Netflix may have taken a pounding last month in its ongoing fight with now Disney-owned Fox over the alleged poaching of two executives, but the streamer has come out swinging to keep key contracts with top-tier talent out of the legal ring and public eye.
“This litigation concerns the interference with and enforceability of Fox’s exclusive employment agreements with its business executives that contain a specified term,” the Reed Hastings-run company said in an objection filed last week (read it here) and made pubic late yesterday. “It does not concern Netflix contracts at all, and it certainly does not concern Netflix’s (or any company’s) ‘above-the-line’ talent agreements.”
“Netflix’s above-the-line talent agreements are not even remotely similar to Fox’s agreements,” the home of Stranger Things. The Crown and more states.
“They are not employment agreements, they do not require the individuals to work exclusively for Netflix, they involve “above-the-line” talent (actors) (who are treated differently than standard employees under the law), and they involve entities that are not parties to this case,” adds the filing in the parallel arbitration over discovery and documents related to the suits, which involve the hiring of now Netflix promotions and drama programming development bigwigs Marco Waltenberg and Tara Flynn. “Indeed, the Court has already issued orders finding that such ‘above-the-line’ talent agreements ‘have no bearing’ on the issues in this case,” added the slightly redacted 12-page referee report objection filed July 18 by Karen Johnson-McKewan of Netflix’s outside counsel Orrick, Harrington & Sutcliffe LLP.
With that famed Olivia de Havilland-inspired law that restricts personal service contracts in California for lasting more than seven years, the funny thing about this slice of the larger Netflix and Fox suits is how shrouded all this contract material is set to be in the larger suit. Hollywood being what it is, and corporate shields being what they are, the fact is few morsels of renewal or other information would make it unredacted on to the docket no matter which way Los Angeles Superior Court Judge Marc Gross decides to go with this.
What also adds to the giggle factor is the calendar and math. As it has in the past, Netflix insists in this latest filings that it couldn’t have broken the seven-year rule with any non-exclusive talent deals because “it did not enter into talent contracts until around 2015 (four years ago) when it started creating its own content.”
Fox had no comment on the latest filings when contacted by Deadline.
Battling a similar exec poaching lawsuit from Viacom on another front, the sharp elbowed Netflix, which has lost billions in value the past few days on the stock market because of disappointing subscriber growth last quarter, points out to its Fox foes and everyone else again that “Netflix does not have any fixed-term employment agreements and none of its talent agreements have resulted in anyone being subject to a contract for more than seven years.”
“Netflix respectfully objects to the Referee’s finding of relevance and his finding of responsiveness, and requests that the Court modify the order to deny Fox’s motion,” the streamer declared last week of the portion of the matter that has played out the past two years behind closed doors and they want an open hearing in open court to keep deals with the likes of the blockbuster series Stranger Things cast and others kept out of the whole thing. “The case does not concern Netflix’s agreements or any other kinds of Fox agreements,” the latest set of filings asserts, keeping things about execs and the binding nature (or not) of their deals .
“Netflix does not claim that anyone has interfered with any of its agreements,” the streamer says of this whole legal dust-up that started back in September 2016 when Fox claimed Netflix had illegally snagged executives Waltenberg and Flynn “Fox does not claim that Netflix has somehow induced Fox’s above-the-line talent (actors, directors, producers, etc.) to breach their talent agreements,” Netflix throws in there, calling the seven-year contract theory that Fox is pushing “tenuous” at best.
After Fox filed the suit in September 2016, Netflix filed a fast counter-suit that flipped the script to allege that Fox was actually engaging in unlawful and anti-competitive business practices. Pulling California law and policy into the spotlight, plus that de Havilland precedent, the streamer argued that Fox tied its staff into restrictive fixed-term employment agreements that actively limit job mobility.
They were agreements prospective employer Netflix considered invalid, which if true would force a yet unrealized major change in the way employee contracts in the Golden State are managed. A flood of filings and hearings followed, along with a visit to a California Court of Appeal that didn’t work out so well for Fox. There was, of course, a change of some ownership on the Fox TV studio side with Disney hoovering up much of the assets, and this now becoming Bob Iger’s problem. Then, after dueling summary judgment filings this winter, there was the promise from Fox that they would only seek $1 in damages if they won the whole thing, followed by Gross’ ruling on June 5 that Netflix were streaming up the wrong tree with their seven-year rule argument that it was Fox acting illegally.
The next move is that public hearing Netflix wants. Even with the guts of the streamer’s case on the floor, this all still looking to go to trial next year.