COPY Pa ear COMPERINIE Serer eee rere} DANIEL M. PETROCELLI ($.B. #97802) dpetocelli@omm.com ‘MOLLY M. LENS (SB. #283867) smlent@omm.com J HARDY EHLERS (S.B. #287528) jehlers@omm.com O'MELVENY & MYERS LLP 1999 Avenue ofthe Stars Los Angeles, California 90067-6035 Telephone: ' (310) $53-6700 Facsimile: (310) 246-6779 tomoys for Pints Twentieth Century Fox Fim (Corporation and Fox 21, Ine. ns a \JUDOE GERALD ROSEN! SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES, WEST DISTRICT “TWENTIETH CENTURY FOX FILM Case No CORPORATION, a Delaware Corporstion, and $0126423 FOX21, INC, a Delaware Corporation, COMPLAINT FOR: Paints, ( INDUCING BREACH OF CONTRACT (WALTENBERG is AGREEMENT); NETFLIX, INC, a Delaware Corporation, ©) INDUCING BREACH OF CONTRACT (FLYNN Defendant. AGREEMENT); AND @ UNFAIR COMPETITION DEMAND FOR JURY TRIAL10 u 2 8 “ 1s 16 0 18 9 20 a 2 23 2% 2s 26 n 28 Plaintiffs Twentieth Century Fox Film Corporation (*TCFFC”) and Fox 21, Ine. “Fox”) for their complaint against defendant Netflix, Ine. ("Netflix"), (Fox 21") (collectively, allege on knowledge as to themselves and their ovn ects, and on information and belief a to all other matters, as follows: or acti 1, Netflix is engaged ina brazen campaign to unlawfully target, recruit, and poach ‘valuable Fox executives by illegally inducing thers to break ther employment conrets with Fox to work at Netflix, This actions necessary to entarce Fons rights to hol Netflix ibe for its ‘wrongful conduct, and to prevent Netflix Srom continuing such illegal conduct, PARTIES 2. TCFFCisa corporation organized and existing under the laws of Delawere, having its principal place of business at 10201 West Pico Boulevard, Los Angeles, Californie 90064 TTCFFCis afl studio and distributor. 3. Fox 21 isa corporation orgenized and existing under the laws of Deleware, having ts principal place of business at 10201 West Peo Boulevard, Los Angels, California 90064, Fox 21 isa television production suo 4. Netdlin isa Delaware corporation ding busines inthe County of Los Angeles, State of California. Netix is an internet-based tevision and film producer and subscription JURISDICTION AND VENUE 5. This action arises under the laws ofthe State of California and is within the subject ‘mater jwisdtion ofthis Court, 6. A substantial prof the events giving rise to Fox's causes of action as alleged herein occured in Los Angeles County, California, and bas adie effect on Fox in Los Angeles ‘County, Califia. The ations causing injury to Fox as alleged herein, even if itisted outside of California, were expressly aimed at California, with knowledge that they would eauee harm in UBUOUBREER- 7 USN TBR USEES RS SEESEEEEESEEUEEEEEEE]24 2s 26 n 28 EEE EECHEE CEH Eo COMORES ere cece California, Further, Netflix is subjetto the personal jurisiction ofthis Cout because it conducts business in and/or isa resident of Califia, 7, Pursuant o California Code of Civil Procedure seein 395 et eg and LR, 2.3(@)(1)@), vem is proper inthe Superior Court ofthe State of California in and forthe County of Los Angeles, West District, beease the contrasts a sue were interfered with inthe County of Los Angeles, State of California and because Fox was harmed a its principal place of businesin ‘he Coumy of Los Angeles, State of Califor. GENERAL ALLEGATIONS Tem Emplowment Ei 8 Asan integral pat of ts employment practices, Fox negotiates and enters into ‘written employment agreements fr a specified term with certain ofits executives (“Fixed-Term. [Employment Agreements"). Pursuant to its Fixed-Term Employment Agreements, Fox obtains the exclusive services of the employee for specified term of years. 9. Asalleged herein, Netflix is engaged in an unlawful campaign to induce Fox: ‘employees to breach ther Fixed-Term Employment Agreements by soliciting, reerating, ‘encouraging, and inducing such Fox employees to terminate their employment with Fox before the expiration oftheir Fixed-Term Employment Agreements, ‘The Waltenberg Agreement 10. ‘TCFFC and Marcos Waltenverg entered into a Fixed-Term Employment ‘Agreement, effective as of December 9, 2014 (the “Walterberg Agreement”). Under the Waltenberg Agreement, Fox agreed to employ Waltenberg for an intial term of two years, ‘commencing January 1, 2015 and ending December 31, 2016. The Waltenberg Agreement ‘ranted Fox the right to extend this term for en additional two-year period, commencing January 1, 2017 and ending December 31,2018, 11, Pursuant tothe Waltenberg Agrosment, Waltenberg agreed to serve as Vice President, Promotions, and to work in tis capacity fulltime during the specified term. 22.