Corporate dispute pits Netflix against 21st Century Fox
In an unusual legal dispute, two giants in the California entertainment industry are fighting over the recruitment of top executives. The corporate dispute pits industry veteran 21st Century Fox against plucky upstart Netflix. Fox claims that Netflix has effectively “poached” executives away from Fox. Fox has filed a lawsuit in the matter, and Netflix responded with a counterclaim. Both parties appear prepared to defend their position in court, if necessary.
Fox asserts that several executives have left the company to pursue opportunities at Netflix in recent months. Fox did not make waves over those changes, but when two more individuals left their positions at Fox, the company decided to take action. Fox asserts that those two individuals were working under strict fixed-term contracts and did not have the right to leave the company for greener pastures while the contract were in effect.
Netflix, on the other hand, argues that the contracts are not valid because they serve to prevent employees to move from one company to another. They also claim that these types of contracts stifle competition for highly skilled employees. That, Netflix claims, is a violation of the state’s Business and Professions Code.
This case is just one of many examples of how Netflix is changing the entertainment industry. If the current lawsuit is resolved in the favor of Netflix, that outcome could have an impact on many other companies in the entertainment industry, and in other areas of business. Many in California will follow the case to see how the corporate dispute is ultimately resolved.
Source: Los Angeles Times, “Netflix spars with 21st Century Fox over allegations it is poaching executives“, David Ng, Dec. 6, 2016
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