SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
SANTA MONICA COURTHOUSE - DEPARTMENT R
TENTATIVE RULING
TWENTIETH CENTURY FOX FILM
CORPORATION, et al.
vs.

Case No.: SC126423
Hearing Date: November 25, 2019
Dept: R
Time: 9:30 AM

NETFLIX, INC., et al.
Plaintiffs Twentieth Century Fox Film Corporation and Fox 21, Inc.’s motion for summary
judgment on the complaint is denied. Plaintiffs’ motion for summary adjudication of the
inducing breach Waltenberg Agreement and inducing breach of Flynn Agreement causes
of action is denied. Plaintiffs’ motion for summary adjudication of the unfair competition
in violation of Business & Professions Code §17200 cause of action is granted. Plaintiffs are
entitled to injunctive relief as follows: Defendant Netflix, Inc. shall not solicit employees
who are subject to valid Fixed-Term Employment Agreements with Plaintiffs or induce
such employees to breach their valid Fixed-Term Employment Agreements with Plaintiffs.
Plaintiffs’ motion for summary judgment on Defendant’s cross-complaint is granted. In the
alternative, for appeal purposes only, Plaintiffs’ motion for summary adjudication is
granted as to the violation of Business & Professions Code §17200 and declaratory relief
causes of action.
Plaintiffs’ motion for summary adjudication of Defendant’s violation of public policy and
unconscionability affirmative defenses is granted.
Plaintiffs Twentieth Century Fox Film Corporation (“TCFFC”) and Fox 21, Inc. (“Fox
21”) (collectively “Plaintiffs” or “Fox”) move for summary judgment against Defendant Netflix,
Inc. (“Defendant” or “Netflix”) on the complaint and amended cross-complaint. In the
alternative, Plaintiffs move for summary adjudication of the 1st (inducing breach of the
Waltenberg Agreement), 2nd (inducing breach of the Flynn Agreement), and 3rd (unfair
competition in violation of Business & Professions Code §17200) causes of action in their
complaint, the 1st (violation of Business & Professions Code §17200) and 2nd (declaratory relief)
causes of action in Netflix’s amended cross-complaint, and the 3rd (violation of public policy)
and 24th (unconscionability) affirmative defenses in Netflix’s second amended answer.
The court issued a tentative ruling on Fox’s motion for summary judgment/adjudication.
The court’s tentative ruling included treating Fox’s motion for summary judgment/adjudication
of Netflix’s cross-complaint and affirmative defenses as a motion for judgment on the pleadings,
which was granted with leave to amend. (Court’s 6/5/19 Minute Order.) The court continued the
hearing on the motion to July 2, 2019, to permit further briefing on the issue of standing relating
to Fox’s unfair competition in violation of Business & Professions Code §17200 cause of action.
Page 1 of 48

 (Court’s 6/5/19 Minute Order.) Netflix filed an amended cross-complaint and second amended
answer on July 9, 2019. The court later continued the hearing on the motion for summary
judgment/adjudication to November 20, 2019, for further briefing. (Court’s 8/1/19 Minute
Order.)
A. Background
1. Complaint
On September 16, 2016, Plaintiffs filed a complaint against Netflix, alleging causes of
action for inducing breach of the Waltenberg Agreement, inducing breach of the Flynn
Agreement, and unfair competition in violation of Business & Professions Code §17200.
Plaintiffs alleged TCFFC entered into a Fixed-Term Employment Agreement with
Marcos Waltenberg (“Waltenberg”), effective as of December 9, 2014 (“Waltenberg
Agreement”), Waltenberg, as a material condition of his employment with TCFFC, agreed to
perform his duties as Vice President, Promotions, at least through December 31, 2016, Netflix
knew about the Waltenberg Agreement, including that Waltenberg agreed to work with TCFFC
for a specified term that had not yet expired, during its recruitment and solicitation of
Waltenberg, Netflix committed intentional acts designed to induce Waltenberg to breach the
Waltenberg Agreement by offering Waltenberg employment, recruiting and soliciting
Waltenberg, hiring Waltenberg, and indemnifying Waltenberg for claims arising from his breach
of the Waltenberg Agreement, Waltenberg materially breached the Waltenberg Agreement in
January 2016, as a result of Netflix’s tortious interference, by ending his employment with
TCFFC and failing to perform his duties through the agreed-upon term, and TCFFC suffered
damages as a result of Netflix’s conduct. (Complaint ¶¶8-10, 23-31.)
Plaintiff also alleged Fox 21 entered into a Fixed-Term Employment Agreement with
Tara Flynn, effective as of November 19, 2013 (“Flynn Agreement”), Flynn, as a material
condition of her employment with Fox 21, agreed to perform her duties as Executive Director,
Creative, and then Vice President, Creative, through an initial term ending November 19, 2015,
at Fox 21’s election, an additional two-year period ending November 18, 2017, and an additional
two-year period, pursuant to amendment, ending November 18, 2019, Netflix knew about the
Flynn Agreement, including that Flynn had agreed to work for Fox 21 for a specified term that
had not yet expired, during its recruitment and solicitation of Flynn, Netflix committed
intentional acts designed to induce Flynn to breach the Flynn Agreement by offering Flynn
employment, recruiting and soliciting Flynn, hiring Flynn, and indemnifying Flynn for claims
arising from breach of the Flynn Agreement, Flynn materially breached the Flynn Agreement in
August 2016, as a result of Netflix’s tortious interference, by ending her employment with Fox
21 and failing to perform her duties through the agreed-upon term, and Fox 21 suffered damages
as a result of Netflix’s conduct. (Complaint ¶¶12-22, 32-40.)
Plaintiffs alleged Netflix’s intentional interference with their Fixed-Term Employment
Agreements is an unlawful business act or practice under the Unfair Competition Law (“UCL”)
and Netflix has unlawfully competed with Plaintiffs by soliciting, recruiting, and inducing
Plaintiffs’ employees to breach their Fixed-Term Employment Agreements with Plaintiffs.
(Complaint ¶¶41-45.) Plaintiffs alleged Netflix is engaged in a brazen campaign to unlawfully
Page 2 of 48

 target, recruit, and poach valuable Fox executives by illegally inducing them to break their
employment contracts with Plaintiffs and to work at Netflix, an injunction is necessary to abate
Netflix’s continuing threat of unlawfully interfering with Plaintiffs’ Fixed-Term Employment
Agreements, and Plaintiffs are entitled to injunctive relief against Netflix restraining it from
further interfering with any of Plaintiffs’ Fixed-Term Employment Agreements. (Complaint ¶¶1,
45.) Plaintiffs prayed for a “permanent injunction enjoining Netflix, and its agents, servants,
employees, attorneys, successors and assigns, and all persons, firms and corporations acting in
concert with it, from interfering with any of Fox’s Fixed-Term Employment Agreements.”
(Complaint, Prayer 1.)
2. Second Amended Answer
On July 9, 2019, Netflix filed a second amended answer to Plaintiffs’ complaint, asserting
several affirmative defenses, including affirmative defenses for violation of public policy and
unconscionability.
In the violation of public policy affirmative defense, Netflix alleged Plaintiffs’ claims are
barred by the fact that they allege (or are premised on the allegation) that Netflix has induced
breaches of contracts that are void as against public policy. (2nd AA ¶6.) Netflix alleged the
Fixed-Term Employment Agreements, along with Plaintiffs’ practices for obtaining and
enforcing such contracts, run counter to the express provisions and policies of Business &
Professions Code §16600, Civil Code §§3390 and 3423, Labor Code §2855, and C.C.P. §526.
(2nd AA ¶¶7-13.) Netflix also alleged the Fixed-Term Employment Agreements contain certain
one-sided, overbroad, and/or illegal provisions that permeate the contracts, including the
following:
1. Unilateral options, exercisable only by Fox regardless of an employee’s
wishes, to extend the duration of the contract, sometimes by up to four
additional years;
2. An injunctive relief provision that deliberately mischaracterizes the nature of
the employees’ services, purports to grant Fox the right to seek an injunction
to compel continued service with Fox against an employee’s will (to which
Fox is not entitled as a matter of law), and compels the employee to agree that
injunction is an appropriate remedy to “prevent a breach;”
3. An overly-broad non-solicitation provision that is unenforceable as a matter of
law under Business & Professions Code §16600;
4. An overly-broad confidentiality provision that purports to designate virtually
anything the employee knows as Fox’s confidential information; and
5. In some cases, a “no-shop” provision barring employees from even speaking
with other prospective employers until shortly before the end of the contract, a
provision that has obvious anti-mobility and First Amendment implications
(particularly since Fox cannot legally stop its under-contract “staff
employees” from leaving at any time).
(2nd AA ¶¶14-20, 24-33.) Netflix alleged “Fox’s contracting practices are designed to create
undue pressure on employees to accept the contracts Fox offers them, by leading those
employees to believe that their continued employment and/or good standing with Fox depends
Page 3 of 48

 upon acceptance of a proffered contract, and that have room to negotiate only to a limited extent
(and even then, only over salary and title)…” (2nd AA ¶¶20-21.) Netflix also alleged “Fox…uses
the leverage and control that its contracting practices afford it to bind employees successively to
fixed-term employment contracts – for periods greatly exceeding the seven-year limit prescribed
by Labor Code section 2855 – and preclude them from leaving Fox, negotiating for market-based
pay, or even testing their value on the market.” (2nd AA ¶¶23, 34-38.) Netflix alleged “Fox is
engaged in a systematic subversion of California’s pro-employee mobility public policy” as a
result of “Fox’s non-negotiable contract terms” and Fox’s “practices concerning those contracts,”
and, consequently, Plaintiffs’ claims, which depend on the enforceability of those contracts, fail.
(2nd AA ¶39.)
In the unconscionability affirmative defense, Netflix alleged the “contracts at issue are
unconscionable and therefore unenforceable” and, consequently, “Fox cannot enforce
either…Waltenberg’s or…Flynn’s contracts, and Fox cannot obtain an injunction premised on
the inducement of breach of those or other similar contracts.” (2nd AA ¶61.) Netflix alleged
“Fox’s fixed-term employment contracts include overbroad, overly harsh, and unfairly one-sided
provisions that are substantively unconscionable,” including the following provisions: (1) the
injunctive relief provisions; (2) unilateral option provisions; (3) non-solicitation provisions; and
(4) confidentiality provisions. (2nd AA ¶¶63-77.) Netflix alleged the Fixed-Term Employment
Agreements are also procedurally unconscionable “because they are imposed under oppressive
circumstances that leave little or no opportunity for Fox’s employees to negotiate or decline
relevant provisions.” (2nd AA ¶¶78-91.) Netflix’s unconscionability defense appears to be
directed at all of Fox’s Fixed-Term Employment Agreements.
The violation of public policy and unconscionability affirmative defenses are directed
against all of Fox’s causes of action, including the unfair competition in violation of Business &
Professions Code §17200 cause of action, whereby Fox seeks an injunction restraining Netflix
from further interfering with any of Fox’s Fixed-Term Employment Agreements. (2nd AA ¶¶6,
61.) In the second amended answer, Netflix specifically identifies the Waltenberg and Flynn
Agreements, alleging they violate public policy and are unconscionable. However, the
allegations in the second amended answer suggest Netflix is also challenging all of Fox’s FixedTerm Employment Agreements (at least those with the same challenged provisions). (2nd AA
¶¶5-39, 60-92.)
3. Amended Cross-Complaint
On July 9, 2019, Netflix filed an amended cross-complaint, asserting causes of action for
violation of Business & Professions Code §17200 and declaratory relief.
In the violation of Business & Professions Code §17200 cause of action, Netflix alleged
“Fox’s fixed-term employment contracts, along with its practices for obtaining and enforcing
such contracts, run counter to the express provisions and policies” of Business & Professions
Code §16600, Civil Code §§3390 and 3423, Labor Code §2855, and C.C.P. §526. (Amended XC ¶¶24-29, 63.) Netflix alleged Fox’s Fixed-Term Employment Agreements also contain onesided, overbroad, and/or illegal provisions that permeate the contracts, including the unilateral
options provision, injunctive relief provisions, non-solicitation clause provisions, confidentiality
provisions, and “no-shop” provisions. (Amended X-C ¶¶30-35, 40.) Netflix alleged “Fox’s
Page 4 of 48

 contracting practices are designed to create undue pressure on employees to accept the contracts
Fox offers them, by leading those employees to believe that their continued employment and/or
good standing with Fox depends upon acceptance of a proffered contract, and that they have
room to negotiate only to a limited extent (and even then, only over salary and title). (Amended
X-C ¶¶36-38, 45-62.) Netflix alleged “Fox also uses the leverage and control that its contracting
practices afford it to bind employees successively to fixed-term employment contracts – for
periods greatly exceeding the seven-year limit prescribed by Labor Code §2855 – and preclude
them from leaving Fox, negotiating for market-based pay, or even testing their value on the
market.” (Amended X-C ¶¶39, 41-44, 63.)
In the declaratory relief cause of action, Netflix alleged an “actual controversy has arisen
and now exists between Netflix and Fox concerning their respective rights and duties with
respect to Fox’s fixed-term employment agreements and efforts to unlawfully restrict or prevent
Netflix from recruiting, hiring, and/or employing Fox’s current and former California
employees.” (Amended X-C ¶66.) Netflix alleged “Fox’s fixed-term employment agreements
with Waltenberg and Flynn, and upon information and belief, with other Fox employees,
unlawfully restrain them from their right to pursue lawful employment with Netflix” in direct
violation of California law, including Business & Professions Code §16600. (Amended X-C
¶67.) Netflix seeks judicial determinations that “Fox’s contracting practices…[are] unlawful
under California law” and Netflix has the right to recruit, hire, and/or retain Fox’s current and
former employees that are subject to the Fixed-Term Employment Agreements. (Amended X-C
¶¶69-70.)
B. Evidentiary Objections
Netflix’s evidentiary objections are sustained as to Nos. 1, 2, 3, 6, 7, 8, 15, 16, 19, 20, 29
(in part),1 and 30, and overruled as to Nos. 4, 5, 9, 10, 11, 12, 13, 14, 17, 18, 21, 22, 23, 24, 25,
26,2 27, and 28.
Fox’s evidentiary objections are sustained as to Nos. 1, 3-4, 6, 8, 10-13, 16, 23, 25, 2728, 30-31, 35-38, 43-45, 55, 59-61, 63-71, 73-82, 84, 85 (in part),3 87-90, 92-106, 109-110, 112,
114, 117, 121-126, 131, 133-134, 136, 138-141, 144-145, 151, and 153-156, 164-165, and
overruled as to Nos. 2, 5, 7, 9, 14-15, 17-22, 24, 26, 29, 32-34, 39-42, 46-54, 56-58, 62, 72, 83,
86, 91, 107-108, 111, 113, 115-116, 118-120, 127-130, 132, 135, 137, 142-143, 146-148, 150,
152, and 157-163. Fox’s objections Nos. 166-167 are not applicable. The court will hear
argument on No. 149.

No. 29 is only sustained as to the following language: “but he intimated how smart she was, how she was one of
the few people he trusted, how they had worked together for a very long time. It was incredibly apparent that she
was one of the most respected people in the office.”
1

2

Nos. 21-22 and 24-26 also do not comply with CRC 3.1354(b).

3

No. 85 is sustained only as to 441:15-442:2 of Waltenberg’s deposition testimony.

Page 5 of 48

 Netflix’s evidentiary objections (dated 10/25/19) to Fox’s supplemental evidence are
overruled as to Nos. 1-3, 5-12, 14-18, 20-30, 33, 35-40, 43,4 47, 52, 60-71, 73, and 75-76, and
sustained as to Nos. 4, 13, 19 (in part),5 31-32, 34, 41-42, 44-46, 48-51, 53-59, 72, 74, and 77-80.
Fox’s evidentiary objections (dated 11/13/19) to Netflix’s supplemental evidence are
overruled as to Nos. 4, 5, 8-10, 14, 16, 20-21, 25, 27, 31-35, 39, 41-42, 51, 53, 71-76, 79-81, 87,
89, 92, 99-100, 102-103, 105-106, 115-116, 118-119, 124-127, 137, 144, 168-169, 173-176, 178182, 183 (only as to the parts in English), 185-186, 189-190, and 192-193, and sustained as to
Nos. 1-3, 6-7, 11-13, 15, 17-19, 22-24, 26, 28-30, 36-38, 40, 43-50, 52, 54-70, 77-78, 82-86, 88,
90-91, 93-98, 101, 104, 107-114, 117, 120-123, 128-136, 138-143, 145-167, 170-172, 177, 184,
187-188, and 191. The court will hear argument on No. 194.
The Court declines to rule on Netflix’s evidentiary objections (dated 11/20/19). (See
C.C.P. §437c(q) (“In granting or denying a motion for summary judgment or summary
adjudication, the court need rule only on those objections to evidence that it deems material to its
disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion
shall be preserved for appellate review.”).)
The Court will not consider the parties’ arguments and evidence in the second
supplemental briefs regarding damages with respect to Fox’s inducing breach of agreement
causes of action. The Court did not give the parties leave to file supplemental briefs and
evidence regarding damages.
C. CRC Violations
Fox did not include Netflix’s cross-claims for violation of Business and Professions Code
§17200 and declaratory relief in the original separate statement in violation of CRC 3.1350(b)
and (d).
Fox’s original separate statement does not identify “material fact[s] claimed to be
without dispute” with respect to resulting damages in support of Issues 1 and 2. (See CRC
3.1350(d)(1)(B).) In the original separate statement, Fox stated it did not receive the benefit of
Waltenberg’s services after January 22, 2016 through the end of the Term, December 31, 2016,
and it did not receive the benefit of Flynn’s services after September 2, 2016 through the end of
the Term, November 18, 2017. (Fox – SS Nos. 11 and 23.) However, these are not material facts
showing resulting damages. Fox’s original separate statement also does not identify “material
fact[s] claimed to be without dispute” with respect to resulting economic harm in support of
Issue 3. Nevertheless, the Court will proceed on the merits because Netflix did not challenge the
sufficiency of Fox’s separate statement, Fox cited to evidence of damages in the original
separate statement, and Netflix addressed the issue of damages.
Fox filed a supplemental separate statement (dated 9/12/19) and Netflix filed a separate
statement in opposition to Fox’s supplemental separate statement (dated 10/25/19.) The CRC

4

Netflix appears to be objecting to the separate statement, not the underlying evidence.

5

No. 19 is sustained only as to 46:8-18.

