Netflix Fires Back at Poaching Accusations by 21st Century Fox
October 19 2016 - 8:59PM
Dow Jones News
By Joe Flint
Netflix Inc. fired back at accusations that it illegally hired
two executives who were under contract from 21st Century Fox.
In a cross-complaint filed Tuesday in California Superior Court
in Los Angeles responding to 21st Century Fox's poaching suit, the
streaming-video giant questioned the legality of the fixed-term
contracts the two employees had signed.
Netflix said Fox's contracts are "unlawful and unenforceable" as
a matter of California law because they "unreasonably restrict
employee mobility, stifle competition and artificially suppress
salary levels."
Fox didn't immediately respond to requests for comment.
Fox filed its suit last month after Netflix hired two executives
that were still had significant time left on their current
contracts. Fox said Netflix was running a "brazen campaign to
unlawfully target, recruit and poach valuable Fox executives by
illegally inducing them to beak their employment contracts with Fox
to work at Netflix."
The tampering suit has become a topic of discussion in
Hollywood. While entertainment companies are aggressive
competitors, they also often conduct business with each other. Fox
sells television content to Netflix on a regular basis.
However, the growing prominence of Netflix is causing tensions
among the old guard. Before this suit, 19 other employees who
weren't under contract jumped ship from Fox to Netflix over the
past two years, according to a person familiar with the matter.
In its cross-complaint, Netflix said "no legitimate business
reason exists to justify Fox's use of fixed-term employment
agreements" and that the two executives they hired away don't meet
the requirements of personal service agreements of actors or
musicians tied to a particular project.
Neither employee, Netflix said, provide services "that weren't
actually unique special or unusual."
The tensions between Fox and Netflix are unlikely to die down
soon. In its filing, Netflix said it is interested in "pursuing
additional Fox current and former employees for potential
employment opportunities."
21st Century Fox and News Corp., parent company of The Wall
Street Journal, share common ownership.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
October 19, 2016 20:44 ET (00:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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