Netflix has responded to Viacom’s lawsuit claiming the streaming service poached a senior executive (a case mirroring a separate dust-up with Fox), saying the employment contract it allegedly breached is illegal and unenforceable.
Viacom’s suit asserted that Netflix violated the contract of Momita Sengupta when the company hired her as VP of physical production for original series. In a court filing today (read it HERE), Netflix attorneys counter that Viacom knowingly retained Sengupta with a contract that did not comply with California law, rendering the suit “meritless.”
The parent company of MTV, Nickelodeon and Comedy Central is trying to “stymie employee mobility” with its actions, Netflix said in the filing. “Viacom must know that Ms. Sengupta’s employment agreement is illegal and unenforceable because it did not attach it or any of her prior fixed-term employment agreements to the complaint,” the filing states.
Netflix pointed to two key elements of its rebuttal — first, that Sengupta has been employed at Viacom for 16 years when all of her contracts were added up. California law caps such consecutive agreements at seven years. Second, Netflix says the non-compete clause in her contract is unlawful. California has “strong public policy that recognizes both the rights of employees like Ms. Sengupta to pursue employment opportunities of their choice and those of employers to compete for and hire from a broad pool of employee talent.”
The so-called “seven-year rule” generally applies to talent and stems from actress Olivia de Haviland’s successful legal challenge to the restrictive contracts that prevailed during the old Hollywood studio system. It has increasingly been more broadly applied to other employees, including at talent agencies.
Viacom issued a statement responding to the assertions in Netflix’s filing.
“We continue to believe the employment contracts we use are valid under California law, and that other companies may not induce employees to break them,” the company said. “We think Netflix should be required to play by the same rules as every other company doing business in California, and we are taking the steps necessary to ensure they do. Nothing in their response changes that view.”
The suits were filed in L.A. Superior Court, with Judge Richard Rico assigned to the case.
The Netflix-Fox battle, which began with dueling lawsuits in 2016, is scheduled to go to trial next summer.