Page 6 of 48

 violations identified above pertain to Fox’s original separate statement, not Fox’s supplemental
separate statement.
D. Undisputed Facts
1. Waltenberg
Waltenberg’s 2009 contract with Fox had a fixed-term and a unilateral option. (Netflix’s
Response to Fox’s Supplemental SS, pg. 70, No. 12.) Waltenberg was an at-will Fox employee
between May 2012 and December 2014. (Netflix’s Response to Fox’s Supplemental SS, pgs. 68
and 319, Nos. 9 and 103.) Waltenberg explored employment opportunities between 2012 and
2015, but ultimately decided to stay at Fox. (Netflix’s Response to Fox’s Supplemental SS, pgs.
69 and 320, Nos. 10 and 104.) Fox and Waltenberg executed a written contract for employment
for a specified term, dated December 9, 2014 (“Waltenberg Agreement”). (Netflix’s Response to
Fox’s SS, pgs. 2-4, No. 1.) Waltenberg had approximately 15 years of experience working in
marketing by the time he negotiated the 2015 agreement. (Netflix’s Response to Fox’s
Supplemental SS, pgs. 69 and 320, Nos. 11 and 105.) Jo Ann Kennedy did not personally coerce
Waltenberg into signing his contract. (Netflix’s Response to Fox’s Supplemental SS, pgs. 71-72,
321, Nos. 14 and 107.) Waltenberg negotiated the salary in his 2015 contract above what Fox
initially offered. (Netflix’s Response to Fox’s Supplemental SS, pgs. 72 and 322, Nos. 15 and
108.) At the time Waltenberg signed his employment contract with Fox in the spring of 2015,
Waltenberg understood that he was agreeing to work for Fox for a specified term and Fox was
agreeing to employ him for a specified term. (Netflix’s Response to Fox’s SS, pgs. 76-79, Nos.
31-32.)
The Waltenberg Agreement contains the following injunctive relief provision:
The services to be furnished by you hereunder and the rights and privileges
granted to the Company by you are of a special, unique, unusual, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and a breach by you of any of the provisions contained herein will cause the
Company irreparable injury and damage. You expressly agree that the Company
shall be entitled to seek injunctive and other equitable relief to prevent a breach of
this Agreement by you. Resort to such equitable relief, however, shall not be
construed as a waiver of any proceeding or succeeding breach of the same or any
other term or provision. The various rights and remedies of the Company
hereunder shall be construed to be cumulative and no one of them shall be
exclusive of any other or of any right or remedy allowed by law.
(Netflix’s Response to Fox’s SS, pgs. 63-64, No. 29.) (Netflix’s Response to Fox’s Supplemental
SS, pgs. 3, 79-80, Nos. 2 and 21.)
The Waltenberg Agreement contains the following confidentiality provision:
You understand and agree that in the course of employment with the Company,
you may acquire confidential information and trade secrets concerning the
Page 7 of 48

 Company’s operations, its future plans and its method of doing business (and the
operations, future plans and method of doing business of Company’s affiliates),
including, by the way of example, but by no means limited to, highly proprietary
information about the Company’s (and its affiliates) customers, processes,
product development, financial, marketing, pricing, cost, and compensation,
(hereinafter collectively “Trade Secrets”), all of which information you
understand and agree would be extremely damaging to the company if disclosed
to a competitor or made available to any other person or corporation. As used
herein, the term “competitor” includes, but is not limited to, any corporation, firm
or business engaged in a business similar to that of the Company or its subsidiary
companies. You understand and agree that such information is divulged to you in
confidence and you understand and agree that, at all times, you shall keep in
confidence and will not disclose or communicate Trade Secrets or any other secret
and confidential information on your own behalf, or on behalf of any competitor,
if such information is not otherwise publicly available, unless disclosure is made
pursuant to written approval by the Company or is required by law. In view of the
nature of your employment and information and Trade Secrets which you may
receive during the course of your employment, you likewise agree that the
company would be irreparably harmed by any violation of this Agreement and
that, therefore, the Company shall be entitled to seek an injunction prohibiting
you from any violation or threatened violation of this Agreement.
(Netflix’s Response to Fox’s Supplemental SS, pgs. 3-4, 81-82, Nos. 3 and 23.)
The Waltenberg Agreement contains the following non-solicitation provision:
You will not, during the term of your employment and for a period of two (2)
years thereafter, either individually or on behalf of any other entity, directly or
indirectly, induce or solicit or approach or attempt to induce or solicit or approach
any person who is an employee of the Company, or any of its affiliates to render
services to any other person, firm or corporation.
(Netflix’s Response to Fox’s Supplemental SS, pgs. 5 and 83, Nos. 4 and 25.)
The Waltenberg Agreement does not bar Waltenberg from pursuing at any time postcontract-expiration employment opportunities. (Netflix’s Response to Fox’s Supplemental SS,
pgs. 5, 84, 322, Nos. 5, 27, and 109.)
Fox, pursuant to Paragraph 1(a) of the Waltenberg Agreement, agreed to employ
Waltenberg for a period of two years, from January 1, 2015 to December 31, 2016 (“Term”).
(Netflix’s Response to Fox’s SS, pgs. 4-5, No. 2.) The Waltenberg Agreement contains an
option, exercisable at Fox’s discretion. (Netflix’s Response to Fox’s Supplemental SS, pgs. 3
and 73, Nos. 1 and 16.) The option is for an additional two-year period (from January 1, 2017 to
December 31, 2018). (Netflix’s Response to Fox’s Supplemental SS, pg. 3, No. 1.)
(Supplemental Declaration of Lens ¶66; Exhibit 64.) On November 6, 2015, Netflix sent a
written offer of employment to Waltenberg (“Offer Letter”). (Netflix’s Response to Fox’s SS,
pg. 5, No. 3.) Waltenberg executed Netflix’s Offer Letter on November 7, 2015. (Netflix’s
Page 8 of 48

 Response to Fox’s SS, pg. 5, No. 4.) Prior to November 6, 2015, Netflix was aware that
Waltenberg had an employment agreement with Fox that contained a specified term that had not
expired. (Netflix’s Response to Fox’s SS, pgs. 5-6, No. 5.)6 On December 16, 2015, Netflix
agreed in writing to defend and indemnify Waltenberg from and against any action by Fox taken
in connection with his acceptance of Netflix’s offer of employment (“Waltenberg
Indemnification Agreement”). (Netflix’s Response to Fox’s SS, pgs. 6-9, No. 6.) Netflix paid for
Pennington Lawson LLP to represent Waltenberg. (Netflix’s Response to Fox’s SS, pg. 7, No.
7.) Netflix more than doubled Waltenberg’s salary. (Netflix’s Response to Fox’s SS, pgs. 9-11,
No. 8.) Waltenberg stopped working at Fox on January 22, 2016. (Netflix’s Response to Fox’s
SS, pg. 11, No. 9.) Prior to January 22, 2016, Netflix was aware the Waltenberg Agreement
recited a term that ended on December 31, 2016. (Netflix’s Response to Fox’s SS, pgs. 11-12,
No. 10.) Waltenberg started working at Netflix on January 25, 2016. (Netflix’s Response to
Fox’s SS, pg. 15, No. 12.)
Waltenberg’s 2009 Fox contract contained an injunctive relief provision, confidentiality
agreement, and non-solicitation agreement that are substantively identical to the injunctive relief
provision, confidentiality agreement, and non-solicitation agreement contained in Waltenberg’s
2015 Fox contract. (Netflix’s Response to Fox’s Supplemental SS, pgs. 86 and 321, Nos. 28 and
106.)
2. Flynn
Flynn’s 2012 contract with Fox had a fixed-term and a unilateral option. (Netflix’s
Response to Fox’s Supplemental SS, pg. 205, No. 43.)
The Flynn 2013 Agreement contains the following injunctive-relief provision:
The services to be furnished by you hereunder and the rights and privileges
granted to the Company by you are of a special, unique, unusual, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and a breach by you of any of the provisions contained herein will cause the
Company irreparable injury and damage. You expressly agree that the Company
shall be entitled to seek injunctive and other equitable relief to prevent a breach of
this Agreement by you. Resort to such equitable relief, however, shall not be
construed as a waiver of any proceeding or succeeding breach of the same or any
other term or provision. The various rights and remedies of the Company
hereunder shall be construed to be cumulative and no one of them shall be
exclusive of any other or of any right or remedy allowed by law.

Netflix responded to No. 5, as follows: “Undisputed that prior to November 6, 2015, Netflix was aware Mr.
Waltenberg had an employment agreement with Fox purporting to obligate him to a fixed-term ending at some point
in the future, but disputed as to whether the contract is valid and enforceable…” (Netflix’s Response to Fox’s SS,
pgs. 5-6, No. 5.) In this response, Netflix does not dispute it was aware of the Waltenberg Agreement prior to
November 6, 2015. Netflix only disputes the validity and enforceability of the agreement.
6

Page 9 of 48

 (Netflix’s Response to Fox’s SS, pgs. 64-65, No. 30.) (Netflix’s Response to Fox’s Supplemental
SS, pgs. 135-136, 213, Nos. 32 and 49.)
The Flynn 2013 Agreement contains the following confidentiality provision:
You understand and agree that in the course of employment with the Company,
you may acquire confidential information and trade secrets concerning the
Company’s operations, its future plans and its method of doing business (and the
operations, future plans and method of doing business of Company’s affiliates),
including, by the way of example, but by no means limited to, highly proprietary
information about the Company’s (and its affiliates) customers, processes,
product development, financial, marketing, pricing, cost, and compensation,
(hereinafter collectively “Trade Secrets”), all of which information you
understand and agree would be extremely damaging to the company if disclosed
to a competitor or made available to any other person or corporation. As used
herein, the term “competitor” includes, but is not limited to, any corporation, firm
or business engaged in a business similar to that of the Company or its subsidiary
companies. You understand and agree that such information is divulged to you in
confidence and you understand and agree that, at all times, you shall keep in
confidence and will not disclose or communicate Trade Secrets or any other secret
and confidential information on your own behalf, or on behalf of any competitor,
if such information is not otherwise publicly available, unless disclosure is made
pursuant to written approval by the Company or is required by law. In view of the
nature of your employment and information and Trade Secrets which you may
receive during the course of your employment, you likewise agree that the
company would be irreparably harmed by any violation of this Agreement and
that, therefore, the Company shall be entitled to seek an injunction prohibiting
you from any violation of threatened violation of this Agreement.
(Netflix’s Response to Fox’s Supplemental SS, pgs. 136-137, 214-215, Nos. 33 and 51.)
The Flynn 2013 Agreement contains the following non-solicitation provision:
You will not, during the term of your employment and for a period of two (2)
years thereafter, either individually or on behalf of any other entity, directly or
indirectly, induce or solicit or approach or attempt to induce or solicit or approach
any person who is an employee of the Company, or any of its affiliates to render
services to any other person, firm or corporation.
(Netflix’s Response to Fox’s Supplemental SS, pgs. 137, 216-217, Nos. 34 and 53.)
Fox and Flynn executed a written contract for employment for a specified term, dated
November 19, 2015 (the “Flynn Agreement”).7 At the time Flynn signed her employment
7

In response to No. 13, Netflix does not dispute the existence of the Flynn Agreement. Netflix only disputes the
validity and enforceability of the Flynn Agreement. (See Netflix’s Response to Fox’s SS, pgs. 20-25, No. 13
(“Disputed as to whether Fox and Flynn executed a valid and enforceable contract for employment for a specified

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 contract with Fox in the fall of 2015, Flynn understood that she was agreeing to work for Fox for
a specified term. (Netflix’s Response to Fox’s SS, pgs. 81-85, No. 36.) In the fall of 2015, Fox
offered Flynn $180,000 per annum, Flynn asked for $250,000 per annum, and Fox and Flynn
executed the Flynn Agreement, which provided for a salary of $190,000 per annum. (Netflix’s
Response to Fox’s SS, pgs. 85-86, No. 37.) Flynn negotiated her salary up to the $190,000.00 to
$225,000.00 range in her 2015 contract amendment. (Netflix’s Response to Fox’s Supplemental
SS, pgs. 206 and 319, Nos. 44 and 101.)
Flynn’s 2015 contract does not bar Flynn from pursuing at any time post-contractexpiration employment opportunities. (Netflix’s Response to Fox’s Supplemental SS, pgs. 138,
218, 319, Nos. 35, 55, and 102.)
Fox, pursuant to Paragraph 1 of the Flynn Agreement, agreed to employ Flynn for a
period of two years from November 19, 2015 to November 18, 2017 (the “Term”). (Netflix’s
Response to Fox’s SS, pg. 25, No. 14.) The 2015 Flynn Agreement contains an option,
exercisable at Fox’s discretion. (Netflix’s Response to Fox’s Supplemental SS, pgs. 135 and
207, Nos. 31 and 45.) The option is for an additional two-year period (from November 19, 2017
to November 18, 2019). (Netflix’s Response to Fox’s Supplemental SS, pg. 135, No. 31.) On
August 8, 2016, Netflix sent a written offer of employment to Flynn (“Offer Letter”). (Netflix’s
Response to Fox’s SS, pgs. 25-26, No. 15.) Flynn executed Netflix’s Offer Letter on August 9,
2016. (Netflix’s Response to Fox’s SS, pg. 26, No. 16.) Prior to August 8, 2016, Netflix was
aware that Flynn had an employment agreement with Fox that contained a specified term that
had not expired.8 On August 9, 2016, Netflix agreed in writing to defend and indemnify Flynn
from and against any action by Fox taken in connection with her acceptance of Netflix’s offer of
employment (“Flynn Indemnification Agreement”). (Netflix’s Response to Fox’s SS, pg. 28,
No. 18.) Netflix paid for Pennington Lawson LLP to represent Flynn. (Netflix’s Response to
Fox’s SS, pgs. 28-29, No. 19.) Netflix doubled Flynn’s salary. (Netflix’s Response to Fox’s SS,
pgs. 29-30, No. 20.) Flynn stopped working at Fox on September 2, 2016. (Netflix’s Response
to Fox’s SS, pg. 30, No. 21.) Prior to September 2, 2016, Netflix was aware the Flynn
Agreement recited a term that ended on November 18, 2017. (Netflix’s Response to Fox’s SS,
pgs. 30-31, DRSS No. 22.) On September 6, 2016, Flynn started working at Netflix. (Netflix’s
Response to Fox’s SS, pg. 34, No. 24.)
The total term of Flynn’s 2013 contract, inclusive of the November 2015 amendment and
all available Fox options, was six years. (Netflix’s Response to Fox’s Supplemental SS, pgs.
139, 276, 338-339, Nos. 36, 65, and 117.) Flynn’s 2012 and 2013 Fox contracts provide for
different titles and salaries. (Netflix’s Response to Fox’s Supplemental SS, pgs. 140, 276-277,
339, Nos. 37, 66, and 118.)

term, dated November 19, 2015, an essential element of Fox’s claim. [¶] Netflix contends the contract is
unenforceable…”).)
Netflix responded to No. 17, as follows: “Undisputed that prior to August 8, 2016, Netflix was aware Ms. Flynn
had an employment agreement with Fox purporting to obligate her to a fixed-term ending at some point in the
future, but disputed as to whether the contract is valid and enforceable…” (Netflix’s Response to Fox’s SS, pgs.
26-28, No. 17.) In this response, Netflix does not dispute it was aware of the Flynn Agreement prior to August 8,
2016. Netflix only disputes the validity and enforceability of the agreement.
8

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 E. Analysis
1. Complaint
a. Inducing Breach of the Waltenberg Agreement (1st COA) by TCFFC
“‘The elements which a plaintiff must plead to state the cause of action for intentional
interference with contractual relations are (1) a valid contract between plaintiff and a third party;
(2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a
breach or disruption of the contractual relationship; (4) actual breach or disruption of the
contractual relationship; and (5) resulting damage.’ [Citation]” (Quelimane Co. v. Stewart Title
Guaranty Co. (1998) 19 Cal.4th 26, 55.) “Because interference with an existing contract receives
greater solicitude than does interference with prospective economic advantage [Citation], it is not
necessary that the defendant’s conduct be wrongful apart from the interference with the contract
itself. [Citation]” (Id.)
TCFFC submitted evidence proving each element of the inducing breach of the
Waltenberg Agreement cause of action against Netflix. (See C.C.P. §437c(p)(1).) TCFFC
submitted evidence showing the existence of an agreement with Waltenberg. It is undisputed
that Fox and Waltenberg executed the Waltenberg Agreement and, pursuant to Paragraph 1(a) of
the agreement, TCFFC agreed to employ Waltenberg for a period of two years, from January 1,
2015 to December 31, 2016 (“Term”). TCFFC also submitted evidence suggesting Netflix was
aware of the Waltenberg Agreement, Netflix engaged in intentional acts designed to induce
breach or disruption of the Waltenberg Agreement, and there was an actual breach or disruption
of the Waltenberg Agreement. It is undisputed that Netflix was aware, prior to November 6,
2015, that Waltenberg had an employment agreement with Fox that contained a specified term
that had not expired, Netflix sent an Offer Letter to Waltenberg on November 6, 2015,
Waltenberg executed the Offer Letter on November 7, 2015, Netflix agreed in writing, on
December 16, 2015, to defend and indemnify Waltenberg from and against any action by Fox
taken in connection with his acceptance of Netflix’s offer of employment, Netflix paid for
Pennington Lawson LLP to represent Waltenberg, Netflix more than doubled Waltenberg’s
salary, Waltenberg stopped working at Fox on January 22, 2016, Netflix was aware, prior to
January 22, 2016, the Waltenberg Agreement recited a term that ended on December 31, 2016,
and Waltenberg started working at Netflix on January 25, 2016. Additionally, TCFFC submitted
evidence suggesting it suffered resulting damages. Specifically, TCFFC submitted evidence
suggesting it had to pay a consultant (Hugo Domenech) to assume some of Waltenberg’s duties

Page 12 of 48

 while it searched for a replacement and to otherwise assist with the transition. 9 (Fox’s SS, pg.
11, No. 11.)10
Based on the foregoing, TCFFC met its burden on summary judgment/adjudication.
Therefore, the burden shifts to Netflix to create a triable issue of material fact. As discussed
below in detail, Netflix met its burden.
Netflix submitted evidence showing a triable issue of material fact exists as to resulting
damages. Netflix submitted evidence suggesting TCFFC saved time and money by promoting
Castillo to Waltenberg’s position because TCFFC did not have to train someone from the outside
and paid Castillo significantly less than Waltenberg. (Netflix’s Response Fox’s SS, pgs. 12-15,
11.) (Opposition, pg. 14, fn. 18.) Netflix also submitted evidence challenging TCFFC’s claim of
a loss/decrease in millions of dollars in promotional support. (Netflix’s Response to Fox’s SS,
pgs. 12-15, No. 11.) The Executive Summary Marketing Partnerships Promotions sheet (Exhibit
92) shows $7,525,819 in partner advertising support (“ATL Value”) secured for “Home,” $5
million of which was from a “Global” (not Latin America specific) McDonald’s deal, rather than
the $17 million Roca testified Waltenberg secured. (Fox’s SS No. 11.) (Netflix’s Response to
Fox’s SS, pgs. 12-15, No. 11.) (Caro Exhibit 92.) Breen testified that the amount of money that
brands spend on promotions does not impact how much money Fox spends on its own marketing
of its movies. (Netflix’s Response to Fox’s SS, pgs. 12-15, No. 11.) (Caro Exhibit 1.)
TCFFC’s request for $1 in damages does not save the motion for summary
judgment/adjudication because, as discussed above, there is a triable issue of material fact as to
whether Plaintiffs suffered any resulting damages, which cannot be determined via the instant
motion.
Netflix argues it was not a substantial factor in causing an alleged breach of the
Waltenberg Agreement. (Opposition, pg. 14.) Netflix cites to Yanez v. Plummer (2013) 221
Cal.App.4th 180, 187, for the proposition that “conduct is not a substantial factor in causing harm
if the same harm would have occurred without that conduct.” (Opposition, pg. 14.) Netflix
argues the evidence shows Waltenberg would have left TCFFC before his contract ended even
without a job offer from Netflix. (Opposition, pg. 14.) However, Netflix did not submit
admissible evidence showing the same harm would have occurred without that conduct – that
Waltenberg would have left TCFFC before the Term on his agreement expired and/or on the
same date he left TCFFC.

9

Fox, in its Separate Statement, cited to evidence suggesting TCFFC had to hire a consultant, Hugo Domenech
(“Domenech”), “to finish the execution of the outstanding work that [Waltenberg] had left behind,” Domenech
stayed on as a consultant for three months, and Domenech was paid approximately 23,000 pounds (for
compensation and accommodations). (Declaration of Lens ¶74, Exhibit 73, Deposition of Roca 175:14-180:11.) In
Objection No. 24, Netflix objected to certain portions of Anna Roca’s (“Roca”) deposition testimony. However,
Netflix did not object to 175:14-180:11 of Roca’s deposition testimony. Moreover, the Court overruled Netflix’s
objections to the challenged portions of Roca’s deposition testimony.
Fox also claims to have suffered millions of dollars in losses due to decreased partner advertising support. (Fox’s
SS, pg. 10, No. 11 – Exhibit 73.) (Motion, pg. 13, fn. 3.) However, TCFFC did not submit admissible evidence
connecting the decreased advertising support (which was not to be paid to TCFFC) to any cognizable damage
suffered by Fox (i.e. loss of revenue, increase in expense, etc.).
10

Page 13 of 48

 Netflix also argues its conduct was not designed to induce a breach of the Waltenberg
Agreement because Netflix expected Waltenberg to be let out of his contract. (Opposition, pgs.
13-14.) However, in light of the undisputed facts set forth above, the evidence cited by Netflix
does not create a triable issue of material fact as to interference or causation.
Netflix argues its conduct was justified. (Opposition, pgs. 19-20.) Netflix argues Fox
ignored its justification defense, which provides another basis to deny the motion for summary
judgment/adjudication. (Opposition, pg. 19.) According to Netflix, its “recruitment and hiring of
Flynn and Waltenberg – and its pursuit of qualified candidates for any given position –
vindicates California’s well-established public policy in favor of ‘open competition and
employee mobility’” and there are disputed issues of material fact as to “whether the nature of
Netflix’s conduct, weighted against Fox’s contracts and their effect on mobility and labor market
competition, justify any alleged interference with contract.” (Opposition, pg. 19.) However, Fox
was not required to address Netflix’s justification defense11 to meet its moving burden on
summary judgment/adjudication (on the complaint). (See C.C.P. §437c(p)(1) (“A plaintiff….has
met his or her burden of showing that there is no defense to a cause of action if that party has
proved each element of the cause of action entitling the party to judgment on the cause of
action.”).) Moreover, the undisputed facts show Netflix intentionally interfered with the
Waltenberg and Flynn Agreements and Netflix’s “stake in advancing [its] economic interest will
not justify the intentional inducement of a contract breach…” (See Environmental Planning &
Information Council v. Superior Court (1984) 36 Cal.3d 188, 193-194 (“The contours of
justification, or privilege, are not precisely defined. In relation to the tort of interference with
contract, we have said: ‘Whether an intentional interference by a third party is justifiable
depends upon a balancing of the importance, social and private, of the objective advanced by the
interference against the importance of the interest interfered with, considering all circumstances
including the nature of the actor's conduct and the relationship between the parties.’ [Citation]
When the defendant's action does not interfere with the performance of existing contracts, the
range of acceptable justification is broader; for example, a competitor's stake in advancing his
own economic interest will not justify the intentional inducement of a contract breach [Citation],
whereas such interests will suffice where contractual relations are merely contemplated or
potential. [Citation]”).) (See also Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 36 (“It is well
established…that a person is not justified in inducing a breach of contract simply because he is in
competition with one of the parties to the contract and seeks to further his own economic
advantage at the expense of the other. [Citation] Whatever interest society has in encouraging
free and open competition by means not in themselves unlawful, contractual stability is generally
accepted as of greater importance than competitive freedom.”).) There can be no dispute that
Netflix, by virtue of its “entry into original content production,” was in effect competing with
Fox. (Opposition, pg. 1.) The undisputed facts show Netflix intentionally interfered with Fox’s
contracts with Waltenberg and Flynn. In doing so, Netflix arguably sought to further its own
economic interest at Fox’s expense and such conduct is not justified.
Netflix also argues the Fixed-Term Employment Agreements are tainted with illegality
and, therefore, cannot be enforced. Specifically, Netflix argues the Fixed-Term Employment
Agreements, including the Waltenberg Agreement, violate public policy and/or are
11

Netflix’s second amended answer contains a justification affirmative defense (AD No. 23). Fox did not move for
summary adjudication of the justification affirmative defense.

Page 14 of 48

 unconscionable. However, as discussed below in detail, Netflix did not meet its burden of
showing a triable issue of material fact exists as to these defenses.
In light of the court’s ruling, Fox’s motion for summary judgment is denied. Based on
the foregoing, TCFFC’s motion for summary adjudication of the inducing breach of the
Waltenberg Agreement cause of action is denied.
b. Inducing Breach of the Flynn Agreement (2nd COA) by Fox 21
Fox 21 did not submit evidence proving each element of the inducing breach of the Flynn
Agreement cause of action against Netflix. (See C.C.P. §437c(p)(1).) Fox 21 submitted evidence
showing the existence of an agreement with Flynn. It is undisputed that Fox 21 and Flynn
executed the Flynn Agreement and, pursuant to Paragraph 1 of the Flynn Agreement, Fox 21
agreed to employ Flynn for a period of two years from November 19, 2015 to November 18,
2017. Fox 21 also submitted evidence suggesting Netflix was aware of the Flynn Agreement,
engaged in intentional acts designed to induce breach or disruption of the Flynn Agreement, and
there was an actual breach or disruption of the Flynn Agreement. It is undisputed that Netflix
sent a written offer of employment to Flynn on August 8, 2016, Netflix was aware, prior to
August 8, 2016, Flynn had an employment agreement with Fox that contained a specified term
that had not expired, Netflix agreed in writing, on August 9, 2016, to defend and indemnify
Flynn from and against any action by Fox taken in connection with her acceptance of Netflix’s
offer of employment, Netflix paid for Pennington Lawson LLP to represent Flynn, Netflix
doubled Flynn’s salary, Flynn stopped working at Fox on September 2, 2016, Netflix was
aware, prior to September 2, 2016, the Flynn Agreement recited a term that ended on November
18, 2017, and Flynn started working at Netflix on September 6, 2016. However, Fox 21 did not
submit admissible evidence showing resulting damages. Fox 21 appears to assume actual
damages are presumed merely by Flynn’s failure to complete her contract terms. However, Fox
21 did not cite to on-point case law or authority to support such a presumption. As to specific
damages, Fox’s separate statement lists an item of damage under No. 23, suggesting Fox 21
hired Andrew Richley (“Richley”), intending to replace an executive level opening created by
Flynn’s departure, and paid Richley a higher salary than Flynn. However, this is too tenuous to
support summary adjudication because the evidence also shows Richley did not replace Flynn
directly in that it was a different position and Flynn’s department was terminated. (Fox’s
Separate Statement, pg. 21, No. 23 – Declaration of Lens ¶¶53 and 75; Exhibits 52 and 74.)
Based on the foregoing, the court finds Fox 21 did not meet its burden on summary
judgment/adjudication to show damages on the second cause of action
In any event, Netflix submitted evidence showing a triable issue of material fact exists as
to resulting damages. Netflix submitted evidence suggesting Fox 21 never actually replaced
Flynn and there is no evidence of monetary harm. (Netflix’s Response to Fox’s SS, pgs. 31-32,
No. 23.) (Opposition, pg. 14, fn. 18.) Barron testified she has not performed an analysis to
determine whether there has been a decline in revenues attributed to Fox 21 since the fall of 2016
and such an analysis would not be useful because Flynn “had nothing to do with revenues. She
had more to do with the cost side of it.” (Netflix’s Response to Fox’s SS, pgs. 31-32, No. 23.)
Barron also testified she does not believe Fox 21 has replaced Flynn, she is not aware of any
disruption to Fox 21’s financial planning, long-range plans, as a result of Flynn’s departure, and
Page 15 of 48

 she is not generally aware of any effect on Fox 21 as a result of Flynn’s departure (unless
someone wanted to bring it up to her). (Netflix’s Response to Fox’s SS, pgs. 31-32, No. 23.)
(Deposition of Barron 202:25-203:25.) Fan testified Flynn was never replaced, no one ever
confirmed for Fan the person to whom she would be reporting, and “[they] just made sure the job
was done and persevered.” (Netflix’s Response to Fox’s SS, pgs. 31-32, No. 23.) (Deposition of
Fan 106:16-108:5.)
Fox 21’s request for $1 in damages does not save the motion for summary
judgment/adjudication because there is a triable issue of material fact as to whether Fox 21
suffered any damage, which cannot be determined via the instant motion.
Netflix argues it was not a substantial factor in causing an alleged breach of the Flynn
Agreement. (Opposition, pg. 14.) Netflix argues the evidence shows Flynn would have left Fox
21 before her contract ended even without a job offer from Netflix. (Opposition, pg. 14.)
However, Netflix did not submit admissible evidence to show the same harm would have
occurred without that conduct – that Flynn would have left Fox 21 before the Term on her
agreement expired and/or on the same date she left Fox 21.
Netflix also argues its conduct was not designed to induce a breach of the Flynn
Agreement because Netflix “was content to speak with her about a future hire and deferred to her
as to how she wanted to proceed.” (Opposition, pgs. 13-14.) However, in light of the undisputed
facts set forth above, the evidence cited by Netflix does not create a triable issue of material fact
as to interference or causation.
Netflix also appears to argue the Fixed-Term Employment Agreements, including the
Flynn Agreement violate public policy and/or are unconscionable. However, as discussed below
in detail, Netflix did not meet its burden of showing a triable issue of material fact exists as to
these defenses.
Based on the foregoing, Fox 21’s motion for summary adjudication of the inducing
breach of the Flynn Agreement cause of action is denied.
c. Unfair Competition in Violation of Business & Professions Code §17200 (3rd COA)
by Plaintiffs
Business & Professions Code §17200 provides, as follows: “As used in this chapter,
unfair competition shall mean and include any unlawful, unfair or fraudulent business act or
practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by
Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and
Professions Code.”
“‘The UCL does not proscribe specific activities, but in relevant part broadly prohibits
‘any unlawful, unfair or fraudulent business act or practice.’ ‘‘‘Because … section 17200 is
written in the disjunctive, it establishes three varieties of unfair competition—acts or practices
which are unlawful, or unfair, or fraudulent. ‘In other words, a practice is prohibited as ‘unfair’
or ‘deceptive’ even if not ‘unlawful’ and vice versa.’’’’ [Citation.]’ [Citations] (AMN
Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th 923, 949-950.) “‘By
Page 16 of 48

 proscribing ‘any unlawful’ business practice, ‘section 17200 ‘borrows’ violations of other laws
and treats them as unlawful practices’ that the unfair competition law makes independently
actionable.’’ [Citation] ‘Virtually any law—federal, state or local—can serve as a predicate for a
[UCL] action.’ [Citations] Thus, when the underlying legal claim fails, so too will a derivative
UCL claim. [Citation]” (Id. at 950.)
Business & Professions Code §17204 provides in relevant part as follows: “Actions for
relief pursuant to this chapter shall be prosecuted … by a person who has suffered injury in fact
and has lost money or property as a result of the unfair competition.” (Emphasis Added.)
To satisfy the standing requirements under the UCL, a party must “(1) establish a loss or
deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and
(2) show that that economic injury was the result of, i.e., caused by, the unfair business practice
or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court (2011)
51 Cal.4th 310, 322.).
Business & Professions Code §17203 provides, as follows: “Any person who engages,
has engaged, or proposes to engage in unfair competition may be enjoined in any court of
competent jurisdiction. The court may make such orders or judgments, including the
appointment of a receiver, as may be necessary to prevent the use or employment by any person
of any practice which constitutes unfair competition, as defined in this chapter, or as may be
necessary to restore to any person in interest any money or property, real or personal, which may
have been acquired by means of such unfair competition. Any person may pursue representative
claims or relief on behalf of others only if the claimant meets the standing requirements of
Section 17204 and complies with Section 382 of the Code of Civil Procedure, but these
limitations do not apply to claims brought under this chapter by the Attorney General, or any
district attorney, county counsel, city attorney, or city prosecutor in this state.”
Fox argues “Netflix tortiously interfered with Fox’s specified term employment contracts
with Waltenberg and Flynn,” the “first two causes of action establish that Netflix has engaged in
an unlawful business practice under Section 17200,” and “Fox is entitled to an injunction for
‘threatened future harm or [a] continuing violation.’” (Motion, pgs. 17-19.)
Fox established Netflix engaged in “unlawful, unfair or fraudulent” business acts or
practices under Business & Professions Code §17200. As discussed above, the evidence before
the Court shows Netflix induced Waltenberg and Flynn to breach their Fixed-Term Employment
Agreements with Fox.
Fox also established it has standing to pursue the unfair competition claim. As argued by
Fox, no damages analysis is required to establish UCL standing. (Supplemental Brief, pg. 5.)
(See Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758, 789 (“While Manufacturers argue that
ultimately Pharmacies suffered no compensable loss because they were able to mitigate fully any
injury by passing on the overcharges, this argument conflates the issue of standing with the issue
of the remedies to which a party may be entitled. That a party may ultimately be unable to prove
a right to damages (or, here, restitution) does not demonstrate that it lacks standing to argue for
its entitlement to them. [Citations] The doctrine of mitigation, where it applies, is a limitation on
liability for damages, not a basis for extinguishing standing. [Citation] This is so because
Page 17 of 48

 mitigation, while it might diminish a party's recovery, does not diminish the party's interest in
proving it is entitled to recovery. [¶] Nothing in the text of section 17204 or Proposition 64
suggests the voters intended to provide otherwise when they remade the UCL's standing
requirements. Rather, section 17204 requires only that a party have ‘lost money or property,’ and
Pharmacies indisputably lost money when they paid an allegedly illegal overcharge. We decline
Manufacturers’ invitation to turn this facially simple threshold condition into a requirement that
plaintiffs prove compensable loss at the outset.”).) Instead, Fox need only show “some form of
economic injury” - some “‘‘…specific, ‘identifiable trifle’ of injury.’’ [Citations]” (Kwikset
Corp. at 323, 324-325, 330, fn. 15.)12 (See also Animal Legal Defense Fund v. LT Napa Partners
LLC (2015) 234 Cal.App.4th 1270, 1279 (“Nevertheless, injury in fact is ‘not a substantial or
insurmountable hurdle’; it suffices ‘to ‘‘allege[] some specific, ‘identifiable trifle’ of injury.’’’
[Citation] ‘If a party has alleged or proven a personal, individualized loss of money or property
in any nontrivial amount, he or she has also alleged or proven injury in fact.’ [Citation]”).)
“There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1)
surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a
present or future property interest diminished; (3) be deprived of money or property to which he or she has a
cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise
have been unnecessary. [Citation] Neither the text of Proposition 64 nor the ballot arguments in support of it purport
to define or limit the concept of ‘lost money or property,” nor can or need we supply an exhaustive list of the ways
in which unfair competition may cause economic harm. It suffices to say that, in sharp contrast to the state of the law
before passage of Proposition 64, a private plaintiff filing suit now must establish that he or she has personally
suffered such harm.” (Kwikset Corp. at 323.) “‘The basic idea that comes out in numerous cases is that an
identifiable trifle is enough for standing to fight out a question of principle; the trifle is the basis for standing and the
principle supplies the motivation.’’ [Citation]” (Id. at 324, fn. 7.)

