Why are Exo members Baekhyun, Chen and Xiumin suing SM Entertainment?

Members of popular K-pop boy band have criticised 'unfair wages' and 'slave contracts'

Exo members Chen, Baekhyun and Xiumin. Photo: OXO

Three members of the popular K-pop boy band Exo have taken their label SM Entertainment to court, claiming there are discrepancies in payments and that they were forced to sign “slave” contracts.

Baekhyun, Chen and Xiumin accuse SM of lacking transparency over payment and demanding unreasonably long contracts that extend past 12 years, while the industry standard is seven years.

“While signing a long-time deal of 12 to 13 years with its artists, SM made its artists sign another exclusive contract for when the initial contract term comes to its end, leading to prolonged terms of at least 17 to 18 years,” lawyer Lee Jae-hak, of South Korean firm Lin, told The Korean Herald.

This isn’t the first time that SM has been involved in legal disputes. Here's what to know about the problematic contractual agreements that continually plague the music industry in South Korea.

What are 'slave' contracts in K-pop?

“Slave” contracts is a term commonly used to describe any unfair and long-term contract between aspiring Korean artists and their management agencies.

To become a K-pop idol, years of training are needed. Some trainees start off as young as 12 or 13 and need to be trained in areas such as singing, dancing and learning how to speak other languages before making their debuts. However, training is not free and trainees can get into debt with their agencies during the process.

This means they need to pay back what is owed, which in turn comes from what they earn as musicians after entering the K-pop world. It can take a while to break even, and some agencies say that is why they have such long contracts in place.

What SM Entertainment says

On Thursday, the agency released an official statement in response to the allegations by the three Exo members.

It said there were external influences and the band was being poached by another company.

“We have discovered that these outside forces are not only luring the artists to breach the valid exclusive contracts they have signed with the company, but using them to get through to other artists to also violate the contract terms or sign double-contracts,” SM said.

“We will take legal action against these people who pursue only their greed and profit without any profound interest in the future or the rights of the artists.”

What has happened in the past with such agreements?

This isn’t the first time that artists under SM have sued to be released from their contracts. In 2009, three of the five original members of the boy band TVXQ! asked the courts in South Korea to examine their 13-year contract.

Members Jaejoong, Yoochun and Junsu argued the deal was not only too long and restrictive, but also left them with almost no profits despite their success.

A South Korean court ruled in their favour and an injunction suspended their SM contracts.

In the meantime, Jaejoong, Yoochun and Junsu formed their own group called JYJ in 2010. They were eventually able to terminate their SM contracts after a deal was reached in 2012.

Former Exo members Kris Wu and Luhan filed lawsuits in 2014, claiming their contracts were unfair.

The pair were forced to settle in 2016, which allowed them to no longer be members of the group to pursuit solo activities, although their contracts with SM remained intact until 2022.

Tao, also a former member of Exo, similarly filed his own lawsuit in 2015, claiming the company had mistreated him, in addition to treating Chinese members of the group differently from the Korean ones.

During his legal battle, he was counter-sued by SM and lost when it was found that he did not pay back an amount owed to the agency within the promised timeline. Like Wu and Luhan, Tao also eventually reached a deal that allowed him to leave Exo, although his contract with SM also remained valid until 2022.

What has been done to protect musicians?

In 2010, South Korea’s Fair Trade Commission issued a rule that limited entertainment contracts to seven years. However, in 2017, more restrictions were added such as reducing the financial penalty for trainees who wanted to break their contracts or leave the industry, as well as making it more difficult for companies to force K-pop stars to renew their contracts especially long-term ones.

Is Exo breaking up?

Exo is one of South Korea's biggest K-pop bands and often viewed as a rival to BTS.

The band's song Power was one of the first from a K-pop group to be played at the Dubai Fountain

The group has won five consecutive Album of the Year awards at the Mnet Asian Music Awards and two consecutive Artist of the Year awards at the Melon Music Awards.

Mandatory military service and contractual disagreements have slowed down their comeback, which was supposed to take place this year. However, it seems Baekhyun, Chen and Xiumin still want to work it out.

“We are looking for ways for the artists to remain in Exo despite terminating their contracts,” said the group's laywer Lee.

“Even before terminating their contract, during negotiations with SM, the idols had offered a partnership that would allow them to take part in Exo activities.

“Apart from the legal dispute with SM Entertainment, the artists are immensely grateful for the love fans have given them. In the future, no matter how the legal dispute is resolved, the artists will carry out Exo activities faithfully.”