The first plea hearing for the case of former EXO member Tao versus SM Entertainment regarding the validity of Tao’s exclusive contract was held on October 23.
Both sides of the hearing were given the opportunity to plead their cases before the Seoul Central District Court in terms of the contract’s length, distribution of profit, and possible discrimination against Tao, among other factors.
Tao’s lawyer argued, “The contract can be nullified in the event that the trust of the relationship outlined in the exclusive contract is broken by those who the power was delegated to. Furthermore, insisting on holding on to singers by means of long-term contracts infringes on their individual characters and excessively limits their freedoms.”
The lawyer further argued that having a contract length of ten years from the point of debut is excessively long. They stated, “The average contract length set forth by the Korea Fair Trade Commission is seven years and in the case of foreigners, can be extended by three years (at that time). However, SM has abused that clause and made it a 10 year contract from the very beginning.” They added, “It’s also a violation of the guidelines set forth by the FTC by calculating the contract period from the point of debut, rather than from the time the artist enters the company.”
On the other hand, SM argued that the contract was in full compliance with the FTC and stuck by their argument that there is nothing invalid in the contract. Their argument stated that in comparing the massive investment required by the entertainment industry with the uncertainty of whether the artist can or will succeed, 10 years isn’t really that long of a period.
A lawyer for SM stated, “Before management became industrialized, the conditions for signing an exclusive contract were completely incoherent. After the Korean wave took off in 2009 and management became industrialized, 10 years is not a long time considering the amount of effort that goes into preparing the artist before their debut.” They added, “We didn’t misinterpret or abuse the guidelines. We added three years to the contract to aid in an potential overseas management issues.”
Tao’s side also asserted claims that the four Chinese members in EXO were discriminated against. To this, SM’s lawyer replied, “EXO has been a global group from the start. There was no discrimination against any of the members. Since there’s a difference in opinions, if the plaintiff has sufficient evidence with which to prove their case, we request they bring it forward.”
The next hearing is set for December 4.
Meanwhile, Tao left Korea in April after requesting that his contract be nullified. He followed fellow members Kris and Luhan, who left the company for similar reasons and are currently embroiled in their own lawsuits with SM.