Fox submitted evidence showing it suffered economic injury as a result of Netflix’s
unfair competition in the form of out-of-pocket losses. Economic injury from unfair competition
may be shown when a plaintiff is “required to enter into a transaction, costing money or
property, that would otherwise have been unnecessary.” (Kwikset Corp. at 323.) As set forth
above, Fox submitted evidence suggesting TCFFC had to hire Domenech, a consultant, to finish
the outstanding work that Waltenberg left behind, Domenech stayed on as a consultant for three
months, and Domenech was paid approximately 23,000 pounds (for compensation and
accommodations). TCFFC’s hiring of Domenech as a consultant is sufficient to establish
standing under the UCL.
Fox also submitted evidence showing it suffered economic injury as a result of Netflix’s
unfair competition in the form of contract disruption. Economic injury from unfair competition
may be shown when a plaintiff is “deprived of money or property to which he or she has a
cognizable claim.” (Kwikset Corp. at 323.) As discussed above, the evidence before the Court
shows Netflix induced Waltenberg and Flynn to breach their Fixed-Term Employment
Agreements with Fox. It is undisputed that Waltenberg and Flynn stopped working for Fox and
went to work for Netflix before their Fixed-Term Employment Agreements with Fox expired. A
“‘contractual right’ is a textbook ‘form of property.’” (Supplemental Brief, pg. 8.) (See Estate of
Schley (1979) 100 Cal.App.3d 161, 166 (“a contractual right is not an expectancy but a chose in
action, a form of property”).) (See also United States v. State Water Resources Control Board

Page 18 of 48

 (1986) 182 Cal.App.3d 82, 147 (“Contract rights … [are] property rights”) and Walker v.
Northern San Diego County Hospital District (1982) 135 Cal.App.3d 896, 901 (“A term of
employment set by contract has been recognized as a property right which the state cannot
extinguish without conforming to the dictates of procedural due process. [Citations]”).)
Fox’s deprivation of contractual rights – property rights – is sufficient to establish
standing under the UCL. (See Lozano v. AT&T Wireless Services, Inc. (9th Cir. 2007) 504 F.3d
718, 733-734 (“The next question we address is whether these injuries are recoverable under the
UCL. The only types of relief available under the UCL actions are injunctive and restorative.
[Citations] While restoring Lozano’s overage payments, if any, fits squarely within the
restorative context of the UCL, we question whether restoring Lozano's ‘reserved’ minutes falls
into this category. Restitution in the UCL context, however, includes restoring money or
property that was not necessarily in the plaintiff's possession. The California Supreme Court has
‘stated that the concept of restoration or restitution, as used in the UCL, is not limited only to the
return of money or property that was once in the possession of that person. Instead, restitution is
broad enough to allow a plaintiff to recover money or property in which he or she has a vested
interest.’ [Citations] Here, Lozano has a vested interest in 400 free anytime minutes. Due to outof-cycle billing, however, Lozano found it necessary to reserve, and therefore lose, a certain
number of those minutes each billing period. Accordingly, we find that Lozano has properly
stated an injury that he did not receive the full value of his contract with AWS due to its alleged
failure to disclose out-of-cycle billing, and that this injury is redressable under the UCL.”) and
Pinel v. Aurora Loan Services, LLC (N.D. Cal. 2011) 814 F.Supp.2d 930, 942 (“In Plaintiff's
case, Aurora foreclosed on her Property without affording her notice of the new date of the
trustee sale and did not afford her an opportunity to cure her default, even though she had timely
made all of the required payments under the Workout Agreement. Thus, not only has Plaintiff
allegedly been deprived of the benefit of their agreement, she also lost her Property to
foreclosure. These allegations are sufficient for purposes of prudential standing under the UCL.
[Citations]”).) (Emphasis Added.)
Additionally, Fox submitted evidence showing it suffered economic injury as a result of
Netflix’s unfair competition in the form of business disruption. Economic injury from unfair
competition may be shown when a plaintiff suffers business disruption, including a diversion of
resources and other “expenditures in response to, and to counteract, the effects of the defendants’
alleged [misconduct]…” (See, Animal Legal Defense Fund at 1278-1284.) (See also Experian
Information Solutions, Inc. v. Lifelock, Inc. (C.D. Cal. 2009) 633 F.Supp.2d 1104, 1108 (“The
Court also finds that no genuine issue of material fact exists as to whether Experian has suffered
an injury in fact and lost money or property due to Lifelock's unfair business practice. Experian
clearly incurs costs each time it must process a fraud alert made by Lifelock. These costs include
the costs of allocating Experian's electronic resources and employee time, plus the maintenance
costs of Experian's toll-free telephone number and webpage used to accept fraud alert requests.
(Spalding Decl. P 4.) Experian also incurs postage and printing costs in mailing disclosure letters
to each consumer on whose behalf a fraud alert is requested. (Spalding Decl. P 5.) [¶] Overall,
the Court finds that no genuine issues of material fact exist as to Experian's UCL claim. Experian
has established that Lifelock engages in an unfair business practice and that Experian has
suffered an injury in fact and lost money or property because of that practice, and Experian is
entitled to partial summary judgment of its UCL claim.”); Sarun v. Dignity Health (2014) 232
Cal.App.4th 1159, 1169 (“Moreover, the Meyer Court…also explained that incurring transaction
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 costs to avoid the consequences of a deceptive practice ‘falls within the broad meaning of
suffering ‘any damage as a result of the use or employment’ of an unlawful practice, whether or
not those transaction costs are cognizable as ‘actual damages.’’ [Citation] Sarun was faced with
just such transaction costs: To avoid the consequences of its allegedly unlawful ‘full charges’
pricing structure for uninsured emergency care patients, Dignity required Sarun to apply for
financial assistance, including providing tax return information and other personal financial data.
The tangible burden of such an application process is far more than the ‘identifiable trifle’
required to confer injury in fact standing.”); and Khan v. 7-Eleven, Inc. 2015 WL 12781203, *2
(“Thus, alleging a decline in sales due to poor management caused by Defendant's conduct is
sufficient to plead economic injury. Moreover, Plaintiff's allegation that he had to hire and pay
more workers to cover his duties is also adequate to show economic injury in that Defendant's
alleged conduct required him to hire employees, costing him money that would otherwise not
have been spent for this purpose.”).)
For example, Fox submitted evidence suggesting it had to divert organizational resources
after Flynn left and redistribute shows Flynn was overseeing, and Waltenberg’s supervisor had to
“backfill” and “step in” when he left. (Fox’s Separate Statement No. 23, pg. 20 - Declaration of
Lens ¶75, Exhibit 74, Deposition of Salke 399:4-400:8, 402:2-6, 441:24-453:14.) (Fox’s
Separate Statement No. 23, pg. 20 - Declaration of Lens ¶76, Exhibit 75, Deposition of Pearson
136:2-137:8.) (Fox’s Separate Statement No. 11, pg. 10 - Declaration of Lens ¶74, Exhibit 73,
Deposition of Roca 161:4-162:19.)
Netflix, in supplemental briefing, argues there are disputed facts regarding whether Fox
suffered monetary loss. Netflix argues Fox’s claimed out-of-pocket costs do not constitute
economic injury because Fox “failed to establish as an undisputed fact that it actually incurred
any costs over and above what it would have incurred to obtain the services contracted from
Waltenberg and Flynn.” (Supplemental Opposition, pg. 3.) Netflix contends “Fox would have
spent even more on salary for those same services had Waltenberg remained at Fox” and,
moreover, “Carlos Castillo, the Fox employee who ultimately took over for Waltenberg,
performed the same duties at a lower salary.” (Supplemental Opposition, pg. 4.) Netflix argues
Fox did not suffer monetary harm and, instead, saved money while receiving the equivalent
services. (Supplemental Opposition, pg. 4.) According to Netflix, “Fox incurred no cost that it
would not otherwise have incurred to obtain the contracted services,” that is “because, regardless
of who performed those services, Fox would have had to pay for them.” (Supplemental
Opposition, pg. 4.)
In making the foregoing arguments, Netflix improperly assumes the quality of the
services performed by the replacements, including Domenech and Castillo, are equal to those of
Waltenberg and Flynn. There is no evidence to support such an assumption. Moreover, it is
disingenuous for Netflix to argue Fox’s replacements were on equal footing with Flynn and
Waltenberg given the high value Netflix placed on Flynn and Waltenberg as evidenced by the
fact that Netflix solicited Flynn and Waltenberg, offered to indemnify them, and doubled their
salaries in order to induce them to breach their agreements with Fox and go to work for Netflix.
Also, it is unreasonable to assume there would be no business disruption by the loss of such
highly valued employees. Further, Netflix does not appear to dispute that Fox hired Domenech
as a consultant to finish the outstanding work that Waltenberg left behind and Domenech was
paid approximately 23,000 pounds. Additionally, as argued by Fox, the court “cannot consider
whether purported savings offset the costs Fox incurred due to Netflix’s interference. Netflix’s
Page 20 of 48

 claim that its tortious interference helped Fox ‘save money’ is thus wholly irrelevant.”
(Supplemental Reply, pg. 6.) (See Clayworth at 789 (“The doctrine of mitigation, where it
applies, is a limitation on liability for damages, not a basis for extinguishing standing. [Citation]
This is so because mitigation, while it might diminish a party's recovery, does not diminish the
party's interest in proving it is entitled to recovery.”).) (See also Sarun at 1169.)
Netflix argues Fox failed to establish an undisputed fact that it suffered any property loss.
(Supplemental Opposition, pgs. 5-6.) Netflix argues that employment contracts for “staff”
employees are not considered property. (Opposition, pg. 5.) Netflix contends that “Fox cannot
have a property interest in a promise that Waltenberg and Flynn would continue to work for Fox
for years in the future because enforcing such a promise would again violate the Thirteenth
Amendment and California law, specifically Civil Code §3390. However, Fox’s claim of
standing is not based on a property interest in Waltenberg and Flynn. Fox’s claim of standing is
based on its contractual rights with respect to the Waltenberg and Flynn Agreements. The
argument is that Waltenberg and Flynn would have continued to work for Fox under the FixedTerm Employment Agreements but for Netflix’s interference. Netflix did not cite to on-point
case law or authority to suggest that contractual rights under employment agreements are not
property. Moreover, as argued by Fox, Netflix did not cite to authority showing that “the loss of
contract rights fails to satisfy UCL standing.” (Supplemental Reply, pg. 7.) Netflix also appears
to argue that there can be no property interest in an employment agreement if an employer
cannot seek injunctive relief against the employee. (Supplemental Opposition, pg. 6.) However,
as argued by Fox, the “availability of injunctive relief is immaterial and does not negate a
property interest.” (Supplemental Reply, pg. 7.)
Additionally, Netflix argues Fox cannot establish the predicate acts for its UCL claim.
Specifically, Netflix argues that because summary adjudication was denied as to the inducing
breach of contract claims, it must also be denied as to the derivative UCL claim. (Supplemental
Opposition, pgs. 1, 6-7.) However, as discussed above, the evidence before the court shows
Netflix induced Waltenberg and Flynn to breach their Fixed-Term Agreements with Fox. The
only reason the court denied Fox’s motion for summary adjudication of the inducing breach of
contract causes of action is because there are triable issues of material fact as to resulting
damages.13 The cases cited by Netflix do not involve situations where a UCL claim failed solely
because damages were not established with respect to the predicate claims. (See AMN
Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th 923, Van Patten v.
(See De La Torre v. CashCall (2018) 5 Cal. 5th 966, 980 (“But plaintiffs are neither bringing a cause of action
under the California Financing Law (Fin. Code, § 22000) nor seeking remedies under that division. Instead,
plaintiffs advance an unfair competition claim under the UCL. The claim is premised on unlawful business conduct,
which section 17200 of the UCL proscribes. [Citations] By prohibiting unlawful business practices, ‘‘section 17200
‘borrows’ violations of other laws and treats them as unlawful practices’ that the unfair competition law makes
independently actionable.’ [Citation] In this case, section 22302 supplies the requisite ‘violations of other laws’ by
making ‘[a] loan found to be unconscionable’ a violation of the California Financing Law. [Citation] The UCL, in
turn, makes that violation ‘independently actionable.’ [Citation] So the fact that section 22302 does not provide for
a private cause of action is immaterial since ‘it is in enacting the UCL itself, and not by virtue of particular predicate
statutes, that the Legislature has conferred upon private plaintiffs ‘specific power’ [citation] to prosecute unfair
competition claims.’ [Citation] Similarly, it does not matter that plaintiffs cannot recover the remedies made
available under section 22302. Plaintiffs are not praying for remedies under section 22302. They are seeking UCL
remedies—restitution and injunctive relief—which are recoverable ‘cumulative’ of any other remedies.
[Citations]”).)
13

Page 21 of 48

 Vertical Fitness Group, LLC (S.D. Cal. 2014) 22 F.Supp.3d 1069, and Boorstein v. CBS
Interactive, Inc. (2013) 222 Cal.App.4th 456.) Moreover, as argued by Fox, its “UCL claim does
not depend on proof of damages for tortious interference.” (Supplemental Reply, pg. 8.) As
discussed above, no damages analysis is required to establish UCL standing. Fox only needed to
establish some form of economic injury, which, as discussed above in detail, Fox did.
Netflix also argues that its “to-be-amended affirmative defenses may provide a complete
defense to the UCL claim.” (Supplemental Opposition, pg. 7.) However, Netflix, since making
this argument, filed a second amended answer. As discussed below in detail, Netflix did not
submit admissible evidence creating a triable issue of material fact as to the violation of public
policy and unconscionability defenses.
The court finds Fox is entitled to injunctive relief. Injunctive relief under the UCL
“requires a threat that the misconduct to be enjoined is likely to be repeated in the future.”
(Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 465.) There can be no dispute that
Netflix will likely interfere with Fox’s valid Fixed-Term Employment Agreements in the future
if the misconduct is not enjoined. Netflix has taken the position that Fox’s Fixed-Term
Employment Agreements violate Business & Professions Code §16600, Civil Code §§3390 and
3423, Labor Code §2855, and/or C.C.P. §526, and/or are unconscionable. However, Netflix’s
blanket position is unsupported. As discussed above, Fox already established Netflix induced
breach of the Flynn and Waltenberg Agreements. Moreover, Netflix continues to recruit and hire
employees subject to Fixed-Term Employment Agreements with Fox. Netflix does not appear to
dispute that from between the date of Fox’s complaint and August 31, 2018, Netflix offered
employment to 14 individuals who were employed pursuant to specified-term contracts with
TCFFC or Fox 21 that had not yet expired at the time Netflix made the offer, and that between
the date of Fox’s complaint and August 31, 2018, Netflix hired 8 individuals who were
employed pursuant to specified-term contracts with TCFFC or Fox 21 that had not yet expired at
the time Netflix hired them. (Netflix’s Response to Fox’s SS No. 25, pgs. 41-42.) (Netflix’s
Response to Fox’s SS No. 26, pg. 44.)14 Netflix will likely continue to solicit employees subject
to Fixed-Term Employment Agreements with Fox and/or induce such employees to breach their
Fixed-Term Employment Agreements with Fox, without making a proper determination as to
whether each separate Fixed-Term Employment Agreement violates Business & Professions
Code §16600, Civil Code §§3390 and 3423, Labor Code §2855, and/or C.C.P. §526, and/or is
unconscionable. Further, as discussed below in detail, the Flynn and Waltenberg Agreements, as
well as, the Fixed-Term Employment Agreements with the same challenged provisions, do not
violate public policy, are not unconscionable, and any offending provision(s) can be severed.
Fox’s Fact No. 25 states: “Between the date of Fox’s Complaint and August 31, 2018, Netflix offered
employment to 14 individuals who were employed pursuant to specified-term contracts with TCFFC or Fox 21 that
had not yet expired at the time Netflix made the offer.” Netflix, in response, did not dispute this fact. Instead,
Netflix disputed whether the contracts were valid and enforceable. (Netflix’s Response to Fox’s SS No. 25, pgs. 4144.)
14

Fox’s Fact No. 26 states: “Between the date of Fox’s Complaint and August 31, 2018, Netflix hired 8 individuals
who were employed pursuant to specified-term contracts with TCFFC or Fox 21 that had not yet expired at the time
Netflix hired them.” Netflix, in response, did not dispute this fact. Instead, Netflix disputed whether the contracts
were valid and enforceable. (Netflix’s Response to Fox’s SS No. 26, pgs. 44-45.)

Page 22 of 48

 Based on the foregoing, Fox’s motion for summary adjudication of the unfair competition
in violation of Business & Professions Code §17200 cause of action is granted.15 The court finds
Fox is entitled to injunctive relief, as follows: Netflix shall not solicit employees who are subject
to valid Fixed-Term Employment Agreements with Fox or induce such employees to breach
their valid Fixed-Term Employment Agreements with Fox.
2. Second Amended Answer
a. Violation of Public Policy (3rd AD)
As discussed above, Netflix’s second amended answer contains a violation of public
policy affirmative defense. Netflix’s violation of public policy affirmative defense is based on
alleged violations of and/or violations of the policies supporting Business & Professions Code
§16600, Civil Code §§3390 and 3423, Labor Code §2855, and C.C.P. §526. Netflix alleged
Fox’s Fixed-Term Employment Agreements also contain one-sided, overbroad, and/or illegal
provisions that permeate the agreements, including the unilateral options, injunctive relief
provisions, non-solicitation provisions, confidentiality provisions, and “no-shop” provisions.
1. Injunctive Relief Provisions
Business & Professions Code §16600 provides, as follows: “Except as provided in this
chapter, every contract by which anyone is restrained from engaging in a lawful profession,
trade, or business of any kind is to that extent void.”
“In its typical application, section 16600 invalidates certain far-reaching postemployment
covenants not to compete. [Citation]” (Fowler v. Varian Associates, Inc. (1987) 196 Cal.App.3d
34, 44.)16 (See USS-Posco Industries v. Case (2016) 244 Cal.App.4th 197, 208 (“We agree with
the reasoning of Hassey and, likewise, conclude Case has no claim under Business and
Professions Code section 16600. He voluntarily agreed to participate in the training program and
understood UPI would front all the costs of the Learner Program and expected reimbursement of
training costs if he chose to leave within 30 months of completing the program. This was an
agreement concerning advanced educational costs. It did not restrain Case from working for a
competitor or any other entity. Indeed, Case quit UPI and went to work elsewhere, and he was
entirely free to do so. He had also agreed to reimburse UPI for the costs it fronted for his
advanced training, a benefit Case retained despite his departure.”).) (Emphasis Added.)
“Business and Professions Code section 16600 has consistently been interpreted as
invalidating any employment agreement that unreasonably interferes with an employee's ability
to compete with an employer after his or her employment ends. [Citation] However, the statute
This court’s ruling does not impact Netflix’s ability to argue Fox’s other Fixed-Term Employment Agreements
violate public policy and/or are unconscionable.
15

The court notes that “agreements designed to protect an employer’s proprietary information do not violation
section 16600. [Citation]” (Fowler at 44.)
16

Page 23 of 48

 does not affect limitations on an employee's conduct or duties while employed.” (Angelica
Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 509.)17
Civil Code §3390 provides, in pertinent part, that an obligation to employ another in
personal service cannot be specifically enforced.
Civil Code §3423 provides, in pertinent part, as follows:
An injunction may not be granted:
***
(e) To prevent the breach of a contract the performance of which would not be
specifically enforced, other than a contract in writing for the rendition of personal
services from one to another where the promised service is of a special, unique,
unusual, extraordinary, or intellectual character, which gives it peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law, and where the compensation for the personal services is as
follows…
C.C.P. §526(b) provides, in pertinent part, that an injunction cannot be granted to
“prevent the breach of a contract the performance of which would not be specifically enforced,
other than a contract in writing for the rendition of personal services from one to another where
the promised service is of a special, unique, unusual, extraordinary, or intellectual character,
which gives it peculiar value, the loss of which cannot be reasonably or adequately compensated
in damages in an action at law, and where the compensation for the personal services is as
follows…”18
Netflix did not sustain its burden of showing the injunctive relief provisions violate
public policy. It is undisputed the Waltenberg Agreement, the 2013 Flynn Agreement, and other
Fixed-Term Employment Agreements contain the following injunctive relief provision:
The services to be furnished by you hereunder and the rights and privileges
granted to the Company by you are of a special, unique, unusual, extraordinary,
and intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and a breach by you of any of the provisions contained herein will cause the
Company irreparable injury and damage. You expressly agree that the Company
shall be entitled to seek injunctive and other equitable relief to prevent a breach
of this Agreement by you. Resort to such equitable relief, however, shall not be
construed as a waiver of any proceeding or succeeding breach of the same or any
The court notes that “[w]hatever interest society has in encouraging free and open competition by means not in
themselves unlawful, contractual stability is generally accepted as of greater importance than competitive freedom.”
(Imperial Ice Company v. Rossier (1941) 18 Cal.2d 33, 36.)
17

18

Case law suggests the special and unique language in Labor Code §2855, Civil Code §3423, and C.C.P. §526
pertains to artists, musicians, or performers that have achieved distinction or star quality. (See Motown Record
Corp. v. Brockert (1984) 160 Cal.App.3d 123, 137-138, Paramount Pictures Corp. v. Holden (S.D. Cal. 1958) 166
F.Supp 684, 688, and Lemat Corp. v. Barry (1969) 275 Cal.App.2d 671, 678.)

