Litigation
Aug. 13, 2002
Models Sue Agencies for Price Fixing
Think of a fashion model, and you're likely to conjure images of exotic fashions, glittering jewelry and unbelievable amounts of cash.
Think of a fashion model, and you're likely to conjure images of exotic fashions, glittering jewelry and unbelievable amounts of cash.
But the reality, according to some, isn't quite so rosy. Despite the glamour, many models are quite oppressed, critics say.
And the models have taken their grievances to the courthouse. The industry is the focus of a complaint filed recently in federal District Court in Manhattan. In the suit, the bevy of bombshells accused several modeling agencies of charging exorbitant commissions and conspiring to fix fees.
The net effect of these alleged violations is that the models - who aren't well-known names - are getting shortchanged in the money department, the plaintiffs contend.
The plaintiffs are seeking class status for the case. Formal responses from the companies, which include Ford, Elite and Wilhelmina, are due at the end of August. A pretrial conference has been set for Sept. 12 in New York federal court.
The plaintiffs say the companies characterize themselves as model "managers" when they are modeling "agencies." That difference is crucial, they contend, because New York state law caps modeling-agency commissions at 10 percent of the model's total earnings. The companies are accused of circumventing the law by calling themselves managers, a designation that carries no such caps on commissions.
Through a series of meetings and exchanges over the past few decades, the defendants banded together to recast themselves as "managers" and fix prices, thus violating antitrust law, the plaintiffs allege.
Because of this alleged scheming, the typical commission charged by these companies is 33 percent, violating New York's caps on agency commissions, according to the plaintiffs.
The whole situation is one more example of the greed that has gripped corporate America, according to Los Angeles attorney Brian Rishwain, whose firm, Johnson & Rishwain, filed the complaint along with Boies, Schiller & Flexner. New York partner Andrew Hayes leads the Boies Schiller team.
"In an Enron-Anderson-Merrill Lynch kind of way, these companies have had their hands in their clients' pockets for 30 years," Rishwain says. "Deception and theft are the same, no matter what industry you're in."
Several of the modeling companies call the allegations absurd.
"Wilhelmina has not engaged at any point in price fixing," Dieter Esch, president of Wilhelmina International, asserts. "Wilhelmina believes the case will be dismissed when the appropriate motions are made in court."
Robert Tolchin, who represents the Next company, says the allegations that the defendants conspired to stifle competition are "ridiculous."
And Robert Goodman, an attorney representing Elite Model Management, describes the modeling industry as a competitive, cutthroat business.
"Modeling agencies are vying with each other for the best modeling talent, and that would make coordinated action on the level of price fixing unsupportable as a matter of practicality," Goodman says.
He adds that he has served a motion asking the plaintiffs to withdraw the complaint.
But Rishwain says the plaintiffs are portraying an accurate view of the industry. As of press time, Rishwain said he expected to add more plaintiffs and defendants.
But most models don't want to bite the hand that feeds them, he says, so the industry practices have gone unchallenged for a long time.
"The agencies have incredible power - they're the ones that are your lifelines to work," he says.
Toni Vranjes
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