Between game publisher Activision-Blizzard and streaming provider Netflix, a dispute has arisen. Activision accuses Netflix of having poached its CFO in 2018, despite an existing contract, causing significant damage.
What happened? Spencer Neuman was CFO at the publisher Activision-Blizzard. His contract ran until April 30, 2020. However, on December 31, 2018, he resigned from his position, only to appear two days later as the CFO of the streaming provider Netflix. Neuman still holds this position.
At that time, Activision Blizzard did not comment on the departure of the CFO. It was only stated that the departure had nothing to do with the company’s financial report.
But now it appears that Activision Blizzard is not satisfied with how Neuman’s departure transpired two years ago, and has since filed a lawsuit.
Netflix allegedly poached CFO unlawfully
What is the core of the lawsuit? According to the law of the state of California (via leginfo) a fixed-term employment contract cannot be broken without valid reasons. Since Neuman still had 2 years left on his contract, the move to Netflix would not have been legal.
In the indictment (via Deadline) from the publisher, it is also stated:
Netflix recruits talent without regard for ethical and legal obligations. To shape the workforce to its own liking, Netflix not only recklessly lays off its own employees, which it considers “appropriate,” but also conducts a years-long campaign of unlawful poaching of executives from Netflix’s competitors, regardless of their contractual obligations. Netflix deliberately disregards established California laws, including California labor law itself, which explicitly recognizes and allows the enforcement of fixed-term employment contracts.
Furthermore, Netflix is also alleged to have recently negotiated a sensitive deal with Neuman’s assistance:
Compounding the situation, Netflix was involved in tortious conduct when Activision – with Neuman’s support – negotiated a commercial partnership with Netflix for the distribution of Activision’s linear media content. Netflix then induced Neuman to violate his fiduciary duties to Activision, thereby gaining another unfair and unethical advantage over Activision, one of Netflix’s competitors.
All these actions allegedly caused significant damage to Activision. Therefore, Activision is now demanding that:
- Netflix must not poach any people from Activision who have existing contracts
- Netflix must pay damages to Activision
Similar lawsuits against Netflix had already come from Fox. It was stated that in the end, Netflix could not poach employees from Fox anymore (via Deadline).
Curiously, Neuman’s switch roughly coincides with the time when a Diablo TV series for Netflix was first announced. Diablo is firmly part of Activision-Blizzard’s franchises. However, since there have been signs of life from the series again, it is unlikely that its release will be hindered by the legal dispute between Activision Blizzard and Netflix.
