The rise of Netflix as the premiere destination for binge movie watching has benefited millions of viewers worldwide but has roiled several incumbent media companies. Its latest spat with 20th Century Fox Films highlights once again how Netflix is shaking today's movie and entertainment industry.
Twentieth Century Fox has sued the online streaming media company as it accuses the latter for poaching its workers.
In an emailed statement to Bloomberg, Netflix rebutted the legality of Fox's employment contracts and maintained its position to defend its actions in court.
Fox filed a lawsuit on Friday alleging Netflix of illegally recruiting several high ranking executives to breach their fixed-term employment contracts. Fox said that Netflix seemed to have caused at least two high level employees to jump ship.
According to Variety, Netflix recently brought in Marcos Waltenberg, a Twentieth Century Fox's vice president of promotions, along with Tara Flynn, the creative executive at Fox 21. Flynn got hired in August, while Waltenberg was hired much earlier in January.
Fox's lawsuit states that Flynn was still under contract at Fox until November 2019, while Waltenberg's contract was going to end by 2016, although Fox had the right to extend the contract for two more years.
Fox said in a statement: "We filed this lawsuit because we believe Netflix is defiantly flouting the law by soliciting and inducing employees to break their contracts. We intend to seek all available remedies to enforce our rights and hold Netflix accountable for its wrongful behavior."
A Netflix spokesman said, as quoted by Variety, "We do not believe Fox's use of fixed term employment contracts in this manner are enforceable. We believe in employee mobility and will fight for the right to hire great colleagues no matter where they work."
According to California's labor laws, employees can generally move freely between firms; however, the right to transfer from one company to another is also affected by the specific contractual provisions a worker signed with an employer.
Lawyer Devin McRae from Early Sullivan Wright Gizer & McRae LLP in Los Angeles said that fixed-term job contracts are generally enforceable in comparison to non-compete clauses which can only take effect after an employee has resigned.
