Netflix Sued Again for Poaching — This Time by Activision Blizzard
Netflix is the target of yet another employee-poaching lawsuit.
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.
Neumann signed a three-year deal to work as Activision’s CFO in May 2017. The deal also included a one-year option that would have extended him through April 2021.
The suit alleges that Netflix courted Neumann in the fall of 2018, while the two companies were engaged in negotiations on a distribution deal for Activision’s linear content.
According to Activision, Netflix co-CEO Reed Hastings was actively involved in the effort to bring Neumann on board. Neumann joined Netflix as CFO in January 2019.
At the time, Activision told investors that Neumann had been “terminated for cause for violating his legal obligations to the company,” indicating that he had violated his “no shop” clause.
Before joining Activision, Neumann had worked as CFO and EVP of global guest experience at Disney’s Parks and Resorts division.
The suit alleges intentional interference with contract, unfair competition, and aiding and abetting breach of fiduciary duty. Activision is represented by Daniel Petrocelli and Molly Lens of O’Melveny & Myers, who also represented Fox in its case against Netflix.
In the Fox litigation, Netflix argued that Fox’s employment contracts were unenforceable because they wrongfully locked employees into long-term deals. A judge ruled against Netflix, and ordered the streamer not to poach additional employees. Netflix has appealed.
The Viacom case, which alleges similar interference, is still pending.
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