SM Entertainment To Make Changes To Trainee Contracts After FTC Investigation

Recently the Korea Fair Trade Commission (KFTC) investigated eight entertainment companies, including SM Entertainment, and made modifications to certain unfair contract clauses.

On March 7, a press release from SM Entertainment announced that they would take corrective action on one item as a result of the investigation.

The item in question is about Article 6.3 of the “Standard Exclusive Contract for the Protection of Public Performing Artists,” which states that the signee must not do anything during the course of their entertainment activities that damages their dignity as a performing artist or the credibility of the company and other artists in the company.

One of the clauses for which SM Entertainment was mentioned in the FTC report was “canceling contracts for ambiguous reasons,” under which Article 6.3 would be categorized.

SM stated, “This clause from the standard contract is also included in our contracts with the trainees. It has been brought to our attention that this may be unfair on the trainees, and since the FTC is planning to revise the standard contract in any case, we have decided to remove the clause entirely.”

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