12:45pm PT by Eriq Gardner
Fox Sues Netflix for Poaching Employees
21st Century Fox is accusing Netflix in a lawsuit of running 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."
Fox is now seeking an injunction from a Los Angeles Superior Court judge that prohibits Netflix from interfering with its contracts with executives.
The lawsuit follows Netflix' hiring of programming executive Tara Flynn and marketing executive Marcos Waltenberg.
According to the complaint, Flynn had an employment agreement with Fox that began in 2013, ran for two years, and gave Fox the option of extending the term for an additional two years. In November 2015, Fox and Flynn are said to have amended their agreement for additional compensation with Fox getting the right to have her employed through most of 2019. She specifically worked for Fox 21 Television Studios and was focused on developing dramas and comedies for cable.
As for Waltenberg, his two-year deal is reported in the complaint to have run through 2016 with Fox having the right to extend an additional two years.
Netflix allegedly became aware of the agreements before inducing the executives to breach it. The suit represents a rare move by a Hollywood studio to address executive flight, but the rise of Netflix has sparked trepidation on the part of some big content companies.
Fox is represented by star litigator Daniel Petrocelli at O'Melveny & Myers and is also seeking compensatory and punitive damages.
In a statement, Fox says, "We filed this lawsuit because we believe Netflix is defiantly flouting the law by soliciting and inducing employees to break their contracts. We intend to seek all available remedies to enforce our rights and hold Netflix accountable for its wrongful behavior.”
A Netflix spokesperson issued the following 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."
The Wall Street Journal first reported news of the lawsuit.