Rewriting the Contract: AI and the Future of Hollywood Labor Law
Written by Victoria Gonzalez Esquivel | March 26, 2026
Negotiations between the actors’ union, SAG-AFTRA, and major film and television studios, represented by the Alliance of Motion Picture and Television Producers (AMPTP), have become a focal point of entertainment labor law this spring as the parties attempt to renegotiate their collective bargaining agreement that represents performers in film, television, and streaming productions. The negotiations, which began in February 2026, have been delayed after negotiators failed to reach a consensus on several key issues, including protections for artificial intelligence and streaming compensation. The parties agreed to pause formal negotiations and resume later in the spring before the current contract expires, signaling that significant disagreements remain but that both sides remain engaged in ongoing bargaining (Maddaus, 2026). The delay reflects a broader transformation occurring in the entertainment industry, where rapid technological change and evolving distribution models have complicated traditional labor agreements.
The current bargaining cycle is occurring only a few years after the historic 2023 strike by SAG-AFTRA, which lasted 118 days and shut down large segments of Hollywood production. That strike centered on issues such as minimum compensation, streaming residuals, and protections against the unauthorized use of artificial intelligence to replicate performers’ likenesses. The agreement that ultimately ended the strike included provisions requiring studios to obtain consent before creating digital replicas of actors and provided additional payments for certain streaming projects (William Fry, 2024). However, commentators have noted that the 2023 contract left unresolved questions about the long-term role of artificial intelligence in entertainment production and the adequacy of streaming-based compensation models (William Fry, 2024). As a result, the 2026 negotiations are widely viewed as an opportunity for the union to strengthen protections that were only partially addressed in the prior agreement.
One of the most significant issues contributing to the delay in negotiations involves the use of artificial intelligence to generate digital replicas of performers. Advances in generative AI technology have made it increasingly feasible for studios to recreate actors’ voices, faces, or entire performances using machine-learning systems. While studios argue that such technologies can reduce production costs and enable creative experimentation, actors’ unions have continued to contend that unregulated AI could allow studios to replace human performers entirely (Salkowitz, 2025). As a result, the union has proposed additional safeguards, including stronger consent requirements and compensation mechanisms when AI-generated performances are used in place of human actors. Some proposals discussed within industry commentary include fees imposed on productions that substitute AI performers for human ones, a concept sometimes informally referred to as a “Tilly Tax,” intended to ensure performers share in the economic value generated by their digital likenesses (No Film School, 2026).
These proposals raise legal concerns that overlap with the “right of publicity” doctrine, which safeguards individuals against the unauthorized commercial use of their identities. One of the earliest cases recognizing this doctrine was Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc, 202 F.2d 866 (2d Cir. 1953), in which a federal appellate court held that individuals possess a transferable property interest in the commercial use of their likeness. Importantly, the court framed this interest not merely as a privacy right but as a form of intellectual property, allowing talent to exclusively license their images for commercial gain. This conceptual shift laid the groundwork for treating identity as something with independent economic value. Later decisions expanded this principle to cover voice imitation and other forms of identity appropriation. For example, in Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988), a federal court held that a commercial that deliberately imitated singer Bette Midler’s voice without her permission could violate her publicity rights. The court emphasized that a distinctive voice can function as a personal identifier just as much as a face or name, and that intentional imitation designed to portray a specific individual is actionable even if the person’s name or image is never used. This reasoning significantly broadened the doctrine by recognizing that non-visual attributes can be protected as a part of one's identity. Similarly, the Ninth Circuit in White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992) concluded that an advertisement featuring a robot resembling television personality Vanna White unlawfully appropriated her identity. The court’s analysis focused on the overall “evocation” of White’s persona, such as her role, setting, and distinctive appearance, rather than literal likeness. This case is particularly significant because it demonstrates that liability can arise from symbolic or suggestive references that trigger public recognition. However, dissenting opinions warned that such a broad standard risks overextending publicity rights and encroaching on free expression.
These precedents suggest that even indirect imitation can create liability when it evokes a recognizable performer’s persona, a principle that may become increasingly relevant as artificial intelligence systems generate synthetic performances that closely resemble real actors (Texas Law Review, 2023). As a result, courts confronting AI-generated performances may need to refine the boundary between lawful inspiration and unlawful appropriation, particularly where transformative use or First Amendment defenses are implicated.
At the same time, emerging litigation involving generative artificial intelligence is complicating the legal environment surrounding these negotiations. Courts have recently begun addressing whether the training of AI models on copyrighted materials constitutes fair use under federal copyright law. In cases such as Kadrey et al. v. Meta Platforms, Inc., No. 3:2023-cv-03417 and Bartz et al. v. Anthropic PBC, No. 3:2024-cv-05417, courts have examined whether using large datasets of copyrighted works to train AI systems can be considered transformative. Some judicial opinions have suggested that training practices may qualify as fair use when they create new outputs rather than directly reproducing the original works, although courts have emphasized the need to analyze market harm and unauthorized data acquisition. While these cases primarily concern copyright law rather than publicity rights, they illustrate how courts are beginning to define the legal boundaries of generative AI technology, developments that could indirectly shape the bargaining positions of both unions and studios (Reuters Legal Industry, 2026).
Another central issue in the negotiations involves residual payments associated with streaming platforms. Historically, actors received residuals when television programs were rebroadcast, syndicated, or released in secondary markets such as home video. However, subscription-based streaming services have disrupted this model by distributing content globally through proprietary platforms that often provide limited transparency about viewership data. Actors’ unions argue that this lack of transparency makes it difficult to ensure that performers receive compensation proportional to a program's success (Rizzo and Whitten, 2023). As a result, the union has proposed revised residual formulas tied more closely to streaming performance metrics and revenue generated by digital distribution. Studios have resisted significant changes, arguing that streaming services operate within a highly competitive environment and face rising production costs as well as fluctuating subscriber growth (FilmTake, 2025).
Legislative developments are also influencing the context in which these negotiations are occurring. Several states have recently enacted laws addressing digital replicas and AI-generated likenesses, reflecting growing concern about the potential misuse of synthetic media. For example, lawmakers in New York adopted legislation defining a digital replica as a realistic digital simulation of an individual’s voice or likeness (Littler Mendelson 2024), while California has expanded statutory publicity protections governing the digital recreation of deceased performers (ITIF, 2024). Legal scholars have argued that these state-level initiatives signal a growing recognition that traditional intellectual property frameworks may be insufficient to address emerging forms of exploitation of digital identity (Littler Mendelson, 2024; ITIF, 2024).
Overall, industry observers note that delays in Hollywood labor negotiations are common, particularly when new technological issues emerge that require complex regulatory frameworks. Nevertheless, the outcome of the negotiations could have far-reaching implications not only for performers but also for writers, directors, and other creative professionals whose work may be affected by artificial intelligence and streaming distribution models. The evolving dispute highlights the increasingly intertwined relationship between labor law, intellectual property law, and technology regulation in the modern entertainment industry. As collective bargaining resumes later this spring, the resulting agreement may serve as a critical precedent for how creative labor and digital identity rights are protected in an era defined by rapid technological change.
Resources
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