21st Century Fox Sues Netflix Over Executive Poaching (latimes.com)

An anonymous reader quotes a report from Los Angeles Times: 21st Century Fox on Friday filed a lawsuit against Netflix, accusing the streaming video giant of illegally recruiting two of its executives who were under contract. The suit, which was filed Friday in California Superior Court in Los Angeles, says Netflix engaged in a "brazen campaign to unlawfully target, recruit, and poach valuable Fox executives by illegally inducing them to break their employment contracts with Fox to work at Netflix." The lawsuit was sparked following the exits of two Fox executives: Marcos Waltenberg, who made the jump to Netflix earlier this year, previously worked as a marketing executive at Twentieth Century Fox Film; Tara Flynn, who made the move to Netflix just last week, had been the vice president of creative affairs at Fox 21 TV Studios. Fox alleges that Netflix pursued and hired the executives even though it knew they each had employment contracts that were still in effect, according to the complaint. The Century City-based studio is seeking an injunction to prevent Netflix from interfering with its employment contracts, as well as compensatory and punitive damages. A Netflix spokesperson said in a statement: "We intend to defend this lawsuit vigorously. We do not believe Fox's use of fixed term employment contracts in this manner are enforceable. We believe in employee mobility and will fight for the right to hire great colleagues no matter where they work."

Comments

Re: Did the contracts have a "Key person" clause

[HornWumpus]

INAS (I am not a shyster), but working in CA for decades.

Non competes are only binding in California when the people involved are 'business principles' and the non compete is narrowly structured.

A CEO's non compete is binding (if narrow) a regular employees is not.

These are 'executives' so maybe, but odds are low.

Long term employment contracts in the USA cannot be held for 'specific performance' as that gets close to slavery (history: Indentured servants), but damages can be assessed.

Re:Let me see if I understand

[Richard_at_work]

There is a concept that is alive and well in contract law called "Torturous Interference" - if Netflix did indeed incite these execs to breach their contracts, they have a case to answer.

Re: Did the contracts have a "Key person" clause

[whoever57]

INAS (I am not a shyster), but working in CA for decades.

Yes, it's just as well that you are not providing legal services:

In California it is a bright-line rule: Employee noncompete agreements are void. It does not matter how reasonable or well-intended they are.

That page lists the only exception:

Are Any Non Compete Agreements Legal in California?

Only for owners of a business, corporation, LLC, or partnership.

These people may own some shares, but that doesn't make them an "owner" for this purpose.