A complaint filed last week in California state court presents interesting questions regarding the potential liability that an advertiser could face if it fails to make timely SAG pension and health contributions on behalf of an actor. (The below facts come from the complaint. Because the defendant has not yet answered, we haven't heard its side of the story.)
James Norley is an actor and SAG-AFTRA member. In 2013, he was hired to appear as a principal performer (along with Chris Pine) in a commercial for an Armani fragrance. (The commercial is titled ""Revolving Door," and it is worth a watch.) According to the complaint, Norley was paid SAG wages for the session day but never received the holding fees or substantial usage fees to which he was entitled when the spot was broadcast nationwide.
In 2014, a biopsy conducted on a growth under Norley's tongue tested positive for squamous cell carcinoma. Norley alleges that because the defendant didn't properly pay his holding and usage fees, or the pension and health contributions with respect to those fees, he didn't qualify for health insurance benefits from the union. This left him uninsured. As a result, Norley contends that he was "forced to compromise some of the recommended radiation therapy and pay for many of his medical expenses with the little cash that he had."
(The complaint includes other allegations that are not relevant for this post.)
Typically, when SAG pension and health contributions are not made in a timely manner, the penalty is (1) to make the contributions, and (2) to pay liquidated damages as a percentage of the contributions, specifically 10% if the payment was more than 30 days late, increasing to 20% if the payment was more than 60 days late. Of course, those liquidated damages go to the SAG Pension Plans, not the actor. Here, the plaintiff is attempting to recover, apparently based on breach of contract and fraud, the direct damages he suffered, including the costs of his medical bills and damages for emotional distress.
We will keep an eye on this one and update you as the case develops further.