Page 24 of 48

 other term or provision. The various rights and remedies of the Company
hereunder shall be construed to be cumulative and no one of them shall be
exclusive of any other or of any right or remedy allowed by law.
(Netflix’s Response to Fox’s SS, pgs. 63-65, Nos. 29-30.) (Netflix’s Response to Fox’s
Supplemental SS, pg. 3, 135-136, 269, Nos. 2, 36, and 59.) (Emphasis Added.)
The injunctive relief provisions in the Waltenberg Agreement, 2013 Flynn Agreement,
and other Fixed-Term Employment Agreements do not violate Business & Professions Code
§16600. As set forth above, the statute does not “affect limitations on an employee’s conduct or
duties while employed.” (Angelica Textile Services, Inc. at 509.) The injunctive relief provisions
are essentially limitations on the employees’ conduct or duties while employed. The provisions
refer to injunctive relief to prevent a breach of the agreements, which suggests the provisions
apply while the employees are still employed (i.e. before any breach occurs). Moreover, as
argued by Fox, the injunctive relief provisions do not, in fact, restrain anyone. Fox, by way of
the injunctive relief provisions, merely reserved the right to seek injunctive relief. (Motion, pg.
21.) Further, the injunctive relief provisions are irrelevant to the injunctive relief Fox seeks in
this action. Fox represents it “does not seek, and has never sought, injunctive relief against
Flynn or Waltenberg” and “has never sought injunctive relief against any breaching employee.”
(Reply, pgs. 6-7.)19
The injunctive-relief provisions also do not, on the face of the Fixed-Term Employment
Agreements, violate Civil Code §§3390 and 3423 or C.C.P. §526.
Netflix, relying on Edwards v. Arthur Anderson LLP (2008) 44 Cal.4th 937 and Golden v.
California Emergency Physicians Medical Group (9th Cir. 2015) 782 F.3d 1083, appears to argue
Fox’s Fixed-Term Employment Agreements violate Business & Professions Code §16600 and
“California’s ‘settled legislative policy in favor of open competition and employee [mobility].’”
(Opposition, pgs. 10-13, 17.) (Second Supplemental Opposition, pgs. 3-10.) However, as
discussed below in detail, Netflix’s reliance on Golden and Edwards is misplaced.
Golden is not binding on this court and, in any event, is distinguishable. Golden involved
a “no-employment provision” in a settlement agreement. (Golden at 1084-1085.) “The noemployment provision expresse[d] the parties’ agreement ‘that…Golden shall not be entitled to
work or be reinstated at any CEP-contracted facility or at any facility owned or managed by
CEP.’” (Id. at 1085.) The provision “waive[d] any right Dr. Golden otherwise may have to
continue or to regain previous or current employment with CEP” and “provide[d] that ‘if CEP
contracts to provide services to, or acquires rights in, a facility that is an emergency room…at
which Golden is employed or rendering services, CEP has the right to and will terminate Golden
from any work in the emergency room without any liability whatsoever.’” (Id.) In contrast, the
injunctive relief provisions at issue in this action do not require Waltenberg, Flynn, or other
employees to waive their rights to continue or regain previous or current employment with Fox
In the ruling on Netflix’s motion for summary adjudication, the court stated: “The court sees a critical distinction
between an injunction directed at Fox employees, which would implicate the unique or intellectual character
requirement of Civil Code §3423, and an injunction directed at a third party, Netflix, to prevent tortious inducement
of breach of contract. In the latter situation, Fox employees are free to leave to work elsewhere (absent tortious
interference), which is the policy behind Civil Code §3423.” (Court’s 6/5/19 Ruling.)
19

Page 25 of 48

 and do not give Fox the right to terminate the employment of Waltenberg, Flynn, or other
employees without any liability whatsoever. Moreover, in Golden, the United States Court of
Appeals for the Ninth Circuit, did not even determine whether the “no-employment provision”
violated Business & Professions Code §16600. The court remanded the case to the district court
to “determine in the first instance whether the no-employment provision constitutes a restraint of
a substantial character to Dr. Golden’s medical practice.” (Id. at 1093.)20
Edwards involved “a more traditional variety of non-compete covenants – an
employment agreement forbidding a certified public accountant from poaching Arthur
Anderson’s clients and personnel after leaving the firm.” (Id. at 1091.) (See Edwards at 942.)
The California Supreme Court concluded the non-competition agreement was invalid, stating:
As the Court of Appeal observed, “The first challenged clause prohibited Edwards, for an
18-month period, from performing professional services of the type he had provided
while at Andersen, for any client on whose account he had worked during 18 months
prior to his termination. The second challenged clause prohibited Edwards, for a year
after termination, from ‘soliciting,’ defined by the agreement as providing professional
services to any client of Andersen's Los Angeles office.” The agreement restricted
Edwards from performing work for Andersen's Los Angeles clients and therefore
restricted his ability to practice his accounting profession. [Citation] The noncompetition
agreement that Edwards was required to sign before commencing employment with
Andersen was therefore invalid because it restrained his ability to practice his profession.
[Citation]
(Id. at 948.) The court also refused to adopt a “narrow-restraint exception to section 16600” and
left it to the “Legislature, if it chooses, either to relax the statutory restrictions or adopt additional
exceptions to the prohibition-against-restraint rule under section 16600.” (Id. at 949-950.) In
contrast to Edwards, the Fixed-Term Employment Agreements at issue in the instant action do
not contain non-compete covenants.21 In fact, it is undisputed that the Waltenberg Agreement
and Flynn’s 2015 Agreement do not bar Waltenberg and Flynn from pursuing at any time postcontract expiration employment opportunities. (Netflix’s Response to Fox’s Supplemental SS,
pgs. 5, 84, 138, 218, 319, 322.)
The court stated: “In determining a contract’s validity under section 16600, therefore, the court should direct its
inquiry according to the actual statutory language: whether the challenged provision ‘restrain[s anyone] from
engaging in a lawful profession, trade, or business of any kind.’ Cal. Bus. & Prof. Code § 16600. This prohibition
extends to any ‘restraint of a substantial character,’ no matter its form or scope. [Citation] The statutory context of
section 16600 furthermore suggests that the prohibition on professional restraints extends to a larger category of
contracts than simply those where the parties ‘agree . . . to refrain from carrying on a similar business within a
specified geographic area.’ [Citations]” (Id. at 1092.)
20

Netflix’s reliance on AMN. is also misplaced. (Opposition, pgs. 10 and 19.) AMN involved a non-solicitation of
employee provision. (AMN at 936.) The California Court of Appeal, Fourth Appellate District Division One,
concluded the provision was void under Business & Professions Code §16600. The court reasoned: “the broadly
worded provision prevents individual defendants, for a period of at least one year after termination of employment
with AMN, from either ‘directly or indirectly’ soliciting or recruiting, or causing others to solicit or induce, any
employee of AMN. This provision clearly restrained individual defendants from practicing with Aya their chosen
profession—recruiting travel nurses on 13-week assignments with AMN. [Citations]” (Id.) (Emphasis Added.)
Waltenberg and Flynn are not recruiters and the Fixed-Term Employment Agreements do not restrain them from
practicing their chosen professions.
21

Page 26 of 48

 Netflix also argues Business & Professions Code §16600 does not bar only post-term
covenants not to compete. (Second Supplemental Opposition, pgs. 5-7.) First, Netflix argues
“Angelica Textile cannot be read to give a blessing under Section 16600 to fixed-term
employment contracts that purport to (a) limit an employee’s ability to quit, and/or (b) stop her
from working anywhere else during the contract term” because the case did not involve a fixedterm contract. (Second Supplemental Opposition, pgs. 3-5.) Second, Netflix argues “there is no
hard-and-fast rule that [Business & Professions Code §16600] cannot invalidate in-term
employment restrictions when they are sufficiently oppressive,” it would be odd if every
conceivable in-term restriction was fair game in light of the “all-encompassing language” of
Business & Professions Code §16600, and courts have specifically held that Business &
Professions Code §16600 can prohibit in-term restrictions, including in the employment context.
(Second Supplemental Opposition, pgs. 5-7.) However, the California Court of Appeal, Fourth
Appellate District, Division One, in Angelica Textile Services, Inc., clearly stated that Business
& Professions Code §16600 “does not affect limitations on an employee’s conduct or duties
while employed.” (Angelica Textile Services, Inc. at 509.) The court did not distinguish between
at-will and fixed-term employment. As discussed above, the injunctive relief provisions in the
Fixed-Term Employment Agreements are essentially limitations on the employees’ conduct or
duties while employed.
Moreover, the federal cases cited by Netflix are not binding on this court and, in any
event, are distinguishable because they involve non-compete or no-employment clauses limiting
the right to pursue lawful employment or restraining lawful employment. (See ITN Flix, LLC v.
Hinojosa (9th Cir. 2017) 686 Fed. Appx. 441, 443-444 (agreement not to play other vigilante
characters), Steinberg Moorad & Dunn, Inc. v. Dunn (9th Cir. 2005) 136 Fed. Appx. 6, *10 (noncompetition clause), and Goldon at 1084-1085 (no-employment provision).) In the instant action,
the injunctive relief provisions do not and did not prevent Waltenberg, Flynn, or any other
employees from leaving Fox and/or pursing lawful employment. In fact, Waltenberg, Flynn and
at least eight other former Fox employees actually left Fox for positions at Netflix.
Additionally, in the second supplemental opposition, Netflix, relying on D’Sa v. Playhut,
Inc. (2000) 85 Cal.App.4th 927, appears to argue that inclusion of the injunctive-relief provision
“sends a powerful ‘or else’ message to all Fox employees.” (Second Supplemental Opposition,
pg. 8.) However, Netflix’s reliance on D’Sa is misplaced. The case does not apply here. In
D’Sa, the California Court of Appeal, Second Appellate District, Division Three, held that “an
employer cannot lawfully make the signing of an employment agreement, which contains an
unenforceable covenant not to compete, a condition of continued employment ….” (Id. at 496.)
The Court of Appeal further held “that an employer’s termination of an employee who refuses to
sign such an agreement constitutes a wrongful termination in violation of public policy.” (Id.)
The Court of Appeal recognized “there exists a clear legislative declaration of public policy
against covenants not to compete.” (Id. at 499.)
In contrast to D’Sa, the instant action does not involve a covenant not to compete or
termination of employment for refusal to sign an agreement that contained a covenant not to

Page 27 of 48

 compete.22 As discussed above, the injunctive relief provisions in the executed Fixed-Term
Employment Agreements do not violate Business & Professions Code §16600. Moreover, it is
undisputed that the Waltenberg Agreement and Flynn’s 2015 Agreement do not bar Waltenberg
and Flynn from pursuing at any time post-contract-expiration employment opportunities.
(Netflix’s Response to Fox’s Supplemental Separate Statement, pgs. 5 and 138, Nos. 5 and 35.)
Netflix also argues the Limited-Term Employment Agreements do not have a
“resignation provision,” absent such a provision, “an employee wishing to leave Fox must breach
his or her contract,” and any “such breach (or attempt to breach)…triggers the contract’s
injunctive-relief provision, which purports to allow Fox to dragoon the employee back into its
ranks and enjoin any other breach of contract.” (Second Supplemental Opposition, pg. 7.)
However, Netflix did not cite any on-point case law or authority to support the need for a
resignation provision. Moreover, as argued by Fox, “requiring ‘resignation provisions’ would
[essentially] turn fixed-term contracts into at-will agreements.” (Second Supplemental Reply,
pg. 9.) (Emphasis Added.) (Compare Labor Code §§2922 (“An employment, having no specified
term, may be terminated at the will of either party on notice to the other. Employment for a
specified term means an employment for a period greater than one month.”) and 2925 (“An
employment for a specified term may be terminated by the employee at any time in case of any
wilful or permanent breach of the obligations of his employer to him as an employee.”).) (See
also Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 335 (“An at-will employment may be
ended by either party ‘at any time without cause,’ for any or no reason, and subject to no
procedure except the statutory requirement of notice. [Citations]”).) Further, employers and
employees can agree to lawful limitations on termination rights. (See Guz at 336 (Labor Code
§2922 “does not prevent the parties from agreeing to any limitation, otherwise lawful, on the
employer’s termination rights. [Citation]…[¶]…[T]he parties are free to define their relationship,
including the terms on which it can be ended, as they wish. The parties may reach any contrary
understanding, otherwise lawful, ‘concerning either the term of employment or the grounds or
manner of termination.’ [Citation]” ).) As argued by Fox, the parties “are…free to bargain for a
‘resignation provision’…, but they are also free not to, and the absence of such a provision does
nothing to render employment contracts invalid.” (Supplemental Reply Brief, pg. 9.)
Netflix further argues the injunctive relief provisions do, in fact, restrain employees, as
evidenced by the Civil Code §3423 language included in the provisions. (Supplemental
Opposition, pgs. 7-8.) However, Netflix did not cite on-point case law or authority to suggest
that inclusion of the Civil Code §3423 language was confusing or misleading to Fox’s
employees, including Flynn and Waltenberg, and/or the inclusion of the Civil Code §3423
language renders the injunctive-relief provision a de facto non-compete provision. Flynn and
Waltenberg did not appear to view the injunctive relief provision as a non-compete provision.
Flynn, Waltenberg, and at least eight others actually left Fox – mid-contracts - to work for
Netflix.

The Court of Appeal in D’Sa did not address the issue of “whether defendants could enforce any part of this
noncompetition clause if plaintiff had signed and returned the agreement in a timely manner, continued in his
employment, and later left that employment…” (Id. at 498.) The only issue before the Court of Appeal was “whether
defendants [could] make plaintiff’s acceptance of the agreement a condition of his continued employment by firing
him when he refused to sign it,” and the Court of Appeal held “they cannot.” (Id.)
22

Page 28 of 48

 Finally, Netflix argues a “breach does not nullify the injunctive-relief provision” because
“contracts imposing duties for ‘a specified term’ can be subject to ‘continuous’ or successive
breach.” (Supplemental Opposition, pgs. 8.) However, the cases cited by Netflix do not support
a finding that the injunctive relief provisions are somehow void.
Even assuming, arguendo, the injunctive relief provisions in the Fixed-Term Employment
Agreements violate Business & Professions Code §16600 and/or are void for any other reasons,
the Fixed-Term Employment Agreements are still valid as to the remaining lawful terms. The
offending provision(s) can be severed. The injunctive relief provisions are collateral to the main
purpose of the Fixed-Term Employment Agreements, which is to employ the employees for
specified terms and at set levels of compensation. (See Civil Code §1599 (“Where a contract has
several distinct objects, of which one at least is lawful, and one at least is unlawful, in whole or
in part, the contract is void as to the latter and valid as to the rest.”).) (See also Winston Research
Corp. v. 3 M (9th Cir. 1965) 350 F.2d 134, 140, fn. 4 (“The employment agreements contained a
provision restricting the right of the employee to work for a competitor of Mincom after
termination of employment, contrary to Cal.Bus. & Prof.Code § 16600. But as the district court
held, under California law the void provision was severable and the remainder of the contract
fully enforceable. [Citation] As we note later, we also agree with the district court that in the
circumstances of this case use in California of contracts containing this unenforceable provision
did not require the court to deny Mincom equitable relief for unclean hands.”).)
Netflix, relying on Latona v. Aetna United States Healthcare (C.D. Cal. 1999) 82
F.Supp.2d 1089, argues severance is unavailable because Fox “uses contracts to ‘control’ its
employees by preventing them from exploring other opportunities or testing their market value to
improve their negotiating position” and the “unlawful and misleading contract terms, including
the injunctive relief provision, further that overall purpose by creating an in terrorem effect on
Fox employees who, fearing litigation and ‘tend[ing] to assume that the contractual terms
proposed by their employer…are legal, if draconian,’ will not test the provision by attempting to
leave Fox.” (Opposition, pgs. 12-13.)
Latona involved a “Non-Compete and Confidentiality Agreement” (“Agreement”). (Id.
at 1090.) The Agreement contained a non-compete clause and a confidentiality clause. (Id. at
1091.) Aetna asked its employees to sign the agreement, the plaintiff refused, and Aetna
terminated plaintiff’s employment. (Id. at 1090-1091.) The plaintiff sued Aetna for violating
Business & Professions Code §16600. The United States District Court determined the
exceptions to Business and Professions Code §16600 did not apply. (Id. at 1094-1096.) The
court also noted:
…defendant's argument, that the Agreement cannot violate public policy because
even if unenforceable, it is simply a nullity, ignores the realities of the
marketplace. As between Aetna and an individual employee, the company is in an
infinitely better position to acquaint itself with the applicable laws, and to know
whether the non-compete clause violates section 16600. Employees, having no
reason to familiarize themselves with the specifics of California's employment
law, will tend to assume that the contractual terms proposed by their employer
(especially one of Aetna's magnitude) are legal, if draconian. Furthermore, even if
they strongly suspect that a non-compete clause is unenforceable, such employees
Page 29 of 48

