Fox Wins Favorable Ruling on Employee Poaching by Netflix

(Bloomberg) -- Twentieth Century Fox is poised to win a court ruling that blocks Netflix Inc. from trying to recruit executives by inducing them to violate their employment contracts.

The poaching allegations against Netflix come as Fox, now owned by Walt Disney Co., and other traditional movie studios are facing growing competition for top Hollywood talent by the video-streaming juggernaut.

California Superior Court Judge Marc Gross on Monday sided with Fox in a tentative ruling that the studio’s fixed-term contracts are valid and enforceable, rejecting Netflix’s argument that they unconscionably restrain employees’ movements.The judge also agreed that Fox is entitled to an order preventing Netflix from interfering with its contracts and found that Netflix’s practices violated the state’s unfair competition law.

But the judge declined to decide without a trial whether Fox is entitled to damages over Netflix’s recruitment of two executives in 2016. If the case doesn’t settle, it’s set for a trial in January.

“We’re very pleased with all the hard work and careful consideration the court has given to this matter and we look forward to the court’s final decision,” said Daniel Petrocelli, an attorney for Fox.

Netflix said the ruling establishes that “Fox failed to prove it was hurt in any way when two executives decided to exercise their right to go to Netflix.”

“We will continue to fight to make sure that people who work in the entertainment industry have the same rights as virtually every other Californian and can make their own choices about where they work," Netflix said in a statement.

To contact the reporters on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net, ;Sarah Favot in Los Angeles at Sarah.favot@gmail.com

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Anthony Lin

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