Risk & Compliance

Activision Sues Netflix for ‘Poaching’ CFO Neumann

Netflix has a "pattern of caring only about attracting and employing whoever Netflix wants, regardless of whether it violates the law along the way."
Matthew HellerDecember 7, 2020

Activision Blizzard has filed an executive poaching lawsuit against Netflix over its hiring of Spencer Neumann as CFO, alleging it illegally induced him to breach his contract with Activision.

Netflix announced Neumann’s hiring in December 2018 when he was only halfway through the three-year contract he had signed with Activision in May 2017.

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Spencer Neumann

According to the lawsuit, the streaming service knowingly induced Neumann to breach the agreement and did so while Activision — with Neumann’s assistance — was negotiating a deal with Netflix to distribute Activision’s linear media content.

The complaint seeks not only compensatory and punitive damages but also an injunction barring Netflix from recruiting Activision employees who have fixed-term employment contracts.

“Netflix’s unlawful behavior with regards to Neumann is no anomaly,” Activision alleged. “To the contrary, Netflix has a demonstrated pattern of caring only about attracting and employing whoever Netflix wants, regardless of whether it violates the law along the way.”

Other entertainment companies including Fox and Viacom have recently sued Netflix for poaching executives who were under contract, with a judge in December 2019 granting Fox an injunction.

Neumann joined Activision from Walt Disney Co., where he was CFO of Global Guest Experience at the parks and resorts division. Netflix CEO Reed Hastings told analysts recently that “We felt super fortunate to recruit Spence Neumann, who’s been like the dream CFO for Netflix.”

According to Activision, Netflix even offered to indemnify Neumann for any claims alleging he breached his Activision contract, underscoring that Netflix knew litigation between Activision, on the one hand, and Netflix and/or Neumann, on the other hand, was “the natural and probable consequence of Netflix’s unlawful and unethical conduct.”

Activision also claimed Neumann’s departure has forced it to pay his successor, Dennis Durkin, millions of dollars more in compensation than it would have been obligated to pay Neumann through the three years of his contract.

“Moreover, by causing Neumann to breach his fixed-term employment contract with 16 months remaining in the term, Netflix sent a message to Activision’s other executives that perhaps they too could disregard their fixed-term employment contracts,” the suit said.