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The Courts Businesses

Netflix Sued Again for Poaching -- This Time by Activision Blizzard (variety.com) 65

Posted by msmash from the tussle-continues dept.
Netflix is the target of yet another employee-poaching lawsuit. From a report: In a suit on Friday, Activision Blizzard accused the streamer of showing "contempt" for state employment law when it poached the company's chief financial officer two years ago. Netflix has been sued twice before -- by Fox and Viacom -- for allegedly luring away employees who are in the middle of fixed-term agreements. In the latest case, Activision alleges that Netflix hired away CFO Spencer Neumann when he was less than two years into a three-year contract. "Netflix has demonstrated a pattern of caring only about attracting and employing whoever Netflix wants, regardless of whether it violates the law along the way," Activision's lawyers allege. "Netflix's unlawful conduct is not trailblazing or innovative -- it is just reflective of Netflix's contempt for the law of the State of California." The suit notes that Netflix has been making forays into the video game market since 2017, making it a direct competitor with Activision.
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Netflix Sued Again for Poaching -- This Time by Activision Blizzard More

Netflix Sued Again for Poaching -- This Time by Activision Blizzard

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  • I may dislike Netflix (Score:3, Insightful)

    by jimjam420 ( 5335759 ) on Friday December 04, 2020 @03:53PM (#60795278)
    But I really, really hate Activision Blizzard

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Activision alleges that Netflix hired away CFO Spencer Neumann when he was less than two years into a three-year contract.

      Unless Netflix kidnapped him, your beef is with the employee, not Netflix.

      This is a really stupid complaint.

      • Re: (Score:2, Insightful)

        by darkain ( 749283 )

        No, it is pretty damn justified. Blizzard axes... what... like 800 employees around that time? And someone left WILLFULLY!? How the fuck dare they!?

  • Wait!! -- Anti competative hiring law? (Score:5, Interesting)

    by fish_in_the_c ( 577259 ) on Friday December 04, 2020 @03:58PM (#60795290)

    So .. that's about as completely wrong as any law I've ever heard. Which state is this. I mean if an employee doesn't fulfill a contract and you want to sue them over it , that is all good and fair, but what does his next employer have to do with your contract? If the next employer is willing to pay you enough ( and you previous employer bad enough) that you are willing to jump ship ( and pay whatever consequences are in your contract). That seems like it should be free enterprise to me.

    • Many companies have anti-poaching agreements built into NDAs

      • Many companies have anti-poaching agreements built into NDAs

        .. which are probably unenforceable in California.

        • well, the companies might well have NDA's but they weren't singed with the other company. They should not be able to sue a future employer only the employee.

        • California labor protections like anti-competes specifically exclude high enough level executives. Also, they tend to focus on protecting the employees, not counterparties to the NDA. That is, protecting the CFO (although not because he's a CFO) not the company that extended him the offer.

          • California labor protections like anti-competes specifically exclude high enough level executives.

            I may be wrong, but I don't think that this is quite correct. They exclude employees that were significant owners before an acquisition, but that's not the case here.

            Also, they tend to focus on protecting the employees,

            That's true, but they do penalize companies that make agreements not to poach. Remember when Google, Apple and other companies had to pay out a few million dollars to employees and former employe

      • Wait, you are saying Netflix signed an NDA with Activision Blizzard?

        • Re: (Score:2)

          by Bengie ( 1121981 )
          Encouraging someone to break a contract opens you to civil damages in regards to the contract broken. Or at least my layman's understanding.

    • Re:Wait!! -- Anti competative hiring law? (Score:5, Interesting)

      by Brain-Fu ( 1274756 ) on Friday December 04, 2020 @04:27PM (#60795400) Homepage Journal

      It's California. And according to this [hkm.com] random article I found:

      1) California state law makes non-compete (and anti-solicitation) agreements illegal, because it impinges upon an employee's ability to seek gainful employment.
      2) California courts, however, often rule in favor of such non-compete agreements if they have a limited term.

      Furthermore, the article states that when Netflix did this before, and argued that the non-compete agreement was illegal under state law, the court disagreed and further ordered Netflix to stop poaching.

      I am not a lawyer and not remotely educated along those lines, but my reaction here is that the state courts are the ones disregarding state law, and legislating from the bench.

      • lolwut (Score:1)

        by Anonymous Coward
        No dude. Noncompetes are illegal except in the most narrow situations in California (e.g., you sell your dentist's office, and as part of the sale you agree not to compete for a period of time in an area ... if you could just open up a new office down the street all the patients you transferred would just walk back in your door -- and the guy who bought your business would be left with nothing). A non-compete is saying you can't work for someone else after a contract is over. The CFO had a contract for a fi

      • Most people have never seen a legit enforceable non-compete, at the lay person level and slightly above, so let me share parts of one that I had. ( all these pointy hair bosses make up laws as they go along, I had my contract negotiated on my behalf using a head hunter and a lawyer )

        A) a specific time of employment, in my case, meaning the contract was valid for 1 year and 6 month and 1 day. after that the firm who hired my services had to come back to the table to renegotiate.
        A1) After 1.6.1 I was free to

        • I hope you understood those restrictions and charged accordingly. How much to not be able to work on the east coast for 12 months? I would think at least one year salary+benefits.

