[SUMMARIZE] Fair Trade Commission Republic of Korea ordered SM to correct its unfair contracts between its artists and trainees on December 23, 2010.
TVXQ fans’ (organized by DNBN) in Korea filed a complaint with Fair Trade Commission Republic of Korea(KFTC) against SM taking unfair contracts with TVXQ on September 9, 2010. They pointed out that SM’s contracts violate Article 23 (Control of Unfair Trading Practices), clause 4 of Fair Trade Law.
They also pointed out that many conditions (e.g., the term of contract, distribution of profits, penalty and unilaterally decided schedules to fulfill and etc.) in the contracts were made exclusively to SM’s advantage.
Below are summaries of some clauses from the contract between SM and TVXQ.
1. Long-term exclusive contract
The contract between TVXQ and SM Entertainment specifies that the exclusive contract lasts 13 years EXCLUDING military service and suspension of their activities. This means that TVXQ cannot revise their contract under changed circumstances leaving them no choice but to carry out the unfair contract to the end. This can be considered a life-long contract for an idol group in the entertainment business.
2. Excessive penalty provision – for a breach of contract
According to the contract, TVXQ were forced to pay 3 times the invested amount of money. Also they were forced to pay penalty even if the contract was cancelled by bilateral agreement. Cancellation of contract is realistically impossible because the penalty exceeds 100 billion KRW. (approx. 90 million USD) This clause is unacceptable under any circumstances, and anti-social as well, advantageous only to the employer. There was no choice but to fulfill the contract because the contract blocked every possible ways to cancel or terminate it.
3. Unilaterally decided schedules of activities
TVXQ released 45 albums, travelled the Earth 60 times and held 103 concerts in 68 months since their debut. These were extremely tight schedules, but they were allowed to have less than 2 weeks holiday off per year.
The fans called for KFTC to judge whether this contract is a ‘slave contract’ or not, according to the above unfair clauses of the contract. As a result, KFTC finally ordered SM to correct its contracts between its artists and trainees on December 23, 2010. Under this official order from a government institution, all artists (including TVXQ’s Yunho and Changmin, Super Junior, BoA, Girl’s Generation and more) at SM have signed a fairer, revised contract.
This decision is expected to be an advantage in the court for JYJ who is in a ligal dispute over the unrevised version of the exclusive contract.
Below is the official press release from KFTC and its English translation for international fans.
Original Link (in Korean), English Translation: