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The Courts Businesses Movies

Netflix Ordered To Stop Poaching Fox Employees (variety.com) 96

Posted by BeauHD from the cease-and-desist dept.
A court on Tuesday issued an injunction barring Netflix from poaching employees from Fox and confirming the validity of fixed-term employment agreements. Variety reports: The ruling marks a hard-fought victory for Fox -- now owned by Disney -- which set out three years ago to stop Netflix from raiding its employees. Netflix had sought to invalidate Fox's fixed-term employment contracts, arguing that they locked employees into jobs they no longer wanted. Had Netflix prevailed, it would have upended a standard industry practice and given employees greater leverage in negotiations with their employers.

Santa Monica Superior Court Judge Marc Gross issued a tentative ruling on Nov. 25 indicating how he was likely to rule in the case. He affirmed the conclusions of the tentative opinion and made addition points in his final ruling on Tuesday. Netflix has indicated it is likely to appeal. Netflix said: "As Judge Gross ruled, Fox failed to prove it was hurt in any way when two executives decided to exercise their right to go to Netflix. Fox's illegal contracts force employees to remain trapped in jobs they no longer wish to do and at salaries far below market rate. We 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."
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Netflix Ordered To Stop Poaching Fox Employees More

Netflix Ordered To Stop Poaching Fox Employees

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  • Damn. Those poor executives stuck with their multiyear contracts that they signed. Perhaps we can start a Go Fund Me to help them out?

    • Re:Sucks (Score:5, Insightful)

      by alvinrod ( 889928 ) on Wednesday December 11, 2019 @07:25PM (#59510442)
      They should just fuck up so badly that the company pays them to leave. Executives are almost the only group of people that get rewarded as much for failure as success. They’re like puppies that get treats for shitting on the carpet.

      Also don’t work in a state where your employer owns you either. If you don’t want me to work for your competitors feel free to keep paying me to stay at home, but once the checks stop what I do is none of your business.
      • This is nothing to do with the state, if you sign a contract then later say I changed my mind umm that is actually why you have a contract so that you have to stick to it. Don't want a fixed term, don't sign the contract.

        • Re:Sucks (Score:5, Informative)

          by alvinrod ( 889928 ) on Wednesday December 11, 2019 @09:08PM (#59510914)
          Actually it does, because in the United States there are a few states where non-compete clauses are unenforceable [wikipedia.org] so it doesn't matter what a company puts in the contract. Other states have various restrictions or regulations governing such clauses. There's a reason a lot of tech companies set up in California, and a big part of it has to do with being able to poach talented developers from other companies without them having any legal recourse.

          • Re: (Score:2)

            by guruevi ( 827432 )

            I think it's still a violation of your 4th amendment rights if a contract gets cancelled by the state without any just compensation. If you don't want the contract to be enforceable, don't sign it, it's simple as that, the state should have no business telling consenting adults what they can and can't do.

        • Too fucking bad. The worst you can do is fire them and not pay them for the remainder of the contract.

          Forcing someone to work for someone else when they don't want to is slavery. The judge is a fucking piece of shit that needs to go away.

          • Re: (Score:2)

            by guruevi ( 827432 )

            Slavery is compulsory from the beginning without proper compensation. Nobody is forcing you to sign the contract (which is what slavery would be). It's a violation of the 4th amendment (right against state seizure of property and papers) for the state to cancel a valid contract without just cause.

            • A contract can be voided by the state if it is "severely one-sided". Preventing someone from working in the industry of their expertise even when they're not employed or paid by you could be considered severely one-sided.

      • Executives are almost the only group of people that get rewarded as much for failure as success.

        "Almost." When a government program or agency fails to deliver on its (stated) goals, that can result in additional funding. "It's a good idea. We didn't make a mistake when we passed that bill. These apparent failures are the result of insufficient funding."

        And really, firing the government employees who had that failure wouldn't be fair. They were hamstrung by inadequate funding. Right? Riiiiight.

        Why does the TSA still exist? It's not because of its sterling performance. Ditto Amtrak. Ditto th

    • Please send us money, our movies made no profits because I wrote myself a check for a billion dollars. [wikipedia.org]

  • Lawyer speak (Score:3, Insightful)

    by chesh1re ( 5463980 ) on Wednesday December 11, 2019 @07:21PM (#59510418)
    Let em friggin walk. These companies live by the sword they should have to die by it too. Jobs deserve competitive marketplaces and Netflix, in this case, was offering just that. Fox got that Disney magic now..

