A glimpse on SM Entertainment’s “Unfair Contract”

According to xgoody2shoes15x at Soompi, this article was posted at DNBN (most probably another clarification by Korean Cassies) this morning. It’s a rundown of why JaeChunSu decided to ask for the revision of their contracts and how unfair and “oppressing” SM’s contracts are.

*Note: The ones in RED are important points I wanted to emphasize.

DBSK – SM Unfair Contract

On 07/31/09, Friday night, Dbsk’s three members — Jaejoong, Yoochun, and Junsu — filed a lawsuit against SM regarding their unfair contracts. Dbsk’s company, SM Entertainment, is currently stating that the cause of all this was the cosmetic business in order avoid the true reason. For this, DBSK fans believe that the cause of this situation was the unfair contract that DBSK and SM signed and have included the problems within the contract.

A 13 year contract?

As Jaechunsu filed the lawsuit, the contents of the contract between DBSK and SM Entertainment have been released into the public. According to the articles, the term for the contract signed by DBSK is 13 years excluding the years they would be in service in the army, and if a DBSK member goes into army service while his contract with SM is still valid, DBSK (who debuted on 12/26/03)’s contract will end around 2018-2019. This is much longer than the current law stating the maximum term to be 7 years, and this is an extremely long contract for which the term “slavery contract” seems appropriate.

They don’t know their own revenue?

As the three members of DBSK filed a lawsuit on 07/31, they requested a preservation of evidence on 08/01. What they requested here is “The requester’s revenue regarding his activities as an entertainer, including the accounting records, contract, receipt, bills, etc. that could be used to calculate the expenditure” and the reason they have requested this preservation of evidence is, as stated by the three members’ lawyer, Im SangHyuk, that “The members have never received the accurate revenue numbers from the company” and that “Usually when there is a dispute over contracts a compensation for damages is requested, but because the members have not been able to check their revenue, we have requested this.” There are rumors floating around saying that the revenue sharing between SM Entertainment and DBSK is 7:3, 9:1, etc. However, these don’t mean anything in this situation where the DBSK members themselves don’t know for sure either. This means that SM may have said it was 7:3 while disregarding that “3”.

SM Entertainment’s Unfair Contract

SM Entertainment has been sued several times before regarding their contracts, and they have been ordered by the court to readjust their ways.

Of those cases, I will use one of the clauses regarding their contracts with artists that have been prosecuted by the court that have been included in LeeDaily (??) on 11/20/08.

– Of this Agreement, the precursor of all the rights associated with domestic and international entertainment activities and all ownership, copyright, authority, trademark, etc. of the products are entrusted to the company even after the expiration of the term of this Agreement, and the signer of this contract cannot argue about their rights as an individual.

This means that copyright of the many songs sung by the DBSK members and even the songs that the members have composed themselves goes to SM Entertainment. In other words, the copyright of the songs composed by the members included in their Korean albums as well as the composed songs that they released during their concerts is possessed by SM Entertainment and this will remain so even after the contract ends.

The agreement above includes not only the products as a singer but also the products made in the name of DBSK.

In addition, the posession of the songs composed by the singer himself held by the company is a part of the unfair contract.

An article released on the same day by Newsis stated that there also was a rule that gave the company the power to forcefully order all of the artist’s activities.

In other words, the company can force the members into their schedule no matter how tired or sick they are. Additionally, the company can forcefully stop the members from doing what they wish to do.

Also, according to Asia Today’s article from 06/09/09, SM Entertainment is criticized as the entertainment company with the most unfair contracts. When you read through this article, you can see that the clause that had been ordered to be readjusted by the court is mentioned again. For this, it is unable not to doubt that the parts of the unfair contract that have been ordered by the court to be readjusted have indeed been fixed.

We wish that the unfair contract between DBSK-SM will be fixed as soon as possible.

As stated before, in the core of this situation lies the unfair contract between DBSK and SM Entertainment. The lawyer of the three members have attempted to communicate from various angles with SM Entertainment including interviews, but because of repeated failures to do so, they had to come so far as appealing to the law.

From: Finger Chyo, DNBN

I’m not a law student and I also understand that different laws govern different countries but being a business management student who also took up courses regarding laws on obligations and contracts, I must say that there is really no other way of calling these contracts of SM other than “slave contracts”. Even an ordinary person can conclude that these contracts are unfair and are against the law. The 13 year contract is already too much but the clause where the company would “own” whatever albums, products, etc. the artists have done – yes, even their own works and compositions – even after the expiration of the contact and that “they cannot argue about their rights as an individual” is just over-the-top. What RESPONSIBLE and DECENT company does that to their artists? I never liked SM Entertainment because of the rumors I’ve heard before of how they treat their artists. But if the above-stated are true, I despise them even more. As a business student, we were taught that profits is not the only thing important in doing business. It’s also important to take good care of the people who work for you because without them, you can’t be successful. What SM is doing is really going overboard and is UNJUST. It’s oppressive and it violates the rights of the artists who are under the label.

I’m really glad that JaeChunSu took action to stop this unfair treatment from SM. I applaud them for being brave enough to ask for a change – A DRASTIC CHANGE. What they did might have caused a lot of stir in the entertainment industry but they did the right thing. Someone had to take that step to make a change for the better and I’m proud of the three boys for doing so. It hurts me how people, even the so-called “fans”, say that JaeChunSu might have done this out of greed for money but I know in my heart that they were just fighting for what they believe is right. I’ve only been a fan of DBSK for a short time but I know that they are not the kind of people who care so much about money. I know that the three of them are aware that this step they took will not only change their situation but also the situation of the other artists under SM. Although it’s painful and disappointing to hear people say bad things about JaeChunSu because of what they did, I believe in what they’re fighting for and I will support them all the way.

Just like before, I will ALWAYS KEEP THE FAITH.