 will be reluctant to challenge the legality of the contractual terms and risk the
deployment of Aetna's considerable legal resources against them. Thus, the in
terrorem effect of the Agreement will tend to secure employee compliance with
its illegal terms in the vast majority of cases. Prospective future employers, too,
may be reluctant to hire Aetna's workers; even if secure in the knowledge of the
unenforceability of Aetna's non-compete clause, these employers may well wish
to avoid the expense and energy of defending a lawsuit in which they are likely to
be joined. [Citations] In this way Aetna will be able to stifle marketplace
competition for its human capital. This outcome is clearly in derogation of the
fundamental public policy interests that section 16600 was intended to advance.
(Id. at 1096-1097.) The court determined the severability clause did not save the Agreement.
The court noted “Aetna has emphasized throughout the litigation, the contract was never signed,
Ms. Latona enjoyed no benefit from it, and Aetna never sought to enforce it against her.” (Id. at
1097.) The court recognized the case presented “a wholly different issue: whether an employer
may fire an employee for refusing to sign an agreement containing provisions in direct violation
of public policy, then escape liability for wrongful termination on the grounds that the other
provisions of the agreement were inoffensive.” The court answered “no.” (Id.) The court stated
“Aetna never gave plaintiff the option of signing only a portion of the Agreement,” she “was
required to sign it in its entirety, complete with the illegal provisions,” Aetna could have revised
the Agreement but did not, Aetna presented the Agreement to the plaintiff as a “take it or leave
it” proposition,” and, when she declined, Aetna fired her. The court ruled Aetna could not be
relieved “of liability for a wrongful termination on the ground that if it had excised the offensive
portions of the Agreement, plaintiff would have had no grounds to object to signing it.” (Id.)
The court found “that the unenforceability of the Agreement [could not] be saved by the
severability clause.” (Id. 1097-1098.)
However, Netflix’s reliance on Latona is misplaced. That case is distinguishable and is
not binding on this court. As set forth above, the issue before the court in Latona was “whether
an employer may fire an employee for refusing to sign an agreement containing provisions in
direct violation of public policy, then escape liability for wrongful termination on the grounds
that other provisions of the agreement were inoffensive.” (Id. at 1097.) The instant action does
not involve the wrongful termination of an employee for refusing to sign an agreement
containing non-compete provisions that violate public policy. Rather, the instant action involves
signed Fixed-Term Employment Agreements. There is no dispute that Flynn and Waltenberg
executed the agreements with Fox. Moreover, this action does not involve non-compete clauses.
The Fixed-Term Employment Agreements contain injunctive relief provisions, which Netflix
claims are invalid. Further, as discussed above, the injunctive relief provisions in the Fixed-Term
Employment Agreements, unlike the Agreement in Latona, apply while the employees are still
employed and do not, in fact, restrain anyone. Also, as discussed above, the injunctive relief
provisions in the Flynn and Waltenberg Agreements are collateral to the main purpose of the
Fixed-Term Employment Agreements, which is to employ the employees for specified terms and
at set levels of compensation.
The fact that Fox included the injunctive relief provisions in their Fixed-Term
Employment Agreements is insufficient to render the entire agreements unenforceable,
especially considering Fox represents it “does not seek, and has never sought, injunctive relief
Page 30 of 48

 against Flynn or Waltenberg” and “Fox has never sought injunctive relief against any breaching
employee.” (Reply, pgs. 6-7.) (See Winston Research Corp. at 141.)
Netflix also argues that severance cannot cure the illegality of Fox’s contracts. (Second
Supplemental Opposition, pgs. 10-11); however, Netflix did not establish the “central purpose of
the contract[s] is tainted with illegality.” (Second Supplemental Opposition, pg. 10.) (See
Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 124 (“The basic
principles of severability that emerge from Civil Code section 1599 and the case law of illegal
contracts appear fully applicable to the doctrine of unconscionability. Courts are to look to the
various purposes of the contract. If the central purpose of the contract is tainted with illegality,
then the contract as a whole cannot be enforced. If the illegality is collateral to the main purpose
of the contract, and the illegal provision can be extirpated from the contract by means of
severance or restriction, then such severance and restriction are appropriate.”).)
Finally, Netflix argues the interlocking restrictions in the Fixed-Term Employment
Agreements render the agreements invalid under Business & Professions Code §16600,
specifically the injunctive-relief provision, unilateral option, “no-shop” provision, nonsolicitation provision, and confidentiality provision. (Supplemental Opposition, pgs. 7-10.)
However, as discussed in the Court’s ruling, the provisions are lawful and/or can be severed.
2. Unilateral Options
Netflix failed to sustain its burden of showing the unilateral options violate public policy.
The Waltenberg Agreement, the Flynn Agreement, and other Limited-Term Employment
Agreements contain options, exercisable at Fox’s discretion. (Netflix’s Response to Fox’s
Supplemental SS, pgs. 3, 135, and 268, Nos. 1, 31, and 58.) There is nothing before the court to
show that unilateral options automatically violate public policy. Instead, California case law
suggests the use of unilateral options in employment contracts is permitted under certain
circumstances. (See Lemat Corp. v. Barry (1969) 275 Cal.App.2d 671, 676-677 (“Lemat first
argues that the court erred in granting injunctive relief for only the one year remaining of the
two-year term of the contract. We think the court's construction of paragraph 24 of the option
provision, as providing for a second year in addition to the initial year, is an eminently
reasonable one that follows the well-thought out decision in Central New York Basketball, Inc. v.
Barnett (1961) 88 Ohio L.Abs. 40, 19 Ohio Ops.2d 130 [181 N.E.2d 506]), a case almost on all
fours with the instant one. In Barnett, the owner of an NBA franchised professional basketball
team sought to enforce a substantially similar renewal option against a player who, like Barry,
after the first year, entered into an agreement to play with a team franchised by the ABA. The
court held that the reasonable practical construction of the renewal option was that the club could
renew the player's contract for an additional year, and that so interpreted, the renewal provision
did not lack mutuality and was supported by sufficient consideration. We think the identical
reasoning applies here.”).)23

The Court of Appeal noted that the court in Central New York Basketball, Inc. stated: “‘‘…The authorities are to
the effect that so long as there is consideration for the obligation of the defendant, it is not essential that there be a
mutuality of obligation between plaintiff and defendant in order to sustain a right of action in the plaintiff against the
defendant for a breach of such obligation…’’” (Id. at 677, fn. 7.)
23

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 In opposition, Netflix argues that, piling onto the exclusion of a resignation provision and
inclusion of the injunctive relief provision, virtually all of Fox’s contracts allow it to unilaterally
extend the contractual term. (Second Supplemental Opposition, pgs. 8-9.) Netflix argues that,
not only do Fox’s contracts purport to prevent employees from working elsewhere for a specified
period of time, they purport to allow Fox to extend the period of its dominion in its sole
discretion. (Second Supplemental Opposition, pg. 9.) Netflix argues Fox admits it never
negotiates the unilateral nature of the provision and the only possible reason for refusing to make
the provision mutual is to enable Fox to force employees to remain at Fox against their will and
to hold even more leverage in its threat to prevent employees from working elsewhere.
(Supplemental Opposition, pg. 9.)
Netflix did not cite any on-point case law or authority to suggest the unilateral options in
the Flynn, Waltenberg, and other Fixed-Term Employment Agreements are somehow unlawful
or void. The fact that the unilateral options may provide Fox a better bargaining position in the
future is insufficient to establish the provisions are void. Moreover, at least with respect to Flynn
and Waltenberg, the agreements provide for increased compensation for the option years.
(Supplemental Declaration of Lens ¶¶62-66; Exhibits 60-64.)
3. No-Shop Provisions
Netflix argues that some of Fox’s contracts include a “no-shop” provision barring
employees from seeking or investigating new employment opportunities for 90 to 120 days
before the end of their contracts. (Supplemental Opposition, pg. 9.) Netflix argues this provision
plainly runs afoul of California law permitting an employee to seek other employment and even
make some preparations to compete before resigning. (Supplemental Opposition, pg. 9.)
It is undisputed that some of Fox’s fixed-term contracts contain a provision precluding
the employee from “seek[ing] or negotiat[ing]” for new employment more than 90 days before
the contract expires. (Netflix’s Response to Fox’s Supplemental SS, pg. 272, No. 62.) Fox
argues that “Netflix cites no authority and alleges no facts suggesting that the…No-Shop clauses
restrain employees after they leave Fox.” (Second Supplemental Reply, pg. 9.)
Netflix did not cite controlling authority holding these clauses are invalid. The FixedTerm Employment Agreements directly at issue in this action – the Flynn and Waltenberg
Agreements – do not contain the “no-shop” provision. Moreover, even assuming, arguendo,
some of the Fixed-Term Employment Agreements contain “no-shop” provisions and they are
invalid, there is nothing before the court to suggest the provisions cannot be severed.
4. Non-Solicitation Provisions
Netflix failed to sustain its burden of showing the non-solicitation clauses violate public
policy. The 2013 Flynn Agreement, the Waltenberg Agreement, and other Fixed-Term
Employment Agreements contain the following non-solicitation provision:
You will not, during the term of your employment and for a period of two (2)
years thereafter, either individually or on behalf of any other entity, directly or
indirectly, induce or solicit or approach or attempt to induce or solicit or approach
Page 32 of 48

 any person who is an employee of the Company, or any of its affiliates to render
services to any other person, firm or corporation.
(Netflix’s Response to Fox’s Supplemental SS, pgs. 5, 137, and 271, Nos. 4, 34, and 61.) In the
second amended answer, Netflix alleged the non-solicitation provisions are “wildly overbroad”
and violative of Business & Professions Code §16600. (2nd AA ¶18.) However, as
discussed above, Business & Professions Code §16600 does not affect limitations on an
employee's conduct or duties while employed. Moreover, the post-employment restriction is not
void on its face under Business & Professions Code §16600. The non-solicitation provisions are
essentially non-interference provisions that prevent a former Fox employee from raiding the
employees of Fox or Fox’s affiliates for a period of two years. Such non-interference provisions
do not violate Business & Professions Code §16600.
The case of Loral Corp. v. Moyes (1985) 174 Cal.3d 268 is instructive. In Loral Corp.,
the California Court of Appeal, Sixth Appellate District, determined that a termination agreement
between an employer and former employee, which contains a provision “restrain[ing] the former
employee from disrupting, damaging, impairing or interfering with his former employer’s
business by ‘raiding’ its employees,” is not void on its face under Business & Professions Code
§16600. (Id. at 271, 275-278.) The court characterized the agreement as a “noninterference
agreement.” (Id. at 275.) The court stated the “potential impact on trade must be considered
before invalidating a noninterference agreement.” (Id. at 278.) The court recognized that a
“contract must be construed to be lawful if possible.” (Id. at 278-279.) The court also recognized
that “Defendant is restrained from disrupting, damaging, impairing or interfering with his former
employer by raiding Conic employees under his termination agreement.” (Id. at 279.) The court
stated this “does not appear to be any more of a significant restraint on his engaging in his
profession, trade or business than a restraint on solicitation of customers or on disclosure of
confidential information.” (Id.) The court noted the agreement “‘expressly permits Moyes to be
employed by or engage in a competing business.’ [Citation]” (Id.) The court also noted the
“restriction only slightly affects Conic employees” – “[t]hey are not hampered from seeking
employment with Aydin nor from contacting Moyes,” and all “they lose is the option of being
contacted by him first.” The court recognized the provision “does not restrain [the employees]
from being employed by Aydin.” (Id. at 279.) The court recognized the “restriction presumably
was sought by plaintiffs in order to maintain a stable work force and enable the employer to
remain in business” and this “restriction has the apparent impact of limiting Moyes’ business
practices in a small way in order to promote Conic’s business.” (Id. at 280.) According to the
court, this “noninterference agreement has no overall negative impact on trade or business.”
(Id.)
In opposition, Netflix argues the non-solicitation provisions are overbroad – they are
unlimited as to geography and restrict Fox employees during their employment and for two years
after employment from “directly or indirectly” approaching or enticing “any person who is an
employee of Fox or any of its affiliates to render services to any other person, firm or
corporation.” (Netflix’s Supplemental Opposition, pgs. 9-10.) Netflix contends “Fox’s affiliates
include hundreds or more companies around the world – companies that are never disclosed to
Fox employees when they signed their fixed-term contracts.” (Netflix’s Supplemental
Opposition, pg. 10.) Netflix also argues that “Courts have invalidated non-solicitation provisions
under section 16600.” (Netflix’s Supplemental Opposition, pg. 10.)
Page 33 of 48

 Netflix did not cite any on-point case law or authority to suggest the non-solicitation
provisions violate Business & Professions Code §16600. Netflix’s reliance on AMN and WeRide
Corp. v. Kun Huang (N.D. Cal. 2019) 379 F.Supp.3d 834 is misplaced. WeRide is not binding
on this court. Moreover, AMN is distinguishable because it involved a non-solicitation of
employee provision that restrained the individual defendants from practicing their chosen
profession. (AMN at 936.) According to the California Court of Appeal, Fourth Appellate
District, Division Two, “the broadly worded provision prevents individual defendants, for a
period of at least one year after termination of employment with AMN, from either ‘directly or
indirectly’ soliciting or recruiting, or causing others to solicit or induce, any employee of AMN.”
(Id.) The court stated this “provision clearly restrained individual defendants from practicing
with Aya their chosen profession – recruiting travel nurses on 13-week assignments with AMN.”
(Id.)24 In contrast to AMN, the instant action does not involve recruiters and/or restraints on
Waltenberg and Flynn from practicing their chosen profession with Netflix.
Even assuming, arguendo, the non-solicitation provisions violate Business & Professions
Code §16600, the provisions can properly be severed.
5. Confidentiality Provisions
Netflix failed to sustain its burden of showing the confidentiality provisions violate
public policy. The 2013 Flynn Agreement, the Waltenberg Agreement, and other Fixed-Term
Employment Agreements contain the following confidentiality provision:
You understand and agree that in the course of employment with the Company,
you may acquire confidential information and trade secrets concerning the
Company’s operations, its future plans and its method of doing business (and the
operations, future plans and method of doing business of Company’s affiliates),
including, by the way of example, but by no means limited to, highly proprietary
information about the Company’s (and its affiliates) customers, processes,
product development, financial, marketing, pricing, cost, and compensation,
(hereinafter collectively “Trade Secrets”), all of which information you
understand and agree would be extremely damaging to the company if disclosed
to a competitor or made available to any other person or corporation. As used
herein, the term “competitor” includes, but is not limited to, any corporation, firm
or business engaged in a business similar to that of the Company or its subsidiary
The AMN court doubted the validity of Loral Corp. “post-Edwards.” (Id. at 939.) However, the AMN court’s
decision did not rest on that analysis alone. The AMN court stated:
24

Even if Moyes’s use of a reasonableness standard survived Edwards, we find Moyes factually
distinguishable to our case. Unlike the former employee in Moyes, who was an executive officer of the
plaintiff employer, in the instant case individual defendants were in the business of recruiting and placing
on a temporary basis medical professionals, primarily nurses, in medical facilities throughout the country.
If enforced, section 3.2 of the CNDA thus restrained individual defendants from engaging in their chosen
profession, even in a ‘narrow’ manner or a ‘limited’ way. [Citation] We thus independently conclude
section 3.2 of the CNDA is void under section 16600.
(Id. at 939.)

Page 34 of 48

 companies. You understand and agree that such information is divulged to you in
confidence and you understand and agree that, at all times, you shall keep in
confidence and will not disclose or communicate Trade Secrets or any other secret
and confidential information on your own behalf, or on behalf of any competitor,
if such information is not otherwise publicly available, unless disclosure is made
pursuant to written approval by the Company or is required by law. In view of the
nature of your employment and information and Trade Secrets which you may
receive during the course of your employment, you likewise agree that the
company would be irreparably harmed by any violation of this Agreement and
that, therefore, the Company shall be entitled to seek an injunction prohibiting
you from any violation of threatened violation of this Agreement.
(Netflix’s Response to Fox’s Supplemental SS, pgs. 3-4, 136-137, and 270-271, Nos. 3, 33, and
60.) In the second amended answer, Netflix alleged Fox’s confidentiality provisions treat
“virtually every bit of information an employee learns while employed by Fox as confidential,
and forbids its disclosure post-employment,” and the “prohibition goes well beyond legitimate
trade secrets, and is phrased broadly enough to include the basic knowledge of the industry and
the skills acquired that make employees valuable and marketable.” (2nd AA ¶19.) Netflix also
alleged the confidentiality provisions limit the employees’ ability to find employment after
leaving Fox. (2nd AA ¶19.) However, as argued by Fox, the confidentiality provisions only limit
disclosure of Fox’s confidential and trade secret information, not Fox employees’ general
knowledge. (Fox’s Second Supplemental Brief, pg. 14.) “[A]greements designed to protect an
employer’s proprietary information do not violate section 16600. [Citation]” (Fowler at 44.)
In opposition, Netflix argues the Fixed-Term Employment Agreements contain overbroad
confidentiality provisions that go “beyond the dissemination of trade secrets, encompassing vast
amounts of information including information in an employee’s head.” (Second Supplemental
Opposition, pg. 10.) Netflix argues the provisions impede “employees from deploying general
knowledge and skills post employment.” (Second Supplemental Opposition, pg. 10.) Netflix,
relying on Dowell v. Biosense Webster, Inc. (2009) 179 Cal.App.4th 564, 577-578, also argues
that “even restraints protecting trade secrets are of questionable validity under section 16600.”
(Netflix’s Supplemental Opposition, pg. 10.)
As discussed above, the confidentiality provisions are limited to disclosure of Fox’s
confidential and trade secret information. The provisions do not apply to an employee’s general
knowledge. (Second Supplemental Reply, pg. 9, fn. 10.) (See Wanke, Industrial, Commercial,
Residential, Inc. v. Keck (2012) 209 Cal.App.4th 1151, 1177 (“Thus, under Edwards, Business
and Professions Code section 16600 generally prohibits the enforcement of a nonsolicitation
agreement in all cases in which the trade secret exception does not apply.”).) Moreover, Netflix
did not provide the court with admissible evidence showing the confidentiality provisions
prevented Flynn, Waltenberg, or any other employee from deploying their general knowledge
and skill post-employment with Fox. Additionally, Netflix did not cite to on-point case law or
authority to establish that restraints protecting trade secrets are invalid under Business &
Professions Code §16600. Netflix’s reliance on Dowell is misplaced. The California Court of
Appeal, Second Appellate District, Division Two, in Dowell, did not resolve the issue of “the
continued viability of the common law trade secret exception to covenants not to compete.” (Id.
at 577.) The court determined that, even assuming the exception exists, it had no application
Page 35 of 48

