requirements, board resolutions and their fiduciary obligations to the members,” the complaint said. “They should now be obligated to reimburse SAG for all funds expended, whether by staff or for otherwise, for time and expense associated with this unnecessary and improper merger effort.”
The lawsuit, filed by more than 60 SAG members including Martin Sheen and Ed Harris, also contends that SAG is violating its own rules by not conducting a comprehensive analysis of combining the SAG and AFTRA pension and health plans — which are operated separately from the unions and overseen by union-industry boards. The unions’ summary of the feasibility study, containing opinions of seven attorneys with experience in the field, noted that several hundred multi-employer pensions have merged over the past 25 years and that there is no legal obstacle to merging the SAG and AFTRA pension and health plans.
Monday’s filings by the opponents included a declaration by Alex H. Brucker, an attorney with three decades of experience in employee pension and health plans, that blasted SAG for asserting that merging the unions and the plans would “only benefit” participants and that “merger is the best way to protect our benefits.”
“These are not supportable statements of fact,” Brucker said.
Merger backers contend that combining SAG and AFTRA will make it easier to combine the plans as a first step toward resolving the problem that performers face in making contributions to the separate plans and then not meeting the earnings qualifications. Brucker said in his declaration that the question of merging SAG and AFTRA is “indistinguishable” from the question of merging the plans and can’t be considered separately.
“It is my opinion, based on my careful consideration of this issue, that a plan merger raises complex issues, could create serious problems and conflicts and could result in loss of benefits for both SAG and AFTRA members,” Brucker said. “The precise impact on plan benefits (or required member and co-sponsor contributions) cannot be properly assessed without an ERISA (Employee Retirement Income Security Act) Impact Report.”
A.L. Miller SW Editor & Chief