JYP, SM And YG Are Reprimanded For Giving Unfair Contracts
Top Korean entertainment management agencies that include JYP, SM and YG have been ordered to stop giving "slave" contracts on upcoming trainees. The report came from the Fair Trade Commission (FTC) which is the country's corporate overseer.
The FTC said that it corrected unjust clauses right after investigating varying contracts from DSP Media, Cube, SM, LOEN, YG, FNC, Jellyfish Entertainment and JYP. Each agency is reported to have around $10 million (12 billion won) in corporate assets according to The Korea Times. YG Entertainment, which was established by retired singer Yang Hyun-suk, charged trainees around 150 million won if they end up canceling contract agreements.
Six other agencies have a similar penalty for breach of contract that will allow the company to extract double or triple the original investment for each trainee. The FTC believes that JYP, SM and YG have penalties that exceed the losses of the management agencies coming from the contract cancellation of the trainee. JYP Entertainment which is founded by singer Park Jin-young, bans trainees from entering into contracts with other agencies even after their original contract from JYP has expired.
Top ranking agencies usually take their trainees to court if they infringe on their original contracts and it will cost them twice the sum of investments. Labels such as JYP, SM and YG have constructed South Korea's pop industry when it emerged in the early nineties. The agencies created a training system that produced top stars for music, movies and TV shows as cited by CNN.
SM Entertainment, which was an agency created by producer Lee Soo-man, has a habit of canceling trainee contracts for doubtful reasons, which uses morality clauses that forbids disruptive behavior. The FTC has said that most trainees are powerless in confirming their innocence under the said clause. Terrible working conditions in South Korea's entertainment corporations have been reported before and most young trainees get trapped under the "slavery contracts" due to the industry's constant pressure.
