Netflix Looks to Save Itself from Viacom's Poaching Suit

Netflix headquarters
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Netflix headquarters

Netflix is telling a Los Angeles court that it didn't unlawfully interfere with Viacom's contractual relationship with executives because those deals are unenforceable. In a summary judgment motion on Tuesday, the streamer also maintains that Viacom's unfair competition claim fails as duplicative, and that the CBS All Access owner is not entitled to any sort of injunction that would prevent Netflix from poaching employees.

If that all sounds familiar, it's because Netflix has been fighting a very similar legal battle with Twentieth Century Fox Film, now owned by Disney. There, Fox largely prevailed, obtained an injunction and the case has gone to the appellate phase.

So will the outcome here be any different? 

In a 22-page memorandum supporting summary judgment, Netflix doesn't explicitly articulate the differences in the two cases. That said, there's at least one notable factual discrepancy, namely, the contract of TV production executive Momita Sengupta. A section of her deal is titled "non-competition" and limits her employment opportunities after serving Viacom. A judge could find that in contrast to the executive deals presented in the Fox case, this more explicit non-compete amounts to an unlawful restraint on trade in violation of Business & Professions Code Section 16600.

Also, Viacom appears to be articulating a new theory on damage — one of the few areas where Fox failed in its own case. Netflix isn't impressed.

"Viacom takes its attack on that public policy to an extreme: not only does it seek an injunction barring Netflix from hiring its employees, Viacom insists that it is injured by Netflix’s mere communications with Viacom employees, even if those employees never leave," states the brief. "When pressed to explain its position, Viacom’s testimony was disturbing."

Unfortunately, that testimony is under seal for the moment

With that said, some of Netflix's arguments seem to echo contentions that were losers in the Fox battle — from efforts to beat an unfair competition claim to the argument that a chain of re-upped employment deals for Sengupta (who had a series of agreements spanning between 2002 and 2020) violates California's seven-year rule on personal service contracts.

Maybe a different judge than in the Fox case will come to a different opinion. (It's been known to happen.) Or perhaps Netflix's real play is looking beyond this summary judgment motion to the high-stakes appeal.

Here's the full summary judgment motion.