Non-Compete? Chained to a FOX by Contract (September 2015)
Netflix counter-claims against Fox after Netflix was accused in a civil complaint of employee raiding, i.e. “poaching”. Netflix says, “Through its widespread use of unlawful restrictive fixed-term employment agreements, Fox is facilitating and enforcing a system that restrains employee mobility, depresses compensation levels, and creates unlawful barriers to entry for Netflix and others competing in the film and television production business.” Netflix accuses Fox of violating of California Business and Professions Code Section 16600, our State’s prohibition of the use of non competes by using fixed duration employment contracts.
The irony here is the enormous cultural investment companies make in maintaining the ‘at will” status of their workforces, even executive contracts often have an “at will” termination clause. Yet, when circumstances change and it’s a buyers market for hi value career professionals, a level playing field where the employer doesn’t have the leverage to dictate loyalty, then what this company says it wants is fixed duration EMPLOYMENT CONTRACTS.
Is this an illegal non compete tactic, forcing employees to sign annual contracts? Wow, it will be interesting to see where the LA Superior Court goes with this one.