Just in: Major labels are sued by union for not paying pension subs

This could run and run.

The American Federation of Musicians and Employers’ Pension Fund (AFM Pension Fund) is suing Atlantic Recording Corporation (Atlantic), Hollywood Records (Hollywood), Sony Music Entertainment (Sony), Universal Music Group Recordings, Inc. (UMG), and Warner Brothers Records, Inc. (Warner) for failing to make pension fund contributions.

The statement continues:

The suit states that the five recording companies failed to make pension fund payments from foreign audio stream revenue and foreign and domestic ringback revenue.

For over 75 years, the major recording companies have had contracts with the American Federation of Musicians of the United States and Canada (AFM) requiring the companies to share a portion of sales revenue with musicians. Most of the revenue was originally from record sales and later CD sales. In 1994 AFM and the recording companies entered into an agreement, subsequently renewed, requiring the companies to pay 0.5% of all receipts from digital transmissions including audio streaming, non-permanent downloads and ringbacks.

“The record companies should stop playing games about their streaming revenue and pay musicians and their pension fund every dime that is owed,” said Ray Hair, AFM International President. “Fairness and transparency are severely lacking in this business. We are changing that.”

Last year independent auditors discovered that the recording companies had not made the required revenue payments from foreign audio streams, ringbacks, and foreign non-permanent downloads. Attempts to reconcile the issues outside of court have been ongoing for several months to no avail. Suit was filed today in New York.

This is the fifth lawsuit filed against major media corporations for contract violations in the past few months. Under Hair’s leadership, AFM has begun aggressively enforcing existing contracts and standing up to large corporations that fail to pay musicians when their work is reused or offshored.

The suit seeks payment for all missing revenue owed the AFM Pension Fund, late payment penalties, interest, damages and legal costs. Read the complaint here.