7 companies, including Pixar, Lucasfilm, and Dreamworks, have been named in a class action lawsuit regarding the violation of the Sherman Anti-Trust Act, which prohibits certain business activities that federal government regulators see as hindering market competition. By sharing salary numbers and entering into “no-poaching” agreements with one another to not recruit each other’s employees, these companies have essentially kept employee salaries from being competitive while their skyrocketing profits continue to line the pockets of the higher-ups.
As of April 2014, a settlement of $324 million has been proposed, a figure the presiding U.S. District Judge Lucy Koh has not yet approved, deeming it too low.
THE BEGINNING OF THE END
The Techtopus began to take shape no later than January 2005, when Pixar and Lucasfilm made a three-part deal that would restrict the recruiting of each other’s employees. First, Pixar and Lucasfilm agreed they would not cold call each other’s employees. Second, they agreed to notify each other when making an offer to an employee of the other firm. Third, they agreed that, when offering a position to the other company’s employee, neither would counteroffer above the initial offer.
Senior executives from both Pixar and Lucasfilm signed off on this agreement covering all animators and other employees through direct and explicit communications; furthermore, Pixar drafted and communicated the written terms of the agreement to Lucasfilm.
When Sony Animation started to woo Pixar employees by offering higher salaries, Ed Catmull himself flew down to LA to discuss the MO of the industry. To Catmull’s consternation and perhaps surprise, Sony Animation co-heads Penney Finkelman Cox and Sandy Rabins refused to play ball. Catmull was not happy at all about this, writing in an email to Disney Studios president Alan Bergman, “…and given Sony’s extremely poor behavior in recruiting practices, I would feel very good about aggressively going after Sony people.”
And with that, Pixar officially went over to the dark side.
Why focus on Pixar when there are 6 other companies involved in Techtopus, such as Google and Apple? Because of stories like this, as relayed by Bob Sutton, who was invited to talk a number of times at Pixar:
Pixar veteran Craig Good (who has been there at least 25 years — I think he said 28 years), came up and told me an astounding story…The story occurred to Craig because he’d just heard me claim that the best bosses serve as human shields, protecting their people from intrusions, distractions, idiocy from on high, and anything else that undermines their performance or well-being.
For him, that brought to mind the year 1985, when the precursor to Pixar, known as the Computer Division of Lucasfilm, was under financial pressure…[George] Lucas had brought in a guy named Doug Norby as President … and as part of his efforts, Norby was pressing [Ed] Catmull and [Alvy Ray] Smith to do some fairly deep layoffs. The two couldn’t bring themselves to do it. Instead, Catmull tried to make a financial case for keeping his group intact…But Norby was unmoved. As Craig tells it: “He was pestering Ed and Alvy for a list of names from the Computer Division to lay off…Finally came the order: You will be in my office tomorrow morning at 9:00 with a list of names.”
So what did these two bosses do? “They showed up in his office at 9:00 and plunked down a list,” Craig told me. “It had two names on it: Ed Catmull and Alvy Ray Smith.”
As Craig was telling me that story, you could hear the admiration in his voice and his pride in working for a company where managers would put their own jobs on the line for the good of their teams. “We all kept our jobs,” he marveled. “Even me, the low man on the totem pole…”
Clearly not so anymore.
It is too bad that even the founders of Pixar have succumbed to avarice and selfishness, and their work has suffered for it, but perhaps the recent class action suit against them will be a wake-up call to the geeky idealistic dreamers they were 40 years ago, techies who remained steadfast to their dream until the progress of technology finally matched their lofty intentions for computer graphics and the age of 3D animation was born. May they remember all the blood, sweat, and tears that their young artist and techie employees now equally shed and re-think overworking and underpaying them.
Pixar, instead of fixing the game, let the flow of fair competition re-enter the arena and see which studio is truly worthy of the best talent out there. You have been the gold standard for many young artists and techies alike, having set the bar so high from the get-go, not only for computer animation but also for the work culture you had intentionally fostered to not be like the other studios. Let the dream and art of the whole thing guide you back on the right track again.
A gauntlet has been thrown; will Pixar pick it up?