April 20, 2024
Industrials
FTC clamps down on unfair treatment of trainees
[THE INVESTOR] South Korean entertainment firms’ contracts will be made fairer for trainees, the Fair Trade Commission said on March 7.
The antitrust agency said that a number of local agencies were found to have imposed unfair conditions on their talents, and that those deemed in violation of fair trade practices will be modified.
The FTC looked at eight agencies -- SM Entertainment, Loen Entertainment, JYP Entertainment, YG Entertainment, Cube Entertainment, Jellyfish Entertainment, DSP Media -- and found the majority had one or more unfair clauses in their contracts.
The FTC found that six of reviewed companies included clauses demanding unfair compensation when contracts were terminated by trainees. The companies, including YG Entertainment, had clauses demanding compensation of up to three times the company’s investment under such conditions.
The compensation will now be reduced to about a third of current levels, and clauses limiting the activities of trainees after the termination of contracts will also be changed.
The FTC found that some companies including JYP Entertainment imposed unfair conditions on individuals who completed the training.
According to the FTC, a number of companies required trainees to sign exclusive contracts after the training period. Compensation of double the training costs were being demanded from those refusing to do so. The FTC also found that some companies’ contracts included clauses preventing trainees from signing on with another agency for three years after the termination of contract.
By Choi He-suk (cheesuk@heraldcorp.com)
The antitrust agency said that a number of local agencies were found to have imposed unfair conditions on their talents, and that those deemed in violation of fair trade practices will be modified.
The FTC looked at eight agencies -- SM Entertainment, Loen Entertainment, JYP Entertainment, YG Entertainment, Cube Entertainment, Jellyfish Entertainment, DSP Media -- and found the majority had one or more unfair clauses in their contracts.
The FTC found that six of reviewed companies included clauses demanding unfair compensation when contracts were terminated by trainees. The companies, including YG Entertainment, had clauses demanding compensation of up to three times the company’s investment under such conditions.
The compensation will now be reduced to about a third of current levels, and clauses limiting the activities of trainees after the termination of contracts will also be changed.
The FTC found that some companies including JYP Entertainment imposed unfair conditions on individuals who completed the training.
According to the FTC, a number of companies required trainees to sign exclusive contracts after the training period. Compensation of double the training costs were being demanded from those refusing to do so. The FTC also found that some companies’ contracts included clauses preventing trainees from signing on with another agency for three years after the termination of contract.
By Choi He-suk (cheesuk@heraldcorp.com)