  • It's your own fault, or is it? (Score:4, Informative)

    by OrangeTide ( 124937 ) on Wednesday December 11, 2019 @07:27PM (#59510450) Homepage Journal

    Netflix and Disney, both are based in California, which specifically protects employees from non-compete clauses. So in spirit Netflix is right here.

    But what is interesting is that this isn't exactly a non-compete issue, but it is an issue with a fixed length employment contract. A contract that the employer(Fox) can extend at their own discretion.

    I'm no judge, but indefinite length contracts don't sit right with me from a common law point of view. I suppose Netflix could make a hail-mary and go after the Thirteenth Amendment, because involuntary servitude is not dependent upon compensation or its amount. By some crazy mental gymnastics I think the first time this "fixed-term" contract is extended at the employer's choice it becomes involuntary servitude.

    • If you don't like the terms then don't sign the contract! People are expected to keep their word, if not there are consequences. What the hell is wrong with people?

      • Re: It's your own fault, or is it? (Score:5, Informative)

        by Way Smarter Than You ( 6157664 ) on Wednesday December 11, 2019 @08:04PM (#59510602)
        This case will play out in appeals but no you can not sign a contract that has illegal terms. The boiler plate will say the contract in severable and in parts and that if one part is determined to be invalid/illegal, the other parts shall remain in force. For example, you can not legally sign a contract to murder for hire because murder is illegal. If a court eventually determines Fox's contract amounts to indentured servitude, which is illegal and IMO the contract does, then that part of the contract is voided. Contracts are not magic. The terms must adhere to the law.

        • Is that what this is about? Someone in California is arguing that fixed-length employmet clauses are illegal? If so then CA can kiss all of their pro sports teams goodbye as well as every major corp still based there.

          This is insane.

          • Re: (Score:2)

            by Cyberax ( 705495 )

            If so then CA can kiss all of their pro sports teams goodbye as well as every major corp still based there.

            Why is that? Although getting rid of sports teams would be a nice bonus.

            • Because athletes are bound by fixed-length employment contracts.

              I suppose if you don't enjoy something no one else should either?

              • Re: (Score:2)

                by Cyberax ( 705495 )

                Because athletes are bound by fixed-length employment contracts.

                Athletes are free to leave at any moment, just like any other employee. They simply won't be able to sign with another team in the same league.

                • How is that any different than this story?

                  • Re: (Score:2)

                    by Cyberax ( 705495 )
                    The athletes can't sign with other teams because these teams have their own contracts with the league, not because of any clauses within the employment agreement. For the situation to be the same, both Netflix and Fox need to be under a contract with a third party entity that would prohibit such signings.

                    • Re: (Score:2)

                      by guruevi ( 827432 )

                      That's not true, teams can sign athletes at any time and they sometimes do. They may not be able to play in a particular season depending on particular league rules, but they can train, promote, play in non-league (eg. a benefit game) and do other jobs.

                      Some leagues like NFL do have rules on how they can sign up a player to play in the league's seasons so it may not be useful to sign an athlete outside if you want them to play in that league, but for most sports that isn't the case. However the NFL does allo

                • They simply won't be able to sign with another team in the same league.

                  Why not? CA bans non-compete terms in employment contracts.

                  • Re: (Score:2)

                    by Cyberax ( 705495 )
                    Teams contracts with the league prohibit them from signing players who break their contracts.

                    • Teams contracts with the league prohibit them from signing players who break their contracts.

                      Sports leagues may be different, but otherwise CA doesn't allow such agreements.

          • Re: (Score:3)

            by ghoul ( 157158 )

            Sports teams are almost the last place left where indentured servitude is still legal. Funny that most sports teams nowadays are predominantly African American atheletes supervised by white coaches. Some folks never learn.

            • Sports teams are almost the last place left where indentured servitude is still legal. Funny that most sports teams nowadays are predominantly African American atheletes supervised by white coaches. Some folks never learn.

              Yeah, those guys earning $10m / year and retire rich at age 35.. so downtrodden.

          • Re: It's your own fault, or is it? (Score:5, Insightful)

            by Way Smarter Than You ( 6157664 ) on Wednesday December 11, 2019 @10:20PM (#59511082)
            No. I don't think fixed length is necessarily a problem. The provision I think will be killed on appeal is that the employer can extend the contract repeatedly, at their discretion, for the life of the employee. The contact does not terminate. You think that is sane?

          • Indefinite length employment contracts. Not fixed length. A fixed length contract by definition has a date by which without agreement by both parties it will expire.

      • Re: (Score:2)

        by ghoul ( 157158 )

        Those slaves who boarded the ships in West Africa in return for a few beads given to their village headman should have known better. Its their own fault that their descendants were still slaves after 6 generations.

        Thats pretty much what you are saying

      • Contracts aren't magical pacts. They have meaning only because there is a force monopoly that can enforce them. What's in question here is whether or not these contracts follow the force monopoly's rules for contracts, and thus whether they'll be enforced. This morality play about "words" and "consequences" is a non sequitur.

      • One interesting thought...why is Fox going after Netflix? The contract is between the employee and Fox. Netflix is not a party. Netflix should be free to offer employment to the employee of Fox. If the employee takes the employment with Netflix that employee is breaking their contract with Fox. Fox can then pursue a lawsuit against that employee individually. Fox probably doesn't want to go after each employee individually. It's too costly. Instead, they chose to go directly after Netflix.

        Further, F

    • This sounds like there might be some special provision for employees in the entertainment industry, keeping them from being protected from non-competes; maybe because of Hollywood influence.

      Wonder if someone can confirm. Perhaps by RTFA.

      • Might be fun if someone blew away special Hollywood arrangements using the Declaration of Rights in the California Constitution and the Equal Protection Clause.

        Honestly I have no problem with fixed term contracts, either from a philosophical standpoint or a legal one. But if it's an unlimited term contract pretending to be a fixed term contract, then I very much take issue with the judge's ruling so far.

    • The two employees in question hadn't completed the original term of their fixed-length contracts, so the legal issues surrounding the contract extension are irrelevant to the case. Those extension clauses may very well be illegal, but this case isn't going to decide that, as judges don't like to rule on tangential issues that don't apply to the facts of the case at hand.

      • I thought one did get the extension, based on the duration cited.

      • You can always say "I quit" and walk away.

        You can always go work for someone else.

        Anything else is slavery.

        • Re: (Score:2)

          by guruevi ( 827432 )

          You can, but it may still be a breach of contract. That's the issue here. If I say, you get $1M to work for 1 year, and you quit after 2 days, I'll want the majority of my money back. If you have a special skill and I put a lot of effort in signing you up and I agreed to pay for eg. search and relocation costs, I may want that money back too.

    • I'm no judge, but indefinite length contracts don't sit right with me from a common law point of view. I suppose Netflix could make a hail-mary and go after the Thirteenth Amendment, because involuntary servitude is not dependent upon compensation or its amount.

      If you can sign away your rights under the Seventh amendment (enforcement of contracts requiring arbitration), what's to stop you signing away your rights under the Thirteen Amendment?

      • If you can sign away your rights under the Seventh amendment (enforcement of contracts requiring arbitration), what's to stop you signing away your rights under the Thirteen Amendment?

        The Seventh Amendment lost its teeth from the Federal Arbitrations Act of 1925 and the Wagner Act. I would imagine some legislation combined with some rulings would have to happen for the Thirteenth to be equally impotent.

        What's kind of screwy is that in many circumstances if both parties don't understand the contract they've signed then there is some room to dispute it in court. But rulings so far have affirmed that once you sign a contract with forced arbitration, then you're stuck with it. It can make it

    • Re: (Score:2)

      by guruevi ( 827432 )

      Fox can't extend a contract without consent, the fixed term still applies but it must have a clause that both parties can cancel the contract at that time (perhaps with notice).

  • The summary here makes no sense. A fixed-term employment contract cannot prevent you from quitting your job. It may require you to give notice, and if you got some up-front money from the company, such as a signing bonus, tuition assistance, transportation expenses, etc., the contract might force you to pay that back (though a company poaching that employee would typically offer to cover that expense if they are actually serious, making it a no-op for the employee). But an employment contract can't gene

    • Re: (Score:2)

      by Cyberax ( 705495 )

      What am I missing?

      Campaign donations from Hollywood studios.

      • To the judge?

      • What am I missing?

        Campaign donations from Hollywood studios.

        But ... but ... I thought Hollywood was full of superior people who cared so much more for the little guy than us eeevil wascally wepubwicans?

    • Think of it like an athletic contract. You sign a contract for 5 years $20 million.

      • Re: (Score:3)

        by dgatwood ( 11270 )

        Think of it like an athletic contract. You sign a contract for 5 years $20 million.

        Sports contracts are enforceable mainly because no other team in the league would dare try to violate them, and because their contract with the league likely requires them to honor them. That's very different from two random companies with no such relationship.

        Also, sports teams stand to lose a lot of money if a specific person leaves, because those people are part of the team's branding. It is more than an employment contr

      • A contrary decision would not make things more difficult for sports teams. Just write a contract for 5 years at $1M/year and a $15M bonus after 5 years.

    • You brought up two legal issues, non-compete, and fixed-term contracts.

      Suppose you hire me to babysit your code for four hours while you go to a concert. We agree on $100 for four hours. Just as the concert starts, I call you and say "I'm done. Don't forget my $25". You would not legally be obligated to pay me $25 for one hour, because we agreed on $100 for hours, not $25/hour for as long as I feel like.

      In California, Labor Code Section 2924 and 2925 say that either party breaches the a fixed-term employme

      • Re: (Score:2)

        by dgatwood ( 11270 )

        Suppose you hire me to babysit your code for four hours while you go to a concert. We agree on $100 for four hours. Just as the concert starts, I call you and say "I'm done. Don't forget my $25". You would not legally be obligated to pay me $25 for one hour, because we agreed on $100 for hours, not $25/hour for as long as I feel like.

        I would say that's more of a fixed-price contract, not a fixed-term contract. You're talking about a contract that stipulates a price to perform a specific task (babysitting w

        • You mentioned tortious interference. THE textbook example of tortious interference is a third party inducing a party to a contract to breach the contract.

          That's exactly what happened here. Someone contracted to work three years. Presumably they get 80% of their pay or whatever as they go along, and 20% upon completion of the contract.

          A third-party comes along and says "I'll pay you $100K to breach the contract".

          > because clearly the employee wasn't happy at that job, or else the employee would not have

          • Btw I think it's worth being clear that it would have been perfectly lawful for Netflix to try to woo Fox employees who don't have a contract for a specific term.

            It would have been fine if they said "we want to birw you when your contract is up".

            It's tortious to say "we'll pay you off to breach your contract".

            Breaching a contract, breaking a promise you've been paid to keep, is considered a wrong. Paying someone off to get them to do wrong is interference under the law.

            • Netflix is not a party to any such contract.
              Netflix has no specific knowledge of any such contract.
              Netflix is free to offer jobs, and hiring bonuses/perks, to anyone.
              No contract can force a person to continue working for someone they don't want to.
              NOT making market rate offers to qualified applicants or NOT seeking out said applicants would get them in trouble - much of silicon valley already got busted for their coordinated wage suppression bullshit.
              You can't interfere with terms of a contract that are ill

              • Re: (Score:2)

                by dgatwood ( 11270 )

                It's tortious to say "we'll pay you off to breach your contract".

                That's not necessarily true. If it were, it would be illegal to hire anyone who doesn't quit his/her job before interviewing, because in at-will-employment states, the existence of some sort of employment contract must be assumed to exist for anyone who has a job, and hiring people requires them to violate their duty of loyalty.

                Also, at least in California, for tortious interference to occur requires the third party (Netflix) to lack any priv

    • there's been 30+ years of the stuff. The Courts have been packed with pro corporate judges. These are the results. It was money well spent.

    • What if the employees just stopped coming into work? Fox would either have to fire them, or keep paying their salaries. Perhaps they have a package means that most of their income is in the form of bonuses.

      Limitations on anti-compete clauses would mean that they could start working for Netflix the day they are fired.

      Personally, I think that this decision will be reversed on appeal. It goes against CA policy, which is supposed to support employee mobility.

    • It's not a ruling yet. It's a judge saying he got the check from Disney and will rule in their favor once it clears.

  • America was really powerful nation and had a great economy going back when indentured labor was legal. It is high time to bring it back. What's the big point in accumulating enough wealth to be in the top 0.1% if your hired help can just up and go whenever they feel like? You know how difficult it is these days to find reliable servants now a days? They ask for two even three dollars more than the minimum wage per hour! And then the absenteeism, gossiping, tipping off paparazzi where we'r gonna be...

    I for

    • That....isn't exactly what is happening. I don't think you guys get it: these are executive contracts where they sign up for 3 years of service for several million dollars. After a couple of years they get offers from other companies wanting to give them even more millions. But they signed a 3 year contract.