‘The Flynn Agreement 12, Fox 21 and Flynn entered into a Fixed-Term Employment Agreement (the “Flynn Agreement”), effective a of November 19,2013. Under the Flyan Agreement, Fox agreed to ‘employ Flynn for an inital term of two years, commencing November 19, 2013 and ending November 18, 2015. The Flynn Agreement granted Fox the right to extend this term for an ditional two-year period, commencing November 19, 2015 and ending November 18,2017, ‘On or about July 31, 2015, Fox exercise its right to extend the term ofthe Flyan Agreement until Noverber 18, 2017. 13, Fox 21 and Flynn subsequently agreed to amend the Flynn Agreement, effective as cof November 19, 2015. Pursuant to this amendment, in exchange for increased compensation, Flynn agreed to provide Fox the right to extend the term for an additional two-year period, ‘commencing November 19, 2017 and ending November 18, 2019. 14, Pursuant o the Flynn Agreement, Flynn agreed to serve as Executive Director, (Creative, and then Vice President, Creative, and to work in tis capacity fulltime during the specified term, ‘Netflix Intentionally nterferes with the Weltenberg Agreement 15. Inor around the summer and fll of 2015, Netflix became aware of the Waltenberg Agreement and induced Weltenberg to breach it 16, Asaresult of Netlx’s inducement, in November 2015, Waltenberg breached the ‘Waltenberg Agreement when he informed TCFFC that he intended to leave, and thereafter did leave, TCFFC for Netix, 17. After learning that Waltenberg intended to join Netflix in breach ofthe Waltenberg Agreement, TCFFC reminded Netflix of the Waltenberg Agreement with TCFFC and ‘demanded that Netflix refain from further interfering with the Weltenberg Agreement. 18, Netflix refused and further interfered with the Waltenberg Agreement by employing Waltenberg,10 u R b 4 15 16 ” 8 19 20 2 2 4 2s 26 a 28 Netflix Iatentionally interferes with the Flvoa Agreement 19, In oraround the summer of 2016, Netflix became aware ofthe Fiyan Agreement and induced Flyan to breach 20. As aresult of Netin’s inducement, in August 2016, Flyan breached the Flynn ‘Agreement when she informed Fox 21 that she intended to leave, and thereafter did leave, Fox 21 for Netix 21, After leamingthat Flynn intended to join Netflix in breach ofthe Flynn ‘Agreement, Fox 21 reminded Netflix of the lynn Agreement with Fox 21 and demanded that [Netflix refiain from further interfering withthe Flynn Agreement. 22, ‘Netflix refusec and further interfered withthe Flynn Agreement by employing Flynn, FIRST CAUSE OF ACTION (nducing Breach of the Waltenberg Agreement) 23. TCFFC realleges and incomporates herein by reference each and every allegation contained in paragraphs 1 through 22, inclusive, hereinabove, 24, TCFFC and Waltenberg entered into the Waltenberg Agreement, effective as of December 9, 2014 25. As amatetil endition to his employment with TCFEC, Waltenberg agreed to perform his duties as a TCFFC executive through at least December 31, 2016, 26. Netflix knew sbout the Waltenberg Agreement, including that Weltenberg had agreed to work with TCFFC fora specified tem that had not yet expired, during its recruitment and solicitation of Waltenberg 27. Netflix commited intentional acts designed to induce Weltenbergto breach the Waltenberg Agreement by nonetheless offering Waltenberg employment, recruiting and soliciting ‘Waltenberg, hiring Waltenberg, and indemnifying Waltenber, for claims arising ftom his breach of the Waltenberg Agreement.10 u 2 B “ 15 16 n 19 a 2 23 Ea 25 26 2 28 28, As aresultof Net's tortious interference, Waltenberg materially breached the Wialtenberg Agreement in January 2016 by ending his employment with TCFFC and fling to perform his ties through the agreed-upon tem, TCEFC performed all conditions, covenants, and promises required tobe performed by it under the Welteserg Agreement, except fr those conditions covenants, and promises that were excused by reason of Waltenbeg's material breach slleged herein. 29, Asadirect and proximate result of Netflix’ interference, Fox has been damaged ina sum according to proof at the time of ral 30. Netix conducted its interference with fraud, malice, and oppression and in wif sand conscious disregard of TCFFC's rights under its Fixed-Term Employment Agreements, including the Waltenborg Agreement, eating Fox to punitive damages. 