Another Big Legal Loophole

As some readers of F&SF may have read, the Disney corporation is stiffing author Alan Dean Foster. According to Foster, Disney has not paid royalties since 2014 on Star Wars books that Foster wrote. Disney has not responded to his inquiries and claims, and, in fact, Disney’s attorneys won’t even discuss the matter with Foster unless he signs a non-disclosure agreement. Alan and his wife are in poor health, and it would certainly be helpful to have the royalty payments he’s owed.

All Disney has said is that they only bought the “properties,” but not any contractual liabilities associated with those properties. If this position is applied across the economy, any corporation could sell itself and all its holdings to another corporation and shed its liabilities, stiffing its creditors.

Now… from what I can determine, while corporation employees can at least bring payment problems to the Labor Department, the only recourse Foster or any author or independent contractor has for non-payment is a civil lawsuit. The problem with this “recourse” is that virtually all independent contractors lack the financial resources to afford the extensive legal costs required to sue a mega-corporation and, if they had the resources, it normally wouldn’t make sense financially to pursue such litigation.

The late Harlan Ellison pursued copyright violations with a vengeance, spending over $40,000, according to one report, just in going after internet pirates. He also sued publishers and CBS, among others, but most of those lawsuits were before media became mega-corporations. He once was hired by Disney as a writer, and was almost immediately fired by Roy Disney. Most writers and independent contractors have neither the time nor the funds to do the same… and they shouldn’t have to.

Equally to the point is that the legal precedents go far beyond Alan Dean Foster’s situation or the applicability to other authors. I certainly can’t find any federal criminal statute that applies to failure to pay independent contractors, and with the expansion of the “gig economy,” unless something is done legislatively, it’s quite possible that other mega-corporations will follow Disney’s example. In effect, corporations could fail to pay independent contractors, as Trump has done on more than a few occasions, or underpay them even more, almost with impunity. While I suspect this is already occurring in cases besides that of Alan Dean Foster, unless the law is changed, those occurrences are bound to increase… and it’s just another example of why government action is necessary to rein in the mega-corporations, because individuals can’t muster the power or the resources to obtain fair treatment.

2 thoughts on “Another Big Legal Loophole”

  1. R. Hamilton says:

    A purchaser assumes both assets AND liabilities, right? Even in a bankruptcy, one doesn’t necessarily escape everything, and there certainly was no bankruptcy involved in Disney buying Lucasfilm.

    Whatever convoluted means they came up for such a position, should not be allowed to stand.

    One could argue that Disney has already had many things their way too much, since they were said to be influential in repeated extensions of copyright, such that it came to be said that the extensions were so that the copyright on Mickey Mouse (first appearing on-screen November 18, 1928) would not expire.

    1. Grey says:

      Disney can afford top shelf lawyers, so it’s interesting to me that they are holding out on this (my understanding is the same as yours). It does seem like an odd hill to die on given the relatively low amounts at stake; none of those authors were getting rich off of those writing gigs. But, perhaps in the aggregate it’s a meaningful amount.

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