      • I think the view might be something along the lines that Fox was trying to get around the various Californian labour laws that prevent employers forcing employees to sign non-compete clauses and the like.
        The fixed term nature of the contract seems to have been at Fox's discretion as well, which sounds wrong to me.

      • Re: Indentured Labor is legal now. (Score:5, Insightful)

        by Way Smarter Than You ( 6157664 ) on Wednesday December 11, 2019 @08:07PM (#59510620)
        You're missing a key point. Fox can extend the contract repeatedly at Fox's discretion. This is a contract for life, 3 years at a time, terminal emergency only by Fox. Serf. Indentured servant. Slavery. Call it what you will. It is illegal and I'll be shocked if this stands on appeal as it is clearly in violation of all sorts of laws. If it stands then watch this become the standard in Silicon Valley which will lead to the stagnation and death of the tech economy.

        • It's called a contract. Unless that clause was hidden from the person signing to it then they agreed to it voluntarily. You cheapen the evils of slavery but attaching the word to things you don't like.

          • Re: (Score:2, Insightful)

            by Anonymous Coward

            If that contract was negotiated between equals, then you might have a point.

            But the only time employers and employees are on equal terms is when sports and movie stars are involved - at which point I'm sure you'll whine about how the stars are spoiled or something.

            • I suppose, in the sense that the employee actually had more leverage than the eeevil corporation during the contract negotiation since the employee's labor is in demand. The eeevil corporation had to compete with other eeevil corporations for that labor. Hence the employment contract agreed to by both sides.

          • You don't seem to understand contract law. If any part of the contract is determined to be illegal, such as Fox having life long contract extension rights, then that part is illegal and it doesn't matter what was signed. Hey, let's you and me sign a contract. You give me $5 and I'll kill anyone you like. Oh wait, nurse for hire is illegal. You can't require I kill someone. Even though, yes, "I signed a contract".

          • You can't agree to be a slave, moron.

        • Is it really indentured servitude though, when the "servant" can simply stop coming in to work?

          It sounds more like Fox is willing to keep paying these people just so they can't work anywhere else. Sounds like it violates the non-compete protections CA has in place, but it doesn't sound like a 13th Amendment issue.

        • employees will be screwed, but employee welfare doesn't really matter in the modern economy. This is something a lot of folks have a really, really hard time grasping. An economy without happy employees or good jobs anywhere.

          I think it's a defense mechanism. We don't want to believe in the dystopia that's unfolding before our eyes. I know when I used to point out the War Crimes done by Bush Sr, Bush Jr and eventually Obama (look them up, and what else would you call drone strikes to cause fear but terro
        • Comment removed based on user account deletion

      • Re: (Score:2)

        by ghoul ( 157158 )

        Nothing prevent Fox from signing contracts where 50% of the pay is given as stocks to be vested at the end of 3 years. If someone is willing to walk away from 50% of their pay then your company sucks.

      • For the top 0.1%, several million dollars are minimum wage.

      • The only such "service" you can sign up for in this country is with the military, and even they will let you out if you want out.

        You can't fucking own people for fixed periods of their life.

  • Am I reading it right?

    A fixed term contract, that one can not resign from where the employer has the automatic right of renewal regardless of employee desire?

    (Not dismissing that I may be having a comprehension failure)

    • You are reading it correctly. Many posting here have missed that critical point.

    • There's all kinds of wrong in that sort of contract, but...

      Can you be fired from it?

      If you can - why wouldn't people just get fired?
      If you can't - why are people still going to the office?

  • Fairly recently, Apple, Google, eBay, and a few others were slapped down hard for *NOT* poaching each others' employees. But now, no-poaching clauses are suddenly legal and Netflix is forbidden to poach? Well, I guess it just goes to show which companies and industries have bought the most politicians; and it ain't tech.

    • It sounds more like they were ordered to stop inducing individuals to engage in breach of contract, but it was restated as “ordered to stop poaching” to make for a more sensationalist headline. If these really are legal contracts, and by all accounts they are, then it’s a simple enforcement of contract law, nothing more, despite Netflix’s attempt to reframe the situation as an employee’s rights issue. Unlike the situation you’re talking about, where rights were being deni

  • Somebody should...

    Set up a consulting company that hires employees trapped in non-compete clauses or whatever, and then rents them out to the companies that would have hired them away from their current employers. All for a very reasonable fee of 5% of the employee's salary... ahem, I mean contractor fee.

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