Attorney Lee Jae Hak of Law Firm Lin, who is representing EXO members Baekhyun, Xiumin, and Chen (hereinafter referred to as the "artists"), announced, "On the 4th, we filed a complaint against SM Entertainment (hereinafter referred to as "SM") for unfair abuse of bargaining power with the Korea Fair Trade Commission (hereinafter referred to as "KFTC"). KFTC has already issued two corrective orders to rectify such unfair contractual behaviors in October 2007 and January 2011 against SM. We reported that SM has been engaging in unfair contractual behavior and disregarded these orders."
"We requested an investigation into SM's violations and immediate corrective measures to rectify them, as well as a full investigation into the exclusive contracts of all SM artists." "SM is repeating the abuse of power in 2023 that the KFTC ruled against them in 2007 and 2011."
The representative continued, "SM has already been held to be unfair for the clauses that set the start date of the contract as the debut date, and the contract period that is excessively unfavorable compared to that of the others in the industry. It has also been held that SM should not extend the contract period of the trainees for reasons such as international expansion to disadvantage the trainees again."
The representative claims the end date of the artists' exclusive contracts was also problematic. In 2007, the KFTC prohibited the practice of excessively prolonging the contractual period such as setting the end date to be the fifth year following the release of the first album or the fifth year following the appearance in a role at the supporting level or above. However, despite receiving the KFTC's corrective order in 2007, SM presented the exact unfair clauses in the exclusive contracts of Baekhyun, Xiumin, and Chen in 2010 and 2011, claims the representative.
"Because the term of the contract starts running from the date of the debut, their trainee period was added to the term of their agency contract, which was further extended by three years in an addendum agreement. Adding the period of military service results in an agency relationship of more than 12 or 13 years."
"SM had the artists sign subsequent exclusive contracts, each claiming a minimum term of 17 or 18 years. SM is tying them up to the contract again a year before the end of the contract," claimed the representative.
The representative concluded, "We hope that our efforts and courage will contribute to the protection of the rights and interests of our juniors and to the fair and healthy development of the industry."