Typically, when mammoth conglomerates lock horns over a heated lawsuit, it is a matter of hundreds of millions of dollars. In the case of Fox versus Netflix, the former is seeking just $1, but the dispute between the companies could result in a pivotal decision pertaining to the streamer’s executive recruitment process.
In 2016, Tara Flynn, a development executive at Fox 21 TV Studios, and Marcos Waltenberg, a filmmaking executive, defected for Netflix amid its corporate hiring spree. Fox caught the streaming giant off guard with a subsequent lawsuit that claimed that Netflix induced breaches of contract. But Fox is only seeking $1 in its suit if Judge Lawrence Cho grants the studio summary judgment on claims that Netflix was aware of the contractual obligations and continued to interfere regardless.
Essentially, the question is this: Can a studio stop its rivals from courting its employees with existing contracts to switch teams? Given the nuances of law, the answer remains ambiguous.
“Netflix has systematically executed a blueprint for poaching,” states Fox’s motion in the Los Angeles Superior Court, per The Hollywood Reporter. Fox’s attorney Daniel Petrocelli reportedly detailed in his filing an internal Netflix document that includes notable executives at other companies and the duration of their unexpired contracts. Additionally, Petrocelli claims Netflix’s unethical practices include “communications through personal email accounts, the provision of free legal counsel for executives thinking of leaving a rival studio, and indemnification in the event of litigation,” per the outlet.
In response, Netflix has said it does not view Fox’s use of “fixed-term employment contracts” to be “enforceable” in these instances and described the studio’s current employment structure as a “hostage”-taking endeavor. The streaming service is seeking to have Fox’s system declared void by a California judge.
A trial is currently set for May.