Disney Board Members Facing Shareholder Lawsuit Over Anti-Poaching Pacts

Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg are among the defendants.
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After an investigation by the U.S. Department of Justice, lawsuits against various tech companies and later settlements, a dispute over how visual effects workers were allegedly denied better work opportunities and better compensation appeared to be drawing down.

But really, the case has escalated.

DreamWorks Animation, The Walt Disney Company, Sony Pictures and Blue Sky Studios are in the midst of an antitrust lawsuit contending that executives like Apple co-founder Steve Jobs, Pixar president Ed Catmull, George Lucas, DreamWorks CEO Jeffrey Katzenberg and others arrived at an arrangement not to poach each others' workers. In August, U.S. District judge Lucy Koh allowed the litigation to move forward.

The companies aren't the only ones facing the heat.

Disney shareholder Eugene Towers has brought a derivative lawsuit against current and former members of Disney's board of directors. That includes Disney CEO and chairman Bob Iger, Twitter CEO Jack Dorsey (who joined Disney's board in 2013), Facebook COO Sheryl Sandberg (on Disney's board since 2009), former Starbucks CEO Orin Smith (since 2006) and others.

The complaint filed under seal in late September (here's the redacted copy) asserts that the directors breached their fiduciary duties for having "allowed or permitted the Company to affirmatively violate antitrust laws, allowed or caused the Company to disseminate false and misleading statements in the Company's SEC filings and other disclosures" and caused "internal control failures."

The plaintiff says he wasn't on notice about potential claims until 2014. He's demanding that the board members provide restitution to Disney plus an order directing the company to take "all necessary actions to reform and improve its corporate governance and internal procedures," including putting to stockholder vote a proposal to strengthen supervision of the board and a proposal to permit stockholders to nominate three candidates for election to the board.

On Wednesday, Michael Nicoud, the attorney for Towers, brought a motion to consider relating this case to the existing one against the companies being overseen by Judge Koh. He writes this would "make the discovery process more efficient."

The Hollywood Reporter has reached out to Disney for comment.

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