SM, YG, JYP busted for unfair contracts

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Sat, May 26, 2018 | 03:54

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SM, YG, JYP busted for unfair contracts

Posted : 2017-03-07 16:53

Updated : 2017-03-08 11:32

By Park Jae-hyuk

Lee Soo-man

Yang Hyun-suk

Park Jin-young

SM, YG, JYP and five other top entertainment management agencies here have been ordered to stop forcing unfair contracts on their trainees, according to the Fair Trade Commission (FTC), Tuesday.

The nation's corporate watchdog said it corrected six types of unfair clauses, after inspecting contracts of the eight agencies ― SM, YG, JYP, LOEN, FNC, Cube, Jellyfish Entertainments and DSP Media ― each of which has more than 12 billion won ($10 million) in assets.

Six agencies including YG Entertainment, which was founded by retired singer Yang Hyun-suk, charged trainees 100 million won to 150 million won when they canceled agreements.

The penalty for breaching a deal was double to triple the sum of investment in each trainee. The FTC considered the penalty to exceed the expected losses of the agencies from the trainee's cancellation.

JYP Entertainment, which was established by singer-songwriter Park Jin-young, banned trainees from signing contracts with other agencies, even after their agreements with JYP expired. Along with Cube and DSP, the agency also prevents trainees from leaving, either fining them double the sum of investments or taking them to court.

SM Entertainment, which was launched by producer Lee Soo-man, arbitrarily canceled contracts with trainees for dubious reasons, using morality clauses forbidding certain behavior. The FTC pointed out that trainees are almost always incapable of proving their innocence under such clauses.

The poor working conditions of trainees at Korea's entertainment companies are nothing new. The FTC said most young trainees have no choice but to follow the so-called "slavery contracts," because agencies exert great influence over their debut and success.

"We began to inspect the unfair contracts last December, as more teenagers hope to become entertainers amid the growing popularity of TV audition shows," an FTC official said. "We expect the inspection will enhance the rights of trainees and establish a custom of fair agreements."

According to the FTC, all eight agencies vowed to correct the unfair clauses in their contracts with trainees. The FTC said it will continue to monitor the agencies to check whether or not they keep their promises.

jaehyuk@ktimes.com