Twentieth Century Fox’s injunction against Netflix was upheld by the California Court of Appeal. This injunction precluded Netflix from soliciting Fox employees subject to a fixed-firm contract.
Although California is one of the more restrictive states regarding restricting employees’ mobility, the narrowness of the injunction allowed it to succeed. According to the opinion, Fox used fixed-term employment contracts for certain employees to lock them in, making raising and promotions contingent on signing them. These agreements could be terminated by the employee and employer based on the contract. The Court noted that even after Fox sued, Netflix offered employment to 14 Fox employees subject to these agreements. The Court found the fixed-term agreements enforceable, noting the narrowness of the injunction. The injunction obtained did not require employees to uphold their fixed-term contracts, did not seek to stop the individuals who were already working at Netflix to stop, and did not stop solicitation of at-will or employees at the end of their contract term. This narrowness helped the Court affirm the injunctions issued by the trial court. This case shows that it is critical to correctly frame temporary restraining orders and injunctions. An overly broad TRO or injunction can lead to denial based on the overreaching, while a narrow frame helps not only obtain it, but helps survive appellate review.
If you have a question about this case or injunctions or TRO, contact Michael Haeberle at firstname.lastname@example.org.