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Appeals Court allows Netflix to proceed with lawsuit challenging Fox's employment contracts

The conflict between the two giants in global entertainment industry started back in 2016

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MUMBAI: A California court has finally paved the way for Netflix to take on 20th Century Fox. Cancelling an appeal from Fox, a three-judge panel has allowed the streaming giant to take forward a lawsuit that seeks to invalidate Fox’s fixed-term employment agreements.

The conflict between the two giants in the global entertainment industry started back in 2016. Two executives of the company including Tara Flynn, a former development executive at Fox 21 TV Studios and Marcos Waltenberg, a former Fox film marketing executive left the company in that year.

Fox, infuriated by the incidents, sued Netflix blaming the latter for illegally poaching two of its executives and encouraging to break employment contracts. 

Following the suit, Netflix responded with a counter-suit alleging those deals were unenforceable. It also argued that Fox was compelling employees to stay in the company against their will.

Fox sought to throw out the Netflix countersuit with an anti-SLAAP motion arguing that it concerned protected speech. However, a Los Angeles Superior Court judge rejected the motion. Again, the appeal court judges upheld the ruling. After the decision, the initial suit and the counter-suit will now proceed at the trial court level.

“The acts that supply the elements of Netflix’s claims are Fox’s alleged business practices of utilizing fixed-term agreements with allegedly unlawful and restrictive clauses and selectively determining which employees will be allowed to terminate those contracts early,” the judges found as per media reports.

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