          • I might have written it incorrectly or might be a misinterpretation.
            The nearest not owned or controlled by the region ( company ownership ) clause after 1.6.1 was Atlanta, or Chicago or Texas.

            I negotiated fairly and at the time, in this very specific small niche, I was one of the only few ( 24 people I knew of ) in the world that could do it.
            this was just before /. came around. I was paid well for that services. sadly my niche died because someone figured out how to code it to be as
            fast as we all were.

            In fa

  • Business as usual...

  • When you hire someone that has a contract, it is usually a violation of that contract and often triggers certain punative clause.

    But that is NOT breaking the law and the company that does it has done nothing 'illegal' and can not be punished. The employer that was poached has not broken a law, they have broken a contract.

    These are not criminals, they are merely people failing to fulfill a contract, and they may be sued. If they do not fulfill the judgement of the court, that may be a tort, not a crime, bu

    • It's totally against the law to urge you to break your contract. There are some exceptions, like to try to get you to leave my competitor's plan for mine as a customer. But it's totally illegal for me to go to your landlord and offer him cash to break your lease and kick you out just because I don't like you.

      • Not sure what you said would be illegal. However, is it illegal for an apartment owner to offer someone a lower rent and 'entice' them to break their current lease?

        • Price competition to customers is completely excluded.

          The more textbook case is if I contract with you to supply 100 coconuts at $10 a piece. We sign a contract. Then my friend tells me I should have gotten $15 a piece. So I insist that you pay me what I should have gotten. My friend is then civilly liable to you for $500 plus punitive damages.

      • Re: (Score:1)

        by rtb61 ( 674572 )

        It is not illegal to break a contract, it is against the contract and the contract itself is established under contract law. The law covers principles of contract and does not force adherence to contract. You are fully and legally entitled to break any contract you choose, unless those activities are covered by criminal law but typical business contracts are just that, an agreement between parties that you can legally break but you will pay penalties to the other party for the economic damages caused by bre

    • Re: (Score:2)

      by Xenx ( 2211586 )
      There are laws around poaching, which at least potentially they could have run afoul of. It could be considered tortious interference.

      • ah so this has nothing to do with actual 'law' https://en.wikipedia.org/wiki/... [wikipedia.org] as in something on the books. it is 'legal precedent'.
        There really needs to be a law against tort in general. However, is there actually any laws passed by the elected representatives about this kind of thing. I'm guessing they are very poor laws that should be removed from the books if they support this kind of 'precedent'.

        • Re: (Score:2)

          by Xenx ( 2211586 )
          From what I read, there are actual laws. It said states in general but mentioned California which, out of all the states, would be the one I expect it from. It did mention that the act, in of itself, of poaching wasn't against the law. Only under specific conditions would it be against the law. I didn't see any specific examples, however.

    • I 'would' totally agree BUT that _is not_ what the article says. It says the future employer is being sued for breaking the 'law'.

    • Your other responder articulated it well, but I'll give you the actual links. Here's a good summary: https://www.businessjustice.co... [businessjustice.com]

      The wording of the statements by Activision Blizzard, as well as Fox and Viacom before, is highly specific; they're using the term "Tortious Interference". They're making a claim that

      1) they had an executive contract with these people that included a fixed term of employment. Executive contracts can supersede California's at-will rules; for example an executive migh

      • Re: (Score:2)

        by Kaenneth ( 82978 )

        No.

        The conduct must be “independently wrongful apart from the interference itself.” like slander, threats, etc. Offering someone a job is NOT wrongful.

        • .... Unless they signed a contract agreeing to work for a period of time in exchange for other benefits, like high compensation.

          California is at-will, meaning you can be terminated or can leave for no cause whatsoever and with no notice. In practice, companies keep records to ensure that no lawsuit is filed. However, there are exceptions to at-will employment. Unionized employees that are a party to collective bargaining have a specific carve out. So do highly compensated executives; executive contr

    • Kind of a confusion in how we use language. We think of illegal as something that'll send you to jail, but really that's confusing the consequence with the action. Contract/tort law is a civil wrong which results in the party committing it having a legal liablity. Criminal wrongs result in the state punishing you. IMO both are "illegal" they end up getting you punished, just one's considered a punishment and the other just creating a liability (ie pay for the damages caused).Meh.

      • Sorry did the same confusion: illegal because they are wrongs, regardless of what the punishment ends up being. Government could just pass a law saying they'll start whipping people that break an employment contract. The cause of action remains the same, just the consequence different.

  • This is confusing (Score:3)

    by Krishnoid ( 984597 ) on Friday December 04, 2020 @04:13PM (#60795352) Journal

    The actual filing [documentcloud.org] is here, and it complains about "Intentional Interference with Contract" and "Unfair Competition". IANAL, and it's presumably enforceable since Netflix did this before and got slapped down, but I'm really fuzzy about the legal basis of this.

