K-pop boy band EXO’s Baekhyun, Xiumin and Chen have refuted their agency’s claims that external forces have tried to convince them to leave the company and sign new contracts.
The three, who also belong to the subunit EXO-CBX, have notified SM Entertainment that they are terminating their exclusive contracts due to so-called unfair long-term or “slave contracts” and failure of the company to provide documents over their income despite repeated requests.
EXO's Chen, Baekhyun and Xiumin (Twitter)
In a second statement released on June 2, Baekyun, Xiumin and Chen, through their lawyer Lee Jae-hak of the Lin law firm, refuted the claims by SM Entertainment.
“SM's assertion of intervention by external forces is nothing more than false information to evade the essence of the legitimate exercise of rights by artists and furthermore to mislead public opinion,” according to the lawyer.
He added, “The artists feel miserable after coming across SM’s official statement mentioning a third external force. They feel even more miserable as they feel like SM’s perspective on artists.”
“Our artists are definitely adults who can think for themselves and take responsibility for their own decisions. Furthermore, SM claims that the artists have signed or attempted to sign double contracts, but Baekhyun, Chen, and Xiumin have not signed or attempted any other exclusive contracts other than the existing contracts with SM. SM should refrain from making false claims,” the lawyer said.
In its response to the termination of contracts, SM said the artist can only view the settlement or payment data but it cannot provide them.
“SM said that it would only allow 'viewing' without 'providing' because there is a concern that settlement data may also be provided to external forces. However, even if artists receive settlement data and receive advice from their legal representative as well as from an accountant or anyone else, it is a legitimate exercise of their rights,” the lawyer said.
He said, “Even in the exclusive contract, there is no provision that the artist must not show the material provided to the artist to others, and therefore must review it alone. Rather, there is only a clause in the contract that requires the artists to review material received from SM for 30 days and raise objections if necessary.”
“What we would like to say again is that the artists and their legal representatives have consistently requested the provision of settlement data, but SM ultimately refused and they ended up canceling the exclusive contract, which is the nature and substance of the case,” he added.
According to the lawyer, “In the exclusive contract, the settlement data is ‘provided,’ so it cannot be considered that the duty has been fulfilled by ‘viewing.’ The main premise of SM's claim is that SM's duty is to be fulfilled by giving the opportunity to 'view' the settlement data. However, in the exclusive contract, it is stipulated that settlement data is 'provided.’ Therefore, 'viewing', which is simply an act of showing, cannot be regarded as fulfilling the duty.”
“There is a big difference between allowing materials to be 'provided' and 'viewing' only in terms of protecting artists' right to know and property rights. In particular, settlement data is data under SM's control, so I would like to ask how it is possible to verify whether the details are correct or not by simply asking them to come and see them. And Article 14, Paragraph 5 of the exclusive contract grants a review period of 30 days from the date of receipt of the material, and the artist is required to sufficiently review the material during this 30-day period and raise any objection if there is any objection,” he said.
He said, “Fundamentally, refusing to provide data while citing infringement of trade secrets regarding requests for data on the achievements of the artists themselves cannot justify violating the exclusive contract.”
“To repeat the precedent, an exclusive contract is based on a high degree of trust, and if the agency does not fulfill its obligation to provide settlement data, the celebrity can review the settlement of profits and raise objections to the agency. Failure to provide settlement data is a reason for terminating the exclusive contract as the right will not be properly guaranteed,” he explained.
Regarding the “slave contracts,” the lawyer said the three “artists have previously signed exclusive contracts with SM for over 12 to 13 years. This is very different from the standard exclusive contract for pop culture artists (singer-centered) notified by the Fair Trade Commission based on a contract period of seven years, and is unilaterally disadvantageous to artists by exceeding the minimum reasonable level.”
“And SM is trying to claim a contract period of at least 17 or 18 years, respectively, by having the artists sign the subsequent exclusive contracts again, as the 12 to 13 year contract period is not enough,” he added.
He said, “Article 5, Paragraph 1 of the follow-up exclusive contract states, 'This contract... for 5 years from.’ However, if the minimum number of albums stipulated in Article 4, Paragraph 4 is not released within the same period, the contract period will be automatically extended until the fulfillment of this. There is no upper limit on how long it will be automatically extended.”
“In this way, the provision that the contract period is automatically extended until the number of released albums is filled, and without an upper limit, is clearly a slave contract, and the legal representative is pointing out that this falls under 'acts of trading with the other party by unfairly using the trading position' and the artists are also in agreement,” he said.
“Baekhyun, Xiumin, and Chen are seriously considering filing a complaint with the Fair Trade Commission regarding such long-term exclusive contracts and unfair follow-up contracts,” he said.
About EXO’s activities, he said, “Our artists are looking for ways to faithfully continue EXO activities together with other EXO members even if their exclusive contract with SM is terminated. Even if Baekhyun, Xiumin and Chen leave SM, the artists’ side has preemptively proposed a negotiation plan to be together for EXO activities.”