21st Century Fox Sues Netflix for Poaching Employees

21st Century Fox on Friday filed a lawsuit against Netflix Inc., accusing the streaming video giant of illegally hiring two of its executives who were under contract.

The suit, filed in California Superior Court in Los Angeles by Fox units Twentieth Century Fox Film Corp. and Fox 21 Inc., alleges that Netflix has run a "brazen campaign to unlawfully target, recruit, and poach valuable Fox executives by illegally inducing them to break their employment contracts with Fox to work at Netflix."

The two executives were Tara Flynn, who was hired last week as a drama programming development executive from TV production unit Fox 21, where she was vice president of creative affairs; and Marcos Waltenberg, a Twentieth Century Fox Film promotion executive who took a similar role at Netflix in January.

In both cases, Fox said, it warned Netflix that it was illegally tampering with executives under contract but the streaming company nevertheless hired the pair and indemnified them against potential charges of breach of contract, according to the suit.

"As a direct and proximate result of Netflix's conduct, Fox has suffered great and irreparable harm," the suit said. Fox is seeking a permanent injunction prohibiting Netflix from interfering with executives under contract as well as compensatory and punitive damages.

A Netflix spokesperson declined to comment on the suit.

21st Century Fox and News Corp, parent company of The Wall Street Journal, share common ownership

A tampering suit is rare in Hollywood. Industry leaders who compete with each other during the week often golf or play tennis together on the weekend or are involved in the same charities. In addition, executives frequently jump from one studio or network to another, often while still under contract. Usually some sort of accord is reached between the two companies to avoid ill will or legal action.

Sports broadcaster Al Michaels was famously released from his contract at Walt Disney Co.'s ESPN early to join NBC Sports in return for the rights to a cartoon rabbit named Oswald that Walt Disney himself had created that belonged to NBC's Universal Studios.

The lawsuit is the latest sign of how Netflix's rise as an entertainment behemoth has created tensions within the entrenched Hollywood community.

Write to Joe Flint at [e-mail]

(END) Dow Jones Newswires

September 16, 2016 15:45 ET (19:45 GMT)

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