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Activision is suing Netflix for poaching its chief financial officer

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In January 2019, Activision-Blizzard terminated the contract of its chief financial officer, Spencer Neumann. Activision didn’t say why Neumann was fired, only that it was a “cause unrelated to the Company’s financial reporting or disclosure controls and procedures.” A Reuters report at the time, however, said that it was because Neumann was jumping ship to Netflix.

Two years later, we have confirmation that this is in fact what happened, because Activision is now suing Netflix for poaching its former executive. The lawsuit, available via The Hollywood Reporter, says Netflix “knowingly induced Neumann to breach his employment contract with Activision,” and worse, “engaged in tortious conduct when Activision—with Neumann’s assistance—was negotiating with Netflix over a commercial partnership to distribute Activision’s linear media content.”

The suit says Activision hired Neumann as CFO in May 2017 for a term of three years, with an optional one-year extension. In exchange for “substantial compensation,” Neumann agreed to various contractual obligations that committed him, in a very general sense, to do his best for Activision and not take advantage of his position for his own personal gain.

That commitment was short-lived. After Netflix “deliberately and maliciously” worked to pry Neumann away from Activision—an effort that Netflix co-CEO Reed Hastings was “personally involved” with, according to the complaint, and included an offer to pay for his legal representation and cover any penalties arising from the breach of contract—he jumped ship. Neumann’s contract ran until April 30, 2020, but he resigned from Activision on December 31, 2018; two days later, Netflix announced that he had been appointed as its new CFO.

The lawsuit says that because of Neumann’s sudden departure, it was forced to pay millions of dollars more to his replacement than Neumann himself would have earned. Activision claims it also had to pony up millions more to other executives than they were due to earn in order to keep them from bolting too. Activision wants Netflix to cover those and other costs, and it’s also after punitive damages and an injunction against what it says is “a pattern and practice of unlawfully inducing employees of other competitors to breach their fixed-term contracts.”

“Unless Netflix is restrained by appropriate injunctive relief from continuing to raid Activision’s workforce by targeting its executives who have voluntarily entered into enforceable and ongoing fixed-term employment agreements, Activision will continue to suffer irreparable harm, including, but not limited to, losing the value of its valid fixed-term employment agreements, damage to its business reputation, workforce, and business opportunities, while Defendants will continue to be unjustly enriched by their tortious and unjust conduct,” the suit says.

I’ve reached out to Netflix for comment on the lawsuit and will update if I receive a reply.

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