Former Exec Sues Amazon and Netflix for $1M
A former executive is suing Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX), claiming that Netflix used its position as an Amazon customer to ensure that he would be fired after leaving a position at Netflix to work for the e-commerce giant.
Jerry Kowal filed the suit in a Los Angeles Supreme Court on Tuesday, alleging defamation, false light invasion of privacy, civil conspiracy, intention of interference of employment relationship, blacklisting, and wrongful termination. The full complaint, obtained by The Hollywood Reporter, says that Netflix convinced Amazon “to aid in a cutthroat and unlawful campaign to effectively blacklist a once valued and profitable executive and prevent him from competing against it.”
Kowal described his position as director of content acquisition at Netflix as a “cold and hostile” work environment, which led him to resign in June to pursue a different position with Amazon’s digital video team. Kowal says that he was threatened when he left Netflix. “When Kowal announced his intent to leave, Netflix did everything it could to dissuade him. Netflix offered him higher compensation and more responsibility, and when that did not work, also bad-mouthed Amazon, warning Kowal that Amazon’s video streaming service would not last and that he would regret his decision to leave,” the complaint reads.
Netflix says that Kowal took secret information about Netflix to Amazon’s competing digital video service when he left the company. Kowal says that Netflix publicly accused him of stealing information as a form of blackmail, with CEO Reed Hastings and CCO Ted Sarandos telling 200 employees at a quarterly meeting that Kowal provided confidential documents to Amazon and instructing employees to cut off contact with him. Both Hastings and Sarandos are named as defendants in the suit.
Amazon and Netflix have an interesting relationship in that while they compete in terms of providing Internet video, Netflix is also an important Amazon customer. The prospect of losing Netflix’s business allegedly led Amazon to place Kowal on mandatory leave after receiving threatening emails from Netflix. Kowal says that Netflix’s letters to Amazon demanded that he be placed on leave and that his work computer be seized.
The suit claims that Kowal did not provide Amazon with any confidential information about Netflix. What’s more, Kowal was hired as an at-will employee, so he never signed anything agreeing not to take a competing position or to stay at Netflix for a certain period of time.
Kowal agreed to an investigation by Amazon that involved granting access to his personal technology and email, and the investigation, according to the complaint, found that he had not spread confidential information about Netflix to Amazon. Kowal then says that Amazon, again crumbling under pressure from Netflix, refused to make the results of the investigation public.
The complaint compares the fight to the Biblical story of David and Goliath, as two huge tech companies persecute one formerly renowned executive. Given the companies’ power and money and lawyers, it’s unlikely that either Amazon or Netflix will end up admitting to the behavior they’re accused of in the suit. This story probably won’t end with David defeating Goliath, but Kowal might just get away with some money in damages.
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