Sure they got the start of The surgeon’s cut tomorrow, but for a couple of weeks it’s kind of a bite to be Netflix.
The streamer, led by Reed Hastings and Ted Sarandos, was sued by Activision Blizzard on December 4th for allegedly seducing the latter’s CFO in late 2018. Now, in a re-run of the skirmish with Fox, Netflix seems almost safe on Thursday that they are losing their legal aversion to Viacom (now ViacomCBS) for catching Momita Sengupta of the Shari Redstone-controlled company two years ago.
“The Court finds that Viacom’s employment contracts do not contain any illegal non-compete obligations for the simple reason that Netflix did not get its arguments to the point with legal assistance,” said Jon R. Takasugi, LA Supreme Court Justice , today a preliminary decision. “The cases cited by Netflix involve arbitrary employment contracts,” the caveat continues (read here).
“This is fatal for Netflix, since it is undisputed that Viacom employment contracts do not enforce the non-compete clause beyond the contract period,” added Judge Takasugi rather sharply.
Or, to cut a long story short, “Netflix’s motion for a recapitulation is denied. Netflix’s motion to summarize the decision is denied. Viacom’s request for a summary adjustment is granted. “
If Netflix launches a cropper, it’s almost certain they will appeal, like they did in September after losing the long-running Fox case in December 2019.
The then Viacom followed the steamer in October 2018 after hiring Production Management EVP Sengupta as Netflix Vice President of Physical Production for original series – an appearance that it still holds today.
“Netflix was aware that Sengupta was under a fixed-term contract with Viacom,” said the home of Comedy Central in its report submitted to LASC on October 5, 2018. “Despite that fact and disregarding a well-established law that applies to anyone doing business in California, Netflix has been engaged in an illegal trade to illegally induce Sengupta to break her employment contract with Viacom in order to get her can immediately take up a job at Netflix, “it says.
In December 2018, Netflix filed its own filing on the case, essentially recycling Fox’s arguments to label Viacom as an attempt to impede employee mobility. As in the unsuccessful Fox affair, the freewheeling streamer claimed that Sengupta’s dealings with Viacom for over 16 years violated the famous “seven-year rule”.
Netflix and their attorneys at Orrick, Herrington & Sutcliffe were not satisfied with trying to offer a new POV on California labor law, as it did in the Fox case, and also said the non-compete clause in Sengupta’s contract was illegal.
Judge Takasugi had none of it today.
“If Netflix wants to argue that non-compete obligations are illegal in fixed-term contracts that detain employees even after they’ve left the company due to a termination or resignation (i.e., when they’re no longer actually employed by the company), this is it Case must support this claim, ”he wrote tentatively. “Netflix didn’t do this.”
Now there is always the possibility that the LASC judge will change his mind and issue a completely different final decision after the summary court hearing set for December 10th in the DTLA. There’s always a chance someone could come up with a successful cold fusion theory, but that doesn’t seem to be happening anytime soon, if you know what I’m talking about?
Pathological scholarly evidence aside, it seems that Netflix is really suffering legally this week for failing to keep their employed hands to themselves – and lawyers love to delve into that.