Surprising news dropped in early December when Activision Blizzard (NASDAQ: ATVI) announced a lawsuit against Netflix (NASDAQ: NFLX) for allegedly poaching its chief financial officer. The suit claims that Netflix intentionally breached Spencer Neumann's contract by hiring him in January of 2019, a violation of California law. Here is what investors need to know about the situation.
Activision is accusing Netflix of violating California labor laws by hiring Neumann before his contract ended with Activision in 2020. The lawsuit states that Netflix "knowingly induced" the CFO to breach his contract, which it claims intentionally violated the California Labor Code.
At first glance, this seems like Activision is just upset about losing one of its top executives to a competitor. Doesn't this happen all the time in the corporate world? Sure, but in this case, Activision may have a point.
For further details see:
Is Netflix in Trouble for Hiring Activision Blizzard's CFO?