 because “the noncompete and nonsolicitation clauses in the agreements are not narrowly tailored
or carefully limited to the protection of trade secrets, but are so broadly worded as to restrain
competition. [Citation]” (Id. at 577-578.)
6. Labor Code §2855 – Seven-Year Rule
Labor Code §2855(a) provides, as follows:
Except as otherwise provided in subdivision (b), a contract to render personal
service, other than a contract of apprenticeship as provided in Chapter 4
(commencing with Section 3070), may not be enforced against the employee
beyond seven years from the commencement of service under it. Any contract,
otherwise valid, to perform or render service of a special, unique, unusual,
extraordinary, or intellectual character, which gives it peculiar value and the loss
of which cannot be reasonably or adequately compensated in damages in an
action at law, may nevertheless be enforced against the person contracting to
render the service, for a term not to exceed seven years from the commencement
of service under it. If the employee voluntarily continues to serve under it beyond
that time, the contract may be referred to as affording a presumptive measure of
the compensation.
The Manchester v. Arista Records, Inc. (C.D. Cal. 1981) 1981 U.S. Dist. Lexis 18642
case suggests a determination as to whether there has been a violation of Labor Code §2855(a)
requires consideration of the circumstances surrounding the formation of the contracts in each
situation. In Manchester, the United States District Court stated:
Manchester takes the position that the 1976 agreement is not an independent
contract. However, her analysis is too broad. She argues that, since the 1976
contract was entered into before the 1973 contract expired, it must necessarily be
an extension of the 1973 contract and thus also invalid pursuant to § 2855. She
argues that it cannot be anything but an invalid extension because of the
prohibition of waiver of employees' rights under § 2855. This argument is
unpersuasive. It would effectively prevent an employee from entering into a new
contract with his or her current employer until after the completion of all
obligations between them. The better course is to consider the circumstances
surrounding the formation of the new contract in each situation. If the new
contract was entered into at or near the time of formation of the earlier contract,
and if the two contracts appear to have been entered into to avoid the application
of §2855 to a single agreement, then they should be considered a single contract
for purposes of §2855. However, if the latter contract was entered into toward the
end of the first contract, it should be treated as a separate agreement for purposes
of §2855. Each employment situation will necessarily be interpreted according to
its unique facts. The interpretation of the two contracts should be made in light of
the policy consideration underlying § 2855 to protect employees, rather than by
principles of formal contract law…[¶] The 1976 contract was entered into after
the 1973 agreement was partially completed. It was an integrated agreement that
differed in several material respects from the 1973 agreement. It did not have a
Page 36 of 48

 forum selection clause; it materially altered the royalty provisions; and it was
entered into to pay the debt that Manchester owed to Philips and thus was
supported by different consideration. The only significant factor that supports
treating the two contracts as one is that the 1976 agreement is an option contract
that Arista could exercise only if it had exercised all of its options under the 1973
contract. [¶] Upon consideration of all of these undisputed facts, it is the
determination of the Court that the 1976 contract was separately entered into and
that it was not entered into with the purpose of evading the seven year
employment limitation of § 2855.
(Id. at *18-20.) (Emphasis Added.) The court finds Manchester is well-reasoned and persuasive.
Netflix failed to sustain its burden of showing the Waltenberg Agreement violates the
seven-year rule. Waltenberg’s 2009 contract with Fox had a fixed-term and a unilateral option.
(Netflix’s Response to Fox’s Supplemental SS, pg. 70, No. 12.) Waltenberg was an at-will Fox
employee between May 2012 and December 2014. (Netflix’s Response to Fox’s Supplemental
SS, pg. 68, No. 9.) Fox and Waltenberg executed the Waltenberg Agreement for a specified
term, dated December 9, 2014. (Netflix’s Response to Fox’s SS, pgs. 2-4, No. 1.) Fox, pursuant
to Paragraph 1(a) of the Waltenberg Agreement, agreed to employ Waltenberg for a period of
two years, from January 1, 2015 to December 31, 2016 (“Term”). (Netflix’s Response to Fox’s
SS, pgs. 4-5, No. 2.) The Waltenberg Agreement contains an option, exercisable at Fox’s
discretion. (Netflix’s Response to Fox’s Supplemental SS, pg. 3, No. 1.) The Waltenberg
Agreement states, in pertinent part, as follows: “In addition, the Company shall have one
irrevocable option, exercisable within the sole discretion of the Company, to employ you for one
additional two-year period (‘the Option Period’) pursuant to this Agreement, commencing
January 1, 2017 and ending December 31, 2018.” (Netflix’s Response to Fox’s Supplemental SS,
pg. 3, No. 1.) (Supplemental Declaration of Lens ¶66; Exhibit 64.) The Waltenberg Agreement
provides for, at most, a four-year term. Waltenberg stopped working at Fox on January 22,
2016, before the initial two-year term expired. (Netflix’s Response to Fox’s SS, pg. 11, No. 9.)
Netflix failed to sustain its burden of showing the Flynn Agreement violates the sevenyear rule.25 Flynn’s September 2012 contract with Fox had a fixed-term and a unilateral option.
(Netflix’s Response to Fox’s Supplemental SS, pg. 205.) The September 2012 Agreement
identifies the term of employment as two years – from September 10, 2012 to September 9,
2014, with one option for an additional year – from September 10, 2014 to September 9, 2015.
The September 2012 Agreement identifies Flynn’s position as Director, Creative, and sets forth
the following compensation schedule: (1) 80,000 per annum for the first twelve months; (2)
$85,000 per annum for the second twelve months; and (3) $92,500 per annum for the one-year
option period. (Fox’s SS – No. 13.) (Netflix’s Response to Fox’s SS, pgs. 20-25, No. 13.)
(Supplemental Declaration of Lens ¶63; Exhibit 61.) Flynn signed the November 2013
Agreement on November 20, 2013. The November 2013 Agreement states it supersedes any and
all prior agreements and identifies the term of two years – from November 19, 2013 to
25

In the original reply, Fox 21 conceded the agreements and amendment entered into with Flynn (set forth above)
“could have led” to a more than seven-year term in violation of Labor Code §2855, but argued Fox 21 “never
executed the Flynn Option.” (Reply, pg. 6, fn. 5.) However, Fox now represents the “statement in its May 23, 2019
reply brief that Flynn’s contract could have run more than seven years…was a mistake.” (Second Supplemental
Brief, pg. 16, fn. 19.)

Page 37 of 48

 November 18, 2015, with one option for an additional two years – from November 19, 2015 to
November 18, 2017. The November 2013 Agreement identifies Flynn’s position as Executive
Director, Creative, and Vice President, Creative (effective November 19, 2014), and sets forth
the following compensation schedule: (1) $95,000 per annum for the first twelve months; (2)
$127,500 per annum for the second twelve months; and (3) $135,000 per annum for the first
twelve months of the option period and $145,000 per annum for the second twelve months of the
option period; and (4) a car allowance in the amount of $7,200. (Fox’s SS – No. 13.) (Netflix’s
Response to Fox’s SS, pgs. 20-25, No. 13.) (Supplemental Declaration of Lens ¶64; Exhibit 62.)
Fox 21 exercised its option in the November 2013 Agreement. (Fox’s SS – No. 13.) (Netflix’s
Response to Fox’s SS, pgs. 20-25, No. 13.) As of November 19, 2015, Flynn and Fox 21
amended the November 2013 Agreement, as follows: (1) $190,000 per annum for the first twelve
months of the option period and $200,000 per annum for the second twelve months of the option
period and (2) one additional two-year option. (Fox’s SS – No. 13.) (Netflix’s Response to
Fox’s SS, pgs. 20-25, No. 13.) (Supplemental Declaration of Lens ¶65; Exhibit 63.) Flynn
stopped working at Fox on September 2, 2016. (Netflix’s Response to Fox’s SS, pg. 30, No. 21.)
Flynn’s agreements do not violate the seven-year rule. Flynn’s 2012 Agreement has a
max three-year term (two years, plus an option for an additional year). Flynn’s 2013 Agreement,
including the November 2015 Amendment and all available Fox options, is six years. (Netflix’s
Response to Fox’s Supplemental SS, pg. 139, No. 36.) The evidence before the court and
undisputed facts show the 2013 Agreement is a separate agreement and “it was not entered into
with the purpose of evading the seven year employment limitation of §2855.” (Manchester at
*20.) Flynn signed the 2013 Agreement on November 20, 2013, more than a year after she
executed the 2012 Agreement. (Supplemental Declaration of Lens ¶¶63-64; Exhibits 61-62.)
Moreover, Flynn’s 2012 and 2013 Agreements provide for different titles and salaries. (Netflix’s
Response to Fox’s Supplemental SS, pg. 140, No. 37.) Flynn even negotiated her salary up to the
$190,000.00 to $225,000.00 range in her 2015 contract amendment. (Netflix’s Response to
Fox’s Supplemental SS, pg. 206, No. 44.)
Even assuming, arguendo, the agreements were considered together and violate the
seven-year rule, Kirkland v. Golden Boy Promotions, Inc. 2013 WL 12132028, suggests the
additional option in the 2015 Amendment may be void, not the November 2013 Agreement. In
Kirkland, the United States District Court concluded the Promoter Agreement itself was not
unenforceable under 4 C.C.R. §222 (with the exception of the extension provisions, which are
severable) even though the Contract Extension, “which was meant to extend the term of the
original Promoter Agreement,” was illegal under §222 because the “sole and central purpose of
the Contract Extension was to form a contract for a period exceeding five years.” (Id. at 4-6.)
(Emphasis Added.) An argument can be made that the November 2013 Agreement is not void. If
the central purpose of the November 2013 Agreement was to employ Flynn for a term of two
years, with one option for an additional two-year term, at set compensation, the purpose would
be lawful. That purpose would not be dependent on extension of the Flynn-Fox 21 relationship
beyond the seven-year period permitted by Labor Code §2855. Assuming, for purposes of the
instant motion only, that the Amendment is a contract extension that was meant to extend the
term of the November 2013 Agreement and the sole and central purpose of the Amendment was
illegal under Labor Code §2855, under the reasoning in Kirkland, the Amendment would be
void, not the November 2013 Agreement. The undisputed facts show Flynn stopped working at
Fox 21 on September 2, 2016, which was during the option term set forth in the November 2013
Page 38 of 48

 Agreement and before the (unexercised) option term in the amendment to the November 2013
Agreement. (Netflix’s Response to Fox’s SS, pg. 30, No. 21.)
Netflix, in opposition, argues there are genuine issues of material fact as to whether
certain Fox Fixed-Term Employment Agreements violate the seven-year rule and are
unenforceable. (Second Supplemental Opposition, pg. 11.) Netflix contends “it is hotly disputed
whether the subsequent and overlapping contracts contain material key provisions as Fox
claims.” Netflix represents that a review of Fox’s contracts reveals at least 97 employees who
remained under contract with Fox for more than seven years and received no promotion, and 87
of those employees never changed divisions. (Second Supplemental Opposition, pg. 12.) Netflix
argues this “strongly indicates that these are not actually ‘new’ or ‘superseding’ agreements, but
extensions that flout section 2855.” (Second Supplemental Opposition, pg. 12.) Netflix also
argues that even “were it relevant that Fox puts its employees under ‘new’ and ‘superseding’
agreements, there exists a triable issue of fact as to whether they are fairly negotiated at arm’s
length, as Fox claims.” (Second Supplemental Opposition, pg. 13.)
As discussed above, and in the court’s ruling denying Netflix’ motion for summary
adjudication, the Waltenberg and Flynn Agreements do not violate the seven-year rule.
Moreover, in light of the standing and indispensable party issues discussed below in detail, the
other Fixed-Term Employment Agreements are not properly before this Court.
Based on the foregoing, Fox’s motion for summary adjudication of Netflix’s violation of
public policy affirmative defense is granted.
b. Unconscionability (24th AD)
“‘‘Unconscionability is ultimately a question of law for the court.’ [Citation.] ‘However,
numerous factual issues may bear on that question. [Citation.]…’’” (Carbajal v. CWPSC, Inc.
(2016) 245 Cal.App.4th 227, 236.)
“‘Unconscionability has procedural and substantive aspects. [Citation.] ‘Both procedural
and substantive unconscionability must be present before a court can refuse to enforce an
arbitration provision based on unconscionability. However, the two elements need not be present
in the same degree.’ [Citation.] Courts use a ‘‘sliding scale’’ approach in assessing the two
elements. [Citation.] ‘In other words, the more substantively oppressive the contract term, the
less evidence of procedural unconscionability is required to come to the conclusion that the term
is unenforceable, and vice versa.’’ [Citations]” (Id. at 242.)
“This sliding scale approach ‘requires a court to examine the totality of the agreement's
substantive terms as well as the circumstances of its formation to determine whether the overall
bargain was unreasonably one-sided.’ [Citation] ‘The ultimate issue in every case is whether the
terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court
should withhold enforcement.’ [Citation]” (Id.)
“Procedural unconscionability ‘addresses the circumstances of contract negotiation and
formation, focusing on oppression or surprise due to unequal bargaining power.’ [Citation]
‘‘‘‘‘Oppression arises from an inequality of bargaining power which results in no real
Page 39 of 48

 negotiation and an absence of meaningful choice. … Surprise involves the extent to which the
terms of the bargain are hidden in a ‘prolix printed form’ drafted by a party in a superior
bargaining position.’’’’’ [Citation] ‘[P]rocedural unconscionability requires either oppression or
surprise.’ [Citations] Both are not required.” (Id. at 243.)
“‘The substantive element of unconscionability ‘pertains to the fairness of an agreement's
actual terms and to assessments of whether they are overly harsh or one-sided.’ [Citation.] This
includes consideration of the extent to which the disputed term is outside the reasonable
expectation of the nondrafting party or is unduly oppressive.’ [Citations] [¶] ‘It has long been
recognized that substantive unconscionability is not susceptible to ‘precise definition’’
[Citation], and therefore our courts have used a wide variety of expressions to describe
contractual provisions that are substantively unconscionable, including ‘‘‘overly harsh’’’
[citation], ‘‘unduly oppressive’’ [citation], ‘‘so one-sided as to “shock the conscience’’ [citation],
or ‘unfairly one-sided’ [citation]’’ [Citation]. Our Supreme Court recently clarified that ‘these
formulations … all mean the same thing.’ [Citation] The essential notion they each capture is
‘‘that unconscionability requires a substantial degree of unfairness beyond ‘a simple oldfashioned bad bargain.’’’ [Citation]” (Id. at 247-248.)
The court does not need to address whether the Flynn Agreement, the Waltenberg
Agreement, and/or the other Fixed-Term Employment Agreements are procedurally
unconscionable, because the (challenged) agreements are not substantively unconscionable.
Netflix argues Fox’s Fixed-Term Employment Agreements are substantively unconscionable for
“all the reasons [the] contracts are void as against California public policy.” (Netflix’s Second
Supplemental Opposition, pgs. 15-16); however, as discussed above in detail, the Fixed-Term
Employment Agreements do not violate public policy, and/or any offending provisions can be
severed.
The court notes it is undisputed that entertainment-industry employment contracts often
contain options (granting the employer the right to extend the duration of an employee’s tenure),
injunctive-relief provisions, confidentiality agreements, and non-solicitation provisions similar to
those included in most Fox Fixed-Term Employment Agreements. (Netflix’s Response to Fox’s
Supplemental SS, pgs. 73, 80, 82, 83, Nos. 16, 22, 24, 26.) (See American Software, Inc. v. Ali
(1996) 46 Cal.App.4th 1386, 1392-1393 (“When viewed in light of the circumstances as they
existed on August 23, 1991, when the instant contract was executed, we cannot say the contract
provision with respect to compensation after termination was so unfair or oppressive in its
mutual obligations as to ‘shock the conscience.’ [Citation] If the official notes accompanying
Uniform Commercial Code section 2-302, upon which Civil Code section 1670.5 is based, is to
be relied upon as a guide, the contract terms are to be evaluated ‘in the light of the general
commercial background and the commercial needs of the particular trade or case…’ [Citation]
Corbin suggests that the test is whether the terms are ‘so extreme as to appear unconscionable
according to the mores and business practices of the time and place.’ (1 Corbin, Contracts (1963)
§ 128, p. 551.) [¶] Our survey of case law indicates that the contract provision challenged here is
commonplace in employment contracts with sales representatives, such as Ali, who have
ongoing responsibilities to ‘service’ the account once the sale is made. [Citations] In briefing
below, the rationale for deferring commissions until payment is actually received by the
customer was explained by American Software: ‘[I]f the entire commission were to be deemed
earned by merely obtaining buyers, the burden of servicing those buyers pending receipt of
Page 40 of 48

 revenues would fall on American Software's other salespersons unfamiliar with the earlier
transaction who would receive nothing for their efforts.’… [¶] Nor do we find that the terms of
this contract represent ‘an overly harsh allocation of risks…which is not justified by the
circumstances under which the contract was made.’ [Citation] The contract terms with regard to
Ali's compensation involved certain risks to both parties to the bargain. The contract in the
instant case placed a risk on Ali that she would lose commissions from her customers if payment
was not received by American Software within 30 days after her resignation. American Software
took the risk that at the time of Ali's termination, she would not have earned sufficient
commissions to cover the substantial draws ‘credited’ to her. This is part of the bargaining
process--it does not necessarily make a contract unconscionable. The contract simply does not
appear to be ‘overly harsh or one-sided, with no justification for it at the time of the agreement.’
[Citation]”).) (See also Koehl v. Verio, Inc. (2006) 142 Cal.App.4th 1313, 1339-1340.)
Based on the foregoing, Fox’s motion for summary adjudication of Netflix’s
unconscionability affirmative defense is granted.
3. Amended Cross-Complaint
In the amended cross-complaint for violation of Business & Professions Code §17200
and declaratory relief, Netflix seeks a declaration that Fox’s Fixed-Term Employment
Agreements are unenforceable and an order preventing Fox from enforcing such agreements to
prohibit employment with other companies, including Netflix. (Amended X-C, pg. 25.) Netflix’s
causes of action both seek this relief as to an unspecified number of unidentified current and/or
former Fox employees who allegedly had or have such contracts. (Amended X-C ¶57.) These
Fox employees are not parties to this case. Moreover, Netflix is not a party to any of the FixedTerm Employment Agreements at issue in the amended cross-complaint. For these reasons and,
as further discussed below, Netflix’s amended cross-complaint fails.
a. Indispensable Parties
C.C.P. §389 provides, as follows:
(a) A person who is subject to service of process and whose joinder will not deprive
the court of jurisdiction over the subject matter of the action shall be joined as a party
in the action if (1) in his absence complete relief cannot be accorded among those
already parties or (2) he claims an interest relating to the subject of the action and is
so situated that the disposition of the action in his absence may (i) as a practical
matter impair or impede his ability to protect that interest or (ii) leave any of the
persons already parties subject to a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations by reason of his claimed interest. If he has not been
so joined, the court shall order that he be made a party.
(b) If a person as described in paragraph (1) or (2) of subdivision (a) cannot be made
a party, the court shall determine whether in equity and good conscience the action
should proceed among the parties before it, or should be dismissed without prejudice,
the absent person being thus regarded as indispensable. The factors to be considered
by the court include: (1) to what extent a judgment rendered in the person’s absence
might be prejudicial to him or those already parties; (2) the extent to which, by
Page 41 of 48

