Musicians’ Union Sues Major Labels Over Missed Pension Payments

The world’s largest organization protecting musicians’ interests Monday filed a lawsuit against five major recording labels over alleged failures to make payments to a pension fund. Filed by the American Federation of Musicians, the suit accuses Atlantic, Sony, Universal, Warner Bros. And Hollywood Records of failing to make pension payments for revenue earned on foreign streaming and ringback sales, as is required by a standing agreement. Initially signed in 1994, the agreement requires the labels to contribute to a pension fund in the amount of 0.5 percent of revenues from ringbacks, audio streaming and non-permanent downloads.

“The record companies should stop playing games about their streaming revenue and pay musicians and their pension fund every dime that is owed,” noted AFM president Ray Hair. “Fairness and transparency are severely lacking in this business. We are changing that.” Hair also said that AFM personnel has been in negotiations to resolve the matter with the labels for months, but an a settlement could not be reached, prompting this week’s legal action. In addition to the missed payments to the AFM Pension Fund, the suit also seeks additional cash for late payment penalties, interest and legal costs. The AFM has been fairly active in recent months, as Monday’s suit marks the union’s fifth lawsuit against media giants this year.