Union and its Benefit Fund at Odds in Financial Mismanagement Suit

A major rift about health benefits due recording artists between the leadership of the Am. Fed’n of Television & Radio Artists (AFTRA) and the trustees of the union’s related Health & Retirement Fund has brought into the public spotlight long running charges of the Fund’s inept and incomplete record-keeping. AFTRA is a subunit of the Associated Actors & Artistes of Am.  The fight pits Greg Hessinger, AFTRA’s nat’l executive director, against its Fund unit, responsible for collecting and distributing benefits to featured recording artists, whether they are AFTRA members or not.

The dispute also threatens to proposed settlement of a nine-year-old lawsuit waged by fifteen artists, alleging breach of fiduciary duty. At stake is not only a payout for the fifteen named plaintiffs in return for dropping the charges, but also the treatment of many thousands of eligible artists not active in the suit. In 1992, the fifteen named plaintiffs sued the Fund for fiduciary irresponsibility for basically botching its mission from 1959 to 1992 due to inept or nonexistent record-keeping and failure to enforce legal obligations requiring record companies to contribute payments to both recouped and unrecouped artists.

The rift comes as lawyers for the Fund and half their trustees, mostly representatives from broadcast networks (AFTRA’s main constituency) rejected Hessinger’s requests May 22 to further modify the proposed settlement. At the meeting, the trustees rejected Hessinger’s call for modification of a blanket release of the settlement and more open-ended, non-prejudicial terms for future claims by the eligible artists. Hessinger had initiated the call for changes after discussions with alarmed artists and activists.

“I told the trustees, ‘You have a choice: Either agree to the changes, or try and get the settlement approved over the objections of this union,’ ” Hessinger tells Billboard. “They rejected them, so AFTRA is going to actively oppose the settlement. So we’re gonna file papers saying we oppose the settlement because it adversely affects class-action participants and infringes on the union’s right as a collective bargaining agent to determine what our own contracts mean.”

Five of the fifteen named plaintiffs artists have rejected the proposed settlement, and another has not yet accepted. The settlement goes before U.S. Dist. Judge Clarence Cooper  (N.D. Ga., Clinton) on June 20 for final approval. There’s also a growing list of artists from the class action who have written to reject the settlement, including Bruce Hornsby, Frankie Laine, Kenny Loggins,  Patti Page, and Dionne Warwick. [Billboard 6/1/02]