South Korea passes new regulations against unfair trainee contracts

The Fair Trade Commission has ordered multiple entertainment agencies to make amendments to trainee contracts, citing unfair terms and conditions.

On March 7, The Fair Trade Commission ordered eight entertainment agencies to rectify a total of six unfair clauses in their trainee contracts. Some of the reasons given were:

  • Enforcing excessive penalties
  • Pressuring trainees to sign exclusively with the agency
  • Unfair contract termination clauses
  • Violating their rights guaranteed by law

The 8 agencies include YG Entertainment, JYP Entertainment, SM Entertainment, FNC, Cube, Jellyfish, DSP Media, and LOEN Entertainment.

Of these agencies, JYP Entertainment, Cube Entertainment, and DSP Media had clauses in their contract that pressured trainees into signing with them exclusively.

These contracts have now been rectified to allow for their trainees to continue seeking other contracts or to sign exclusively with the agency only after a mutual agreement has been reached.

LOEN Entertainment, JYP Entertainment, YG Entertainment, Cube Entertainment, and DSP Media also had clauses in their contracts allowing them to terminate contracts with no grace period. They simply had to give a written notification that the contract would be terminated. These agencies are now required to give their trainees a grace period.

SM Entertainment, FNC Entertainment, and DSP Media also had clauses that allowed the agency to terminate contracts without a specific reason. This clause has now been deemed to violate regulations. In the past, agencies could state vague reasons to terminate the contract.

Trainees can now indefinitely fight their agencies in court whenever an issue regarding their contracts arises due to this new ruling.

“With the rectification of these unfair trainee contract clauses, we believe the rights and interests of trainees will be fortified. We believe a more just contract culture will be founded within the entertainment industry between trainee and agency.”

– Fair Trade Commission Staff

Source: E Today