Dec 4, 2020 - Economy

Activision files lawsuit against Netflix over talent-poaching allegations

Axios visuals

Video game giant Activision Blizzard filed a lawsuit against Netflix in a California court Friday alleging that the entertainment giant broke the law when it hired away Activision's chief financial officer Spencer Neumann last January.

Why it matters: The lawsuit alleges Netflix offered to pay Neumann's legal fees if he broke his contract, painting the portrait of a corporation willing to go to great lengths to poach star talent.

Details: The lawsuit targets Netflix for three alleged actions, according to a copy obtained by Axios:

  1. It asserts that Netflix participated in "intentional interference" of Neumann's contract by offering to pay Neumann in advance to cover his legal fees for breaking his contract with Activision. "Netflix unapologetically recruits talent without regard to its ethical and legal obligations," the lawsuit says.
  2. It alleges unfair competition on Netflix's part in hiring away Neumann because Netflix has spoken publicly about getting into the esports space. "Defendants engaged in this tortious conduct at a time when Netflix was seeking to increase its gaming content to compete with Activision, and Activision was executing on a long-term strategy to expand its linear media content by negotiating with Netflix for distribution of this content, in which Neumann was deeply involved," the lawsuit says.
  3. It accuses Netflix of aiding and abetting Neumann's breach of his fiduciary duty to Activision: "During his employment with Activision, Neumann was the CFO of Activision. As such, Neumann owed fiduciary duties to Activision during the time that he was employed by Activision."

Be smart: Activision Blizzard announced it fired Neumann just hours ahead of his new job being announced with Netflix in January 2019.

  • The attorney representing Activision is acclaimed lawyer Daniel Petrocelli, who defended AT&T against the DOJ's Time Warner merger lawsuit in 2018.

The big picture: Talent disputes happen all the time between big corporations, especially in Silicon Valley. But the lawsuit is notable in that it speaks to Netflix's aggressiveness when it comes to procuring talent, and its ambitions to get into the esports and gaming spaces.

Netflix did not immediately respond to request for comment.

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