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JYP, SM, YG And Other Entertainment Agencies Ordered To Stop Issuing Unfair Contracts

By March 8, 2017 at 7:38 am
Top entertainment agencies found to be treating their trainees unfairly (Photo : Han Myung-Gu/Getty Images)

Top entertainment management agencies including JYP, SM and YG have been ordered to stop issuing unfair contracts to their trainees. The announcement was made by the Fair Trade Commission (FTC) on Tuesday.

The agency said that it has found and corrected six types of unfair clauses after the inspection of the contracts of eight agencies: SM, YG, JYP, LOEN, FNC, Cube, Jellyfish Entertainments and DSP Media. Each company is estimated to have over 12 billion won (about 10 million USD) in assets.

Six agencies were found to have charged trainees 100 million won to 150 million won for canceling the agreement. These, including YG Entertainment, were founded by retired singer Yang Hyun-suk.

It was noted that the penalty for breaching a deal was a whopping double or triple the amount of investment for each trainee. The FTC concluded that the penalty exceeded the expected losses of the agencies from the cancellation.

JYP Entertainment, created by singer-songwriter Park Jin-young, banned trainees from signing on with other agencies even after their agreement with JYP has expired. The agency, along with Cube and DSP, also barred trainees from leaving with threats of fining them double the sum of investments or taking them to court.

Another high-profile entertainment management agency, SM Entertainment, which was established by producer Lee Soo-man, canceled trainees' contracts at random and usually for unclear reasons - typically using morality clauses forbidding specific behavior. The FTC noted that this is unfair for trainees since they cannot win or prove their innocence under said clauses.

Korea's entertainment companies have gained the notorious reputation of providing poor working conditions to their trainees. The FTC added that most young trainees are forced to follow these "slavery contracts" because these agencies play a significant role in their 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 official from FTC said. "We expect the inspection will enhance the rights of trainees and establish a custom of fair agreements."

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