April 02, 2014 12:32am PT by Debbie Emery
Netflix, Amazon Sued by Former Executive in Million-Dollar Lawsuit
A former executive at Netflix has filed a defamation lawsuit against both the digital streaming service and Amazon, claiming that Netflix leveraged its status as a key Amazon customer to ensure he would be fired from his new job there.
In a lawsuit filed at the Los Angeles Supreme Court on Tuesday, Jerry Kowal alleges defamation, false light invasion of privacy, civil conspiracy, intention of interference of employment relationship, blacklisting and wrongful termination.
Read the complaint here.
Describing the case as the "proverbial David and Goliath," the lawsuit claims that Netflix used Amazon to blacklist a once "valued and profitable executive."
In his role at Netflix as the director of content acquisition in its Beverly Hills office, the suit says Kowal was responsible for licensing television and film content for Netflix's subscription video-on-demand service, and that he was entrusted with a huge amount of responsibility, including oversight of content acquisition for Canada.
The suit describes the work environment at Netflix as "cold and hostile," with a "winner takes all" mentality. Kowal says he resigned in June 2013 to pursue an opportunity with the Digital Video team at Amazon. He claims he was warned that he would "regret going to Amazon."
Kowal alleges after beginning his new job at Amazon, Netflix execs publicly accused him of stealing confidential information for use at Amazon to compete against Netflix, and then told its other employees not to communicate with him. The lawsuit also states that Netflix interfered with his employment "in a malicious attempt to ruin his reputation and prevent him from working there," in order to get him fired.
Netflix CCO Ted Sarandos (whom Kowal claims made disparaging remarks about Amazon) is named in the lawsuit, as is CEO Reed Hastings.
The lawsuit claims that at the company's Quarterly Business Review in San Francisco in July 2013, Hastings and Sarandos announced in front of 200 employees and board members that Kowal was under investigation for giving confidential Netflix documents and information to Amazon. The pair allegedly instructed employees to cut off communication with him. According to the lawsuit, he is now described by employees of Netflix to others as a "traitor" and a thief. Kowal also claims the Netflix execs have publicly stated that he will "never work in this industry again."
In July 2013, both Kowal and the vice president and general counsel for Amazon, Andrew DeVore, allegedly received letters from Netflix's lawyers claiming he used confidential information to unfairly compete in his new role. The letter demanded access to his personal e-mails and personal computer to conduct a forensic analysis to determine whether documents had been disseminated to Amazon, the suit claims. Kowal was subsequently placed on mandatory leave from Amazon, allegedly had his work laptop seized and was blocked from the company's servers.
According to the lawsuit, Amazon instructed him to meet with attorney Harry Korrell, who would act as Amazon's outside counsel in connection with the issues Netflix raised. Kowal says Korrell told him it was "sour grapes" from "spiteful former employers" and would blow over, and that Amazon later proposed a joint representation structure with Korrell and Kowal. He was later convinced to supply his personal devices -- including e-mail and USB -- for forensic analysis by the firm SFL Data, which concluded that he had not disseminated any of the documents in question, printed or copied them onto cloud storage, according to the lawsuit. However, Kowal alleges that Amazon refused to provide written verification of the results of the investigation.
Kowal also claims that before either of the investigations were concluded, Hastings leveraged Netflix's status as a key Amazon customer and contacted the "highest levels of Amazon's senior management" to secure assurance that his employment would be terminated whatever the results of the investigation. A week later, Korrell told him that Amazon's interests had diverged from his own and that the company would be ending "joint representation."
Kowal's suit says he was terminated on July 31, 2013, and that he was told that Amazon had a "strict liability policy" that mandated his termination in this case, which he says was never communicated by Korrell or anyone employed by Amazon.
Kowal is now seeking an amount to be determined at a jury trial of "no less than $1,000,000" for damages to his reputation and career. He is represented by Caroline H. Mankey, of Cypress, LLP.
The Hollywood Reporter reached out to Netflix for comment, but a representative for the company said it does not comment on pending litigation.