This hasn’t gotten a lot of attention outside of the business press, but Canwest has reached multi-million-dollar settlements with freelancers who have sued the company over what they argue are unauthorized uses of their works in electronic databases.
One of the settlements is with Heather Robertson, who leads a rather massive class action lawsuit against a bunch of publishers, and whose case reached the Supreme Court of Canada – and a decision in her favour, which led to the Globe and Mail settling. The case is still pending against other defendants, including ProQuest, Torstar and Rogers.
You can read the Robertson settlement here (PDF).
The other settlement is with a group called the Electronic Rights Defence Committee, which is a group of Gazette freelancers suing Canwest over the same issues, and which had only gotten class-action status last year.
The settlements are valued at $7.5 million and $9 million respectively, but the amount of cash actually distributed will likely come down as Canwest continues to go through restructuring under creditor protection.
The freelancers can thank this process for pushing these ancient cases forward. As the court-appointed monitor overseeing the restructuring put it in his report on the Robertson case (PDF):
The Settlement Agreement greatly reduced a large claim against the LP Entities and the resulting uncertainty to the CCAA Proceeding and facilitated the approval of the Amended AHC Plan by the requisite majority of stakeholders at the Creditors’ Meeting, which approval is vital to the successful restructuring of the LP Entities.
In the Robertson case, the original claim was for $500 million. In the ERDC’s case, $33 million.
Because the restructuring process requires settling outstanding claims, the freelancers’ lawsuits became an issue that it was easier to deal with quickly than fight.
The ERDC estimates it has about 800 writers in its class, which would work out to $11,250 each. This is above the $1,000 limit set for small creditors, which means they would not be getting cash payments in full, but an option for less cash or shares in the new company. The ERDC says it will hold that cash or stock in trust until the distribution is complete.
The settlement also would grant Canwest and its subsidiaries all the rights the freelancers were fighting to protect. In exchange for the cash, Canwest gets rights to use all articles submitted by all freelancers for whatever purpose it wants, including online publication or electronic archiving.
This means one of the primary goals of the ERDC, to render void these we-take-all-your-rights contracts that Canwest and others are forcing new freelancers to sign, will not succeed. Those freelancers who have signed such agreements, allowing Canwest to use their contributions for electronic media, are not considered part of the settlement group.
Players in the ERDC, including chair Mary Soderstrom, have kept quiet (except to announce the deal and promise more later) until the settlement reaches its final approval.
UPDATE (June 28): The ERDC has released a statement:
“We are pleased that freelance writers will eventually receive some compensation for their work used electronically, and that the other side explicitly acknowledges ‘the importance of protection of electronic rights and fair compensation for the electronic dissemination of content’,” said ERDC President Mary Soderstrom. “But we regret strongly that it has taken 13 years to get to this point, and that, because of the protection against creditors proceedings, freelancers will receive amounts much less than the face value of the settlements.”
She added that the ERDC also continues to maintain that contracts which freelancers have been forced to sign with The Gazette and Canwest are unfair.
A slight moral victory, I guess, though kind of empty if Canwest’s freelancing contracts can still demand all these rights at no extra charge.
Those who want to opt out of the class-action settlement have the chance to do so, although I can’t imagine why they would.
The ERDC will have a statement early next week about the situation. For the moment, please note that freelancers who signed contracts are nevertheless members of the class action, but the distribution of what ever amount will finally be realized will not be determined for some time.
I think it is disappointing that these amounts would not be “before the bankruptcy”, only because the was case was brought well before and the amounts are owing for work done long, long ago. I feel for the freelancers who have won an important victory, and likely will get pennies on the dollar net for their efforts.