With just hours left before the current agreement between the two groups expires, the Writers Guild of America has rejected the latest offer from the Association of Talent Agents, making a mass exodus of writers from major agencies likely.

In a blunt letter to members on Friday, the guild’s negotiating committee called ATA’s offer to share packaging fees with guild members “unacceptable,” and said it only continued “a major conflict of interest.” The letter warned that at 12:01 a.m. Saturday, when the current deal elapses, a tough new talent agency code of conduct will go into effect. If that happens, guild members are being called upon to fire any agent or agency who refuses to sign on to the code.

“We know that, together, we are about to enter uncharted waters. Life that deviates from the current system might be various degrees of disorienting. But it has become clear that a big change is necessary,” the WGA told members. “We will not only stand together, we will stand up for each other, lean on each other. We can do this.”

Also Read: Talent Agents Offer to Share Packaging Fees With Writers

“The WGA leadership today declared a pathway for compromise doesn’t exist,” ATA Executive Director Karen Stuart said in a response to the guild’s decision. “Agencies have been committed to reaching an agreement with the WGA but, despite our best efforts, today’s outcome was driven by the Guild’s predetermined course for chaos. The WGA is mandating a ‘Code of Conduct’ that will hurt all artists, delivering an especially painful blow to mid-level and emerging writers, while dictating how agencies of all sizes should function.

“We came to the negotiating table in good faith and put forth comprehensive proposals providing choice, disclosure, transparency, shared revenue and a significant investment in inclusion programs,” she continued. “Unfortunately, not to our surprise, the WGA did not accept our offer, did not provide counterproposals and refused to negotiate further. We’re prepared to continue to fight for the best interests of writers and all artists.”

Packaging — in which agents collect fees for bundling talent and bringing them as a package to a studio or network for film or TV projects — has been the primary point of contention between WGA and ATA as they try to hammer out a new agreement. WGA’s position is that packaging creates a conflict of interest for agents, and that it has contributed to a decline in overall earnings for writers. ATA says that packaging fees are essential to the agencies’ current business model, and that writers who participate in packaging earn more.

Also Read: WGA Prepares Members for Possible Life Without Agents, Launches Staffing Submission System

The guild has demanded that talent agencies end the practice outright, and on March 31, WGA members overwhelmingly voted to approve the new code of conduct that will require any agency representing them to do just that. ATA meanwhile has firmly stood by package deals, and the two sides have subsequently been unable to agree on a solution to the dispute.

The ATA’s most recent proposal offered to share a portion of earnings from package deals with writers. But on Friday in a separate letter, WGA West president David Goodman said that offer didn’t address the guild’s problems with the practice.

“You are still receiving money from our employers for access to us, and keeping 99% of the profits of your backend,” Goodman said. “It does not change your incentives at all. It is not a serious proposal and we reject it.”

The guild has devised a plan for writers to be represented by managers and lawyers in the event they fire their agents. Earlier on Friday, the ATA sent a letter to WGA leadership saying that this plan violates California and New York law.

Read the WGA’s full email below:

Fellow Members,

Last Saturday, at the agencies’ request, the Guild gave them six days beyond AMBA expiration to provide us with a fair offer. They have not done so. Among other unacceptable proposals, the agencies insist on continuing their major conflicts of interest. They insist on continuing to produce and be our employers. Their “offer” on packaging is to share 1% of their packaging fee with writers. Here is the response David Goodman presented this afternoon at the bargaining table to the proposal the ATA made yesterday.

So there is no settlement. The membership voted by 95.3% to implement an Agency Code of Conduct if a negotiated settlement was not reached, and elected leadership set today as the deadline. As of midnight tonight, every agency will be required to become a signatory to the Code. And under WGA Working Rule 23, WGA Current members cannot be represented by agencies that have not signed the Code.

So what happens now? In a strike situation, we all know that we are to refrain from crossing the picket line or writing for a struck company, and we’re asked to show our solidarity by picketing, which is the public and moral face of our dispute.

In this situation there are two actions required of all members: First, do not allow a non-franchised agent to represent you with respect to any future WGA-covered work. Second, notify your agency in a written form letter that they cannot represent you until they sign the Code of Conduct.

Linked here is the form letter, in plain and respectful language, which accomplishes this task. Members who are represented by agencies not signed to the Code of Conduct must e-sign the letter. This letter also protects you legally in case of any future commission dispute. The Guild will forward all letters en masse to the appropriate agencies in a few days. Many of you will also want to inform your agents personally. We encourage you to do so and to ask them to sign the Code.

We know you may have questions about exactly how to deal with your agent. We have linked here to a set of rules of implementation and FAQs that clarify how to deal with agencies that are no longer franchised. It is important that you read both the rules and the FAQ carefully. If you have additional questions about your situation, you should contact the Guild at: agency@wga.org.

We know that, together, we are about to enter uncharted waters. Life that deviates from the current system might be various degrees of disorienting. But it has become clear that a big change is necessary.

We will not only stand together, we will stand up for each other, lean on each other. We can do this.

In Solidarity,

WGA-Agency Agreement Negotiating Committee