    • and it's presumably enforceable since Netflix did this before and got slapped down,

      I would wait for the appeals to finish before making the claim that the contracts are enforceable.

    • If you are a business and have a contract, I cannot as a third party pay the opposing party in your contract to break it, harming you, to benefit myself. This actually happened in PG&E vs. Bear Stearns, where Bear Stearns acting as an investment bank intentionally paid the Placar County Water Agency to conduct a study that a long-term (40 year contract) to sell power at a particular rate to PG&E was under-market, and offered to find a way to change the existing contract to the benefit of Placar Cou

      • Can't wait until we are all reclassified as executives to further erode our few remaining rights as employees.

        • I can appreciate the pessimism, but these contracts are voluntary. You don't have to sign them even if you are an executive, but it's how executives get certain perks and specifically things that are difficult to quantify, such as equity compensation. You sign for equity comp up front, not knowing it's value in the future, and it usually is vested based on the company meeting certain milestones. That's the key way execs get highly compensated, and in return you sign away the right to change employment, b

      • If you are a business and have a contract, I cannot as a third party pay the opposing party in your contract to break it, harming you, to benefit myself.

        Why didn't the contract have a penalty clause that makes the business whole if the employee decides to break the contract?

        • Your question is the kind of question that an inexperienced lawyer would ask; why would you not write a contract that covers all possible eventualities and penalties if something happens?

          The answer is because it doesn't have to. Employment is covered by Common Law, the basis of the entire US legal system. Besides, you can't predict every situation possible, so you don't lock in some sort of reported damages because you've effectively set a fixed price on an undetermined amount of damage an employee ca

          • My employer achieves the same result with stock grants: if you leave the company early, you forfeit your unvested shares. I guess for whatever reason, Activision Blizzard chose not to do this.

            • Again, no. that's not the issue. The employee certainly forfeit his unvested shares.

              The issue at hand is Netflix induced the employee to break his contract, and likely compensated him for any forfeiture to lure him away. That part is illegal. The employee is just the ball in play here; the issue is between Activision and Netflix.

  • Comment removed based on user account deletion

    • Who wants to bet that large corporations has a hand in the writing of these laws, as they do with many labour laws. And who wants to bet that they benefit from these laws. And who wants to bet that employees benefit less.

      I dunno, this is California.

      Ask those cigar chomping caricature capitalists who, er, run California ...

  • The suit notes that Netflix has been making forays into the video game market since 2017, making it a direct competitor with Activision. I cannot tell you how many times I've fired up Netflix and thought oh boy can not wait to get gaming!

    • The suit notes that Netflix has been making forays into the video game market since 2017, making it a direct competitor with Activision.
      I cannot tell you how many times I've fired up Netflix and thought oh boy can not wait to get gaming!

      the only thing close to a game they have would be Black Mirror Bandersnatch which is a multi path movie thing.

  • The rhinoceros is an amazing creature, that anyone would .. wait what is this story about?

  • If I remember correctly, Google, Facebook, Apple and some others had to pay nine digit fines because they had anti-poaching agreements. So now poaching is illegal, and not poaching is also illegal? Wow.

    • If I remember correctly, Google, Facebook, Apple and some others had to pay nine digit fines because they had anti-poaching agreements. So now poaching is illegal, and not poaching is also illegal? Wow.

      so are there any laws covering laws the obligate you to break the law?

  • Anti Poaching (Score:5, Insightful)

    by cygnusvis ( 6168614 ) on Friday December 04, 2020 @07:27PM (#60795948)
    AntiPoaching legislation is slavery

    • Corps are always breaking contracts when they make more $ than the violation costs them...(law or contract) because often they pay less then the expected penalty, if not a tiny fraction; recovered in months of ill gotten profits. Or they can fold the biz and reform under another name...etc.

      Too bad humans can't pull the same tactics... I thought corps were people?

      Maybe we should make it easy for people to become corporations.... I suppose then corporations would refuse to hire an employee insisting they be

  • âEmployee poachingâ(TM) sounds like an illicit animal hunt. The simple act of asking whether employee poaching is ethical reveals how deep into our psyches we let the animal metaphor creep. Unlike animals, people can make choices and cannot be owned. Given this fact, employee poaching isnâ(TM)t an ethical dilemma. Itâ(TM)s a misplaced metaphor.

    Unlike elephants, employees arenâ(TM)t an endangered species who can be unfairly captured. And unlike cattle, employees donâ(TM)t belong

  • It wasn't too long ago that Apple, Google, and a few others were slapped down... to the tune of just shy of half a billion, IIRC... over having and honoring no-poaching agreements; which are supposedly verboten in California. Now, suddenly, they're A-OK and Netflix is getting penalized for the opposite behavior??? Something stinks here. And I wouldn't be too shy about wagering that stink is Activision... possibly with an assist from some of the anti-Silicon-Valley Hollywood types who've been on the warpa

  • Companies don't own people.
    Netflix did not have a contract with Activision. No agreement was broken.

    If anyone broke a contract, it's the employee.

    Activision should be suing the employee, but there are probably laws that forbid that.

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