Netflix Recruiting Blocked -- WSJ

Judge forbids hiring executives signed by Fox studios after rivals claimed poaching

By Joe Flint 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 12, 2019).

A California judge issued an injunction against Netflix Inc. prohibiting the streaming-video giant from trying to hire Fox television and film executives who are under contract.

The ruling late Tuesday in Los Angeles Superior Court hands a victory to Twentieth Century Fox Film Corp. and Fox 21 Inc., the studios that sued Netflix in 2016 for allegedly poaching their executives.

Walt Disney Co. this year acquired the Fox units as part of its $71.3 billion purchase of 21st Century Fox entertainment properties. At the time the lawsuit was filed against Netflix, 21st Century Fox shared common ownership with Wall Street Journal parent News Corp.

Big players in Hollywood are battling to sign up top talent -- from executives to TV-show and movie creators -- as competition over streaming intensifies. Netflix in recent years has aggressively recruited people with Hollywood experience, often promising huge pay increases.

In its 2016 complaint, Fox said Netflix had orchestrated 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."

Netflix countered that Fox's contracts were "unlawful and unenforceable" under California law because they "unreasonably restrict employee mobility, stifle competition and artificially suppress salary levels."

In his ruling Tuesday, Judge Marc D. Gross said Netflix doesn't have the standing to challenge Fox's employment agreements and may not solicit Fox employees who are under fixed-term agreements.

"The Court's ruling brings to an end years of unlawful poaching by Netflix," said Daniel M. Petrocelli, an attorney who represented Fox in the case. "The decision not only condemns Netflix's deliberate violations of the law, but just as importantly, reaffirms and protects the rights and choices of employees."

Netflix can appeal the ruling. In a statement, Netflix spokesman Richard Siklos said the company "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."

Write to Joe Flint at [e-mail]

(END) Dow Jones Newswires

December 12, 2019 02:47 ET (07:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.