Judge supports Viacom’s injunction request in poaching case against Netflix

Viacom appears to be gaining the upper hand in its fight with Netflix over the streaming giant’s hiring of its executives.

Los Angeles Superior Court Judge Jon Takasugi said in a preliminary judgment on Tuesday that Viacom international was entitled to pursue an injunction barring Netflix from poaching its executives.

“The court has concluded that the Viacom employment agreement was a valid contract as a matter of law,” the judge wrote in advance of a hearing Thursday. “The Court concludes that Viacom has standing to pursue this action (...) and that it is entitled to a permanent injunction.”

Viacom declined to comment.

Netflix said it disagreed with the ruling.

“We’ll share the legal and factual bases of our position at Thursday’s hearing, and will continue to fight for the basic right of employees to choose to leave their job to take another,” Netflix spokesman Jonathan Bing said in an email.

The case is one of three that the Los Gatos, Calif.-based streaming company has been waging over its hiring of entertainment industry executives. Netflix has been wooing not only creative talent in recent years, as it beefed up its film and TV studio, but also executives. As the streaming wars heat up, with an increasing number of companies launching streaming services, so has the demand for talented corporate figures to run operations.

Netflix recruited Viacom executive vice president Momita SenGupta, a Viacom employee from 1995 until 2018, two years before her contract was due to expire. That prompted Paramount Pictures owner Viacom, which recently combined with CBS, to sue Netflix in October 2018. Viacom said in its complaint it would suffer “irreparable harm” if Netflix was allowed to continue “raiding” its workforce.

Netflix faces two other legal battles on similar issues. Walt Disney-owned 21st Century Fox won a case last year after Netflix hired some of its executives under contract; Netflix is appealing that judgment. Activision Blizzard earlier this week also sued Netflix. The Santa Monica-based entertainment company alleged Netflix poached chief financial officer Spencer Neumann.

Activision is requesting in its lawsuit that an injunction be placed on Netflix barring the company from recruiting its employees who are on fixed-term agreements and that Netflix pay damages.

In December, an L.A. court barred Netflix from poaching rival Fox executives under contract, or inducing them to breach their fixed-term agreements. The streaming giant had approached 16 Fox employees under contract with offers in some cases to double their salaries and offering to protect them from any legal ramifications for walking out on their employment contracts.

Netflix appealed that decision in September. It said employees were being kept in jobs they no longer wanted and paid below market rate.