 protective provisions in the judgment, by the shaping of relief, or other measures, the
prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s
absence will be adequate; (4) whether the plaintiff or cross–complainant will have an
adequate remedy if the action is dismissed for nonjoinder.
“‘A person is an indispensable party to litigation ‘‘if his or her rights must necessarily be
affected by the judgment.’’ [Citation.] Stated differently, ‘Where the plaintiff seeks some type of
affirmative relief which, if granted, would injure or affect the interest of a third person not
joined, that third person is an indispensable party.’ [Citation.] These principles have been
codified in Code of Civil Procedure section 389. An ‘‘indispensable party is not bound by a
judgment in an action in which he was not joined.’’’ [Citation] (In re Marriage of Ramirez
(2011) 198 Cal.App.4th 336, 344.)
The California Court of Appeal, First Appellate District, Division One, in Fraser-Yamor
Agency, Inc. v. County of Del Norte (1977) 68 Cal.App.3d 201, 214, raised the issue of
indispensable parties on its own motion on appeal. The “plaintiff corporation…sought a
declaration that all currently outstanding insurance contracts where defendant county is the
insured party entered into or procured by the corporation and its predecessor partnership…are
valid and in full force and effect.” (Id. at 205.) The insurance companies were not parties to the
action, which purported to “adjudicate the validity of insurance policies in which they are
contracting parties.” (Id. at 213.) The Court of Appeal stated:
We apprehend that there are serious due process implications in presuming to
adjudicate the validity of the insurance policies without affording the insurance
companies their day in court. The insurance companies are not parties to the
instant litigation which purports to adjudicate the validity of insurance policies in
which they are contracting parties. “(P)ersons whose interests, rights, or duties
will inevitably be affected by any decree which can be rendered in the action” are
indispensable parties. [Citations] If such persons are not before the court, the
court is without jurisdiction to adjudicate their rights because the failure to join an
indispensable party constitutes a jurisdictional defect. [Citations] [¶] Because the
requirement that indispensable parties be before the court is mandatory, it may be
raised at any time and it may be raised by the appellate court on its own motion if
the parties fail to make the objection. [Citations]
(Id. at 214.) The Court of Appeal noted that “no objection to the nonjoinder of the insurance
companies was made in the court below nor [had] it been urged by the parties on [the] appeal.”
(Id.) Nevertheless, it was proper for the Court of Appeal to raise the indispensable party defect
on its own motion. (Id.)
The Fox employees who are parties to the alleged unenforceable Fixed-Term
Employment Agreements are indispensable parties. Clearly, the rights, interests, and/or duties of
Fox’s fixed-term employees would be affected by the decree sought by Netflix in this action.
These Fox fixed-term employees are not parties to the instant action. The court, therefore, “is
without jurisdiction to adjudicate their rights because the failure to join an indispensable party
constitutes a jurisdictional defect [Citation]” (Id.)
Page 42 of 48

 b. Standing26
C.C.P. §1060 provides, in pertinent part, as follows:
Any person interested under a written instrument, excluding a will or a trust, or
under a contract, or who desires a declaration of his or her rights or duties with
respect to another, or in respect to, in, over or upon property…may, in cases of
actual controversy relating to the legal rights and duties of the respective parties,
bring an original action or cross–complaint in the superior court for a declaration
of his or her rights and duties in the premises, including a determination of any
question of construction or validity arising under the instrument or contract.
(Emphasis Added.)
C.C.P. §367 provides, as follows: “Every action must be prosecuted in the name of the
real party in interest, except as otherwise provided by statute.”
A plaintiff or cross-complainant generally does not have standing to seek declaratory
relief on a contract to which he or she is not a party. (See Fladeboe v. American Isuzu Motors
Inc. (2007) 150 Cal.App.4th 42, 55 (“‘Plaintiffs have standing to sue if they or someone they
represent have either suffered or are threatened with an injury of sufficient magnitude to
reasonably assure the relevant facts and issues will be adequately presented.’ [Citation] [¶] We
can readily conclude Fladeboe had no standing to seek declaratory relief or to assert any of the
claims alleged in the complaint. He was never an Isuzu dealer. He was not a party to the Dealer
Agreement with Isuzu or the Asset Purchase Agreement with Fladeboe VW. Fladeboe was the
sole shareholder of RFLM and is the sole shareholder of Fladeboe AG. As a shareholder,
Fladeboe did not have standing to assert corporate claims, except in a derivative action.
[Citations]”).)

26

Fox indirectly raised the issues of standing and indispensable parties. Fox asserted the following arguments in the
motion, second supplemental motion, and second supplemental reply:
…Netflix, a rival competitor, wants the Court to exercise its equitable powers to invalidate hundreds of
contracts to which Netflix is not a party and where the contracting parties themselves – Fox and its
employees – have no interest in seeking their contracts declared invalid. This proposition is all the more
perverse when considering Netflix seeks to break contracts of employees who are not before the Court and
have no opportunity to be heard… (Motion, pg. 8.)
….it would be a grossly “unconscionable result,” Cal. Civ. Code §1670.5(a), if the Court were to invalidate
the employment contracts of current Fox employees who are not parties to this litigation. It would raise
obvious due-process issues, because employees would suddenly lose the security and benefits for which
they bargained without any opportunity to be heard, plainly in violation of their rights. (Second
Supplemental Motion, pgs. 23-24.)
Nor does Netflix explain how the Court would possibly declare all such contracts invalid in the absence of
the employees who are parties to these contracts – none of whom is before the Court or had an opportunity
to be heard… (Second Supplemental Reply, pg. 7.)

Page 43 of 48

 “The real party in interest is one ‘having an actual and substantial interest in the subject
matter of the action and who would be benefitted or injured by the judgment in the action.’
[Citation]” (County of Alameda v. State Board of Control (1993) 14 Cal.App.4th 1096, 1103.)
“‘An action not founded upon an actual controversy between the parties to it, and brought for the
purpose of securing a determination of a point of law…will not be entertained; and the same is
true of a suit the sole object of which is to settle rights of third persons who are not parties.’
[Citation]” (Id.) “‘A real party in interest ordinarily is defined as the person possessing the right
sued upon by reason of the substantive law.’ [Citation]” (Id.) “Plaintiffs who attempt to assert or
enforce the substantive rights of others are denied standing…” (Id. at 1105.)
The Oppenheimer case is instructive. (Oppenheimer v. General Cable Corp. (1956) 143
Cal.App.2d 293.) The California Court of Appeal, Second Appellate District, Division Two,
determined a plaintiff did not have standing to assert a declaratory relief claim against individual
defendants that were not parties to the employment contract at issue. (Id. at 294-298.) The
plaintiff prayed for, among other things, “a declaration of rights, duties and obligations of
plaintiff and defendants under the terms of the written contract of employment [with defendant
corporation].” (Id. at 295, 296.) “The individual defendants [were] declared to have been at all
times the ‘agents, servants, employees and officials of the corporation’ and to have ‘acted and
purported to act for and on behalf of said corporation defendant at all such times in their
respective official capacities.’” (Id.) The Court of Appeal determined that “[a]ny breach of
contract that is alleged in the complaint is that of the corporation and not of its agents, and they
are not personally liable by reason thereof [Citations].” (Id. at 297.) The Court of Appeal stated:
Defendants Canfield, Volle and Gunderson, as agents of the corporation, have
neither rights nor obligations in relation to plaintiff under the contract of their
principal and are asserting no interest in or under the contract antagonistic to any
right of plaintiff. While plaintiff may be entitled to declaratory relief to settle
disputes as between himself and the corporation under the contract, he is not
entitled to declaratory relief as against the individual defendants. Section 1060,
Code of Civil Procedure, provides for declaratory relief "in cases of actual
controversy relating to the legal rights and duties of the respective parties." It does
not provide for the settlement of disputes between plaintiff and persons having no
interest under the contract such as Canfield, Volle and Gunderson in the instant
matter…‘The Declaratory Judgment Act plainly contemplates that there shall be
an actual controversy between persons having an interest in the subject matter of
the action.’ [Citation]
(Id. at 297) (citations omitted) (emphasis added.) The Court of Appeal also stated that “[c]learly,
section 1060…does not entitle plaintiff to maintain an action against the individual defendants
for a declaration of his rights under a contract to which these defendants are not parties and are
alleged to have no legal rights or duties. As between plaintiff and these defendants, no dispute as
to their legal rights and duties is shown.” (Id.) The Court of Appeal recognized that the court
may also “refuse to exercise its declaratory relief powers in any case where its declaration or
determination is not necessary or proper at the time under all the circumstances. [Citations]”
(Id.) (Id. at 297-298.)

Page 44 of 48

 Additionally, the D. Cummins Corp. v. United States Fidelity & Guaranty Co. (2016) 246
Cal.App.4th 1484 (“Cummins”) case supports this court’s ruling. Cummins Corp. purchased 19
insurance policies issued by U.S. Fidelity between July 1, 1969, and January 1, 1987, and
purchased 4 insurance policies issued by the predecessor to U.S. Fire between February 1, 1988,
and January 1, 1992. (Id. at 1486-1487.) Holding Co., formed on January 17, 2014, is the parent
and controlling shareholder of Cummins Corp. (Id. at 1487.) Cummins Corp. and Holding Co.
filed a complaint for declaratory relief against the insurers, seeking a declaration that the insurers
“are obligated to defend and/or indemnify Cummins…, in full, including, without limitation,
payment of the cost of investigation, defense, settlement and judgment…, for past, present and
future Asbestos Suits under each of the Policies triggered by the Asbestos Suits.” (Id.)
“Plaintiffs also sought additional, detailed declarations regarding the duties of the insurers with
respect to asbestos actions against Cummins Corp.” (Id.) U.S. Fidelity demurred to Holding
Co.’s declaratory relief cause of action, arguing, among other things, lack of standing. The trial
court agreed, granted U.S. Fire’s joinder, and dismissed Holding Co.’s claims. (Id. at 1488.)
Holding Co. appealed. (Id. at 1489.) The California Court of Appeal, First Appellate District,
Division Two, affirmed the judgment dismissing Holding Co.’s complaint for declaratory relief.
(Id. at 1486.)
The Court of Appeal noted “Holding Co…asserts that it is an interested person under
section 1060, despite the fact that it is not a party to or directly affected by the insurance policies
that are the subject of the declaratory relief action, and despite the fact that it does not otherwise
fit into any of the categories of exceptions to the requirement of contractual privity. [Citation]”
(Id. at 1490.) Holding Co. argued it has a “practical interest in the proper interpretation of
Cummins Corp.'s insurance policies given its relationship to, and its central role in the pursuit of
those insurance assets’” and claimed it “‘is, most importantly the sole entity responsible for
managing the affairs of Cummins Corp., including making decisions as to litigation strategy,
resolution and settlement.’ [Citations] (Id. at 1490-1491.) “Therefore, according to Holding Co.,
it is ‘[a]ny person interested under a written instrument…or under a contract, or who desires a
declaration of his or her rights or duties with respect to another’ for purposes of participating in a
declaratory relief action against the insurers. [Citation]” (Id. at 1491.)
The Court of Appeal disagreed with Holding Co., stating as follows:
This argument is not persuasive. While Holding Co. may, as it says, have a
“practical interest” in the success of Cummins Corp.’s litigation with the insurers
by virtue of its relationship with the corporation, it has not shown how that
indirect interest—no matter how enthusiastic it may be [Citation]—translates into
“a legally cognizable theory of declaratory relief.” [Citation] Rather, as the trial
court found, it is the corporation itself that has a direct interest in the
interpretation of the policies in question.
(Id.) The Court of Appeal concluded that “Holding Co. has not alleged any facts or legal theory
giving it more than an indirect interest in the policies at issue. [Citations]” (Id. at 1493.) The
Court of Appeal stated “Holding Co. has not demonstrated the existence of an actual controversy
between it and the insurers” and, hence, “the only proper parties to this declaratory relief action
are Cummins Corp. and the insurers.” (Id.) The Court of Appeal stated:
Page 45 of 48

 In conclusion, given that Holding Co., the controlling shareholder of Cummins
Corp., does not have a contractual relationship with the insurers and is not
otherwise interested in the contract between the corporation and the insurers (see
§ 1060), the trial court acted within its discretion when it concluded that a
declaration of Holding Co.’s rights was “not necessary or proper at the time under
all the circumstances.” (§ 1061.) In addition, because Holding Co. has not shown
that there is a reasonable possibility it could amend the complaint to plead facts
showing that it is a “person interested under a written instrument” or
demonstrated the existence of an “actual controversy relating to the legal rights
and duties” of it and the insurers (§ 1060), the court did not abuse its discretion
when it sustained the demurrer without leave to amend.
(Id. at 1493-1494.)
Application of the foregoing precedent demonstrates that Netflix lacks standing to
challenge the validity of other present or former unidentified Fox employees’ Fixed-Term
Employment Agreements. First, Netflix is not a party to Fox’s Fixed-Term Employment
Agreements, nor does Netflix have an interest in such agreements. Yet Netflix is attempting to
settle the rights of all Fox employees who are subject to Fixed-Term Employment Agreements,
whether or not the employees want to challenge the agreements. Second, Fox’s fixed-term
employees, who are the real parties in interest, are not parties to the instant action whereas
Netflix is not the real party in interest. Third, Netflix is not the proper advocate for Fox’s fixedterm employees. Netflix has its own agenda – to invalidate Fox’s Fixed-Term Employment
Agreements so that it may recruit and hire Fox’s fixed-term employees without restriction or
limitation. While Netflix has a potential indirect interest in invalidating contracts for those Fox
employees it wishes to hire, if any, the court finds that Netflix does not have a legally cognizable
interest in Fox’s Fixed-Term Employment Agreements sufficient to justify its declaratory relief
cause of action.

c. Actual Controversy & Unlawful, Unfair, or Fraudulent Business Act or Practice
“‘The UCL prohibits, and provides civil remedies for, unfair competition, which it
defines as ‘any unlawful, unfair or fraudulent business act or practice.’’ [Citation]” (Orcilla v.
Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1012.)
A cause of action for declaratory relief requires an “actual controversy.” (C.C.P. §1060.)
“For declaratory relief, the party must show it either has suffered or is about to suffer an injury of
‘sufficient magnitude reasonably to assure that all of the relevant facts and issues will be

Page 46 of 48

 adequately presented.’ [Citation]” (Stonehouse Homes LLC v. City of Sierra Madre (2008) 167
Cal.App.4th 531, 542.)27
Netflix cannot establish the existence of an actual controversy with Fox and cannot
establish Fox engaged in any unlawful, unfair, or fraudulent business act or practice. As
discussed above, Netflix lacks standing to challenge the validity of Fox’s Fixed-Term
Employment Agreements and Fox’s fixed-term employees are indispensable parties. Also, for
the reasons discussed above, the court does not find that the challenged provisions in the FixedTerm Employment Agreements of Waltenberg and Flynn violate public policy or are
unconscionable. Further, offending provision(s) can be severed. (See Bardin v. DaimlerChrysler
Corp. (2006) 136 Cal.App.4th 1255, 1277 (“As discussed ante, plaintiffs failed to state claims for
unfair competition and violation of the CLRA. There are no other facts that reveal an actual
controversy exists between the parties. Therefore, the second amended complaint did not state a
claim for declaratory relief. [Citation]”) For the same reasons, Netflix’s violation of Business &
Professions Code §17200 cause of action fails. (See Wolski v. Fremont Investment & Loan
(2005) 127 Cal.App.4th 347, 357 (“Plaintiff acknowledged in the trial court he could not amend
this cause of action, and we agree with that conclusion. Because the cause of action for violation
of Business and Professions Code section 17200 was predicated on the violation of the predatory
lending law, it, too, must fail.”).)
Even assuming, arguendo, Netflix has standing, the violation of Business & Professions
Code §17200 and declaratory relief causes of action fail. As discussed above, Netflix failed to
demonstrate that the challenged provisions in Fox’s Fixed-Term Employment Agreements
violate public policy or are unconscionable. Moreover, were the court to determine – in an
action in which all of the proper parties were joined and the facts and circumstances
demonstrated the unconscionability and/or violation of public policy of any allegedly offending
provisions – such provisions may be properly severed from any agreement(s) at issue, rather than
declaring the agreement(s) void.
In light of the court’s ruling, Fox’s motion for summary judgment on Netflix’s amended
cross-complaint is granted. In the alternative, for appeal purposes only, Fox’s motion for
summary adjudication of Netflix’s declaratory relief and violation of Business & Professions
Code §17200 causes of action is granted.
F. Conclusion
Fox’s motion for summary judgment on the complaint is denied. Fox’s motion for
summary adjudication of the inducing breach of the Waltenberg Agreement and inducing breach
of the Flynn Agreement causes of action is denied. Fox’s motion for summary adjudication of
the unfair competition in violation of Business & Professions Code §17200 cause of action is
granted. The court finds Fox is entitled to injunctive relief, as follows: Netflix shall not solicit
employees who are subject to valid Fixed-Term Employment Agreements with Fox or induce
such employees to breach their valid Fixed-Term Employment Agreements with Fox.
Netflix cannot obtain declaratory relief as to former Fox employees. “[D]eclaratory relief operates prospectively
only, rather than to redress past wrongs…” (Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1404.)
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 Fox’s motion for summary judgment on Netflix’s amended cross-complaint is granted.
In the alternative, for appeal purposes only, Fox’s motion for summary adjudication is granted as
to the violation of Business & Professions Code §17200 and declaratory relief causes of action.
Fox’s motion for summary adjudication of the violation of public policy and
unconscionability affirmative defenses in Netflix’s second amended answer is granted.

Dated: November 25, 2019
Hon. Judge Marc D. Gross
Judge of the Superior Court

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