Netflix Fires Back at Poaching Accusations by 21st Century Fox

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 [e-mail]

(END) Dow Jones Newswires

October 19, 2016 20:44 ET (00:44 GMT)

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