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Lucasfilm settles antitrust case over wage suppression of top animators

Moviemaker Lucasfilm Ltd. settles case alleging it engaged in anticompetitive employment practices to preclude bidding wars for industry's top animators, US antitrust lawyers said Tuesday.

By Staff writer / December 21, 2010

A scene from the 2008 Lucasfilm animated movie 'Star Wars: The Clone Wars.' Federal antitrust lawyers say that the movie studio entered into a secret agreement with Pixar to restrain competition for digital animators.

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Federal antitrust lawyers announced Tuesday that they have reached a settlement with Lucasfilm Ltd., preventing the San Francisco-based motion picture production company from engaging in anticompetitive employment practices.

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The company allegedly sought to undercut the ability of digital animators to work at competing companies and receive full compensation for their skills.

According to federal officials, Lucasfilm had entered an agreement with Pixar that neither company would try to hire away each other’s employees. The companies also agreed to notify each other when making a job offer to an employee of the other company, and that when offering such a job, not to counteroffer with compensation above the initial offer.

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The action prevented potential bidding wars for certain highly prized animators.

Justice Department lawyers filed a civil antitrust complaint in federal court in Washington on Tuesday alleging a secret agreement between Lucasfilm and Pixar. They also filed a proposed settlement resolving the charges.

“The agreement between Lucasfilm and Pixar restrained competition for digital animators without any procompetitive justification and distorted the competitive process,” said Christine Varney, assistant attorney general in charge of the DOJ's antitrust division, in a statement.

The proposed settlement, if accepted by the court, would resolve the department’s concerns, she said.

The case stems from a broader Justice Department investigation into anticompetitive employment practices at high-tech companies. Similar settlement agreements have been entered into with companies including Pixar, Google Inc., Apple Inc., Intel Corp., Intuit Inc., and Adobe Systems Inc.

Lucasfilm was founded in 1971 by George Lucas. It has produced box-office blockbusters including the "Star Wars" series and the "Indiana Jones" films.

Digital animators with specialized skills are in strong demand in the film industry. But the complaint alleges that Lucasfilm and Pixar interfered with the price-setting mechanism that would have operated in a free market for highly skilled labor.

The proposed settlement would run for five years and prohibits Lucasfilm from engaging in anticompetitive employment practices in hiring and retention of employees.

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