31. Netflix threatens to, and ules restuined willontinue to interfere with TCFFC's Fixed-Tenm Employment Contracts, to TCFFC's great and inepasble injury, fo which damages ‘would no afford adequate rele, in that they would not completely compenste forthe loss of ‘TOFFC's ability to contract fora stable workforce, forthe disruption to TCFFC’s comport planning, an for the injury to TCFFC's busines reputation and goodwill SECOND CAUSE OF ACTION (ducing Breach ofthe Flynn Agreement) 32, Fox 21 vealleges and incorporates herein by reference each and every allegation contained in paragraphs | through 31, inclusive, hereinabove 3, Fox21 and Flynn entered into the Flynn Agreement, effective as of November 19, 2013. As emateral condition to her employment with Fox 21 Flynn agreed to perform her ‘duties as aFox 21 executive through an initil term ending November 19,2015, and, at Fox 21°s lection, an aditional two-year period ening November 18,2017, On or about July 31,2013, Fox 2 exercised its right to extend the term ofthe Flysn Agreement through November 18, 2017, 25 IEEE GE EGCG EGE Ho MAREE p reece eee eee25 2% 2 28 34, Fox 2 and Fiyan subsequeally agreed to amend the Flyan Agreement effective ‘November 19,2015, Pursuant to this amendment, in exchenge for increased compensation, Flyin sgred to provide Fox 21 the right to extend the term for en adtionel two-year period commencing November 19, 2017 and ending Noverber 18,2019. 38, Netflix knew about the Flynn Agreement, acing tht Flynn had aged to work ‘ith Fox for a pected term that had not yet expited, during its recruitment and slistation of Pym. 536. Netflix committed ntentionel acts designed to induce Flynn to breach he Fina “Agreement by noneteles offering Fiyun employment, recruiting and soliciting Fyne, hiring "Flynn, and indemnifyng yan for claims arising from breach of thé Flyan Agree 37, As aresult of Netfx’s tortious interference, Flyan materially breached the Flyan Agreement in August 2016 by ending her employment wih Fox 21 and fling to pesto ber utes trough th agreed-upon tem. Fox 21 performed all onions, covenants, and promises required to be performed by it under the Flyan Agreement, excep for those conitons, covenans, and promises that were excused by reason of Fan's material breach allegd herein 38. Asa direct and proximate result of Netflix’ interference, Fox 2 hasbeen sum according to proof atthe time of il. 38, Nellis conducted is interference with aud, malice and oppression a in a Wilf ond conscious disregard of Fox 21's ighs under its Fixed-Team Employment ‘Agreements including the Flyan Agreement, entitling Fox 21 to punitive damages. 40. Netix threaten to and ules restrained, wil continue to interfere with Fox 21's Fixed-Term Employment Agreements, to Fox 2"s grat and irreparable injury, fr which damages would not afford adequate elif, in that they would not completely compensite forthe Joss of Fox 21's ability to contrat for a stable workfore, for the disruption to Fox 21's corporate planning, an for the injury to Fox 91"¢ siness reputation and goodwill teu COMPLAINT‘TRIRD CAUSE OF ACTION lation of Business and Professions Code §§ 17200 et sey.) (Unfair Competition in Vi 41. Fox realleges and incomporates herein by reference each and every allegation ccontsined in paragraphs 1 through 40, inclusive, hereinabove, 42. By the acts alleged above, Netflix has committed business acts and practices that sre unlawful and unfair in violation of California Unfsir Competition Law (“UCL”), Cal. Bus, & Prof. Code §§ 17200 et. seg 43. Netflix's intentional interference with Fox's Fixed-Term Employment Agreements is a busines act or practice. Intentional interference with contrect is a tortious violation of duties imposed by law. Netix has unlawfully competed with Fox by soliciting, reeuiting, and inducing Fox employees to breach their Fixed Tem Employment Agreements with Fox, with full knowleige of those employees’ existing contractual obligations to remain employed with Fox: through a specified contractual term. 44, As adirect and proximate result of Netdlix’s conduct, Fox has suffered great and lnreparable harm, including loss of Fox's ability to contrat fora stable workfree, forthe disruption to Fox’s corporate planning, and forthe injury to Fox's business reputation and odwill 45. Unless and until Netflix is restrained from the actions described herein, Fox will continue to suffer grest and ireparable harm for which money damages would bean inadequate remedy. An injunction is necessary to abate Netfic’s continuing threat of unlawfilly interfering with Fox's Fixed-Term Employment Agreements. Fox is therefore entitled to injunctive relief ‘against Netix restraining i fom further interfering with any of Fox's Fixed-Teem Employment Agreements2 B 4 1s 6 ” 8 » 2 2 B 4 2s 26 n 28 attomeys, successors and assigns, and all persons, 3. Punitive and/or statutory damages: 4. For such other reliefs the Court de Dated: September 16,2016 PRAYER FOR RELIEF WHEREFORE, Fox prays for judgment against Netix as follows 1, Fora permanent injunction enjoining Netflix, and its agents, servants, employees, firms and corporations acting in concert with it, from interfering with any of Fox's Fixed-Term Employment Agreemens; 2. Compensatory damages in an amount tobe proven a tril; jeems just and equitable, DANIEL M, PETROCELLI ‘MOLLY M. LENS I. HARDY EHLERS, O'MELYENCS MYERS, By: Daniel Perooeli Attomeys for Paints ‘Twentieth Century Fex Film Corporation and Fox 21, Inc.