Former Exec Claims Netflix Defamed Him

LOS ANGELES (CN) - Netflix defamed a former executive by claiming he stole its secrets after leaving the "cold and hostile" company to take a job at Amazon, and used its close business ties with the online retailer to get him fired, the man claims in court.

Jerry Kowal sued Netflix, CEO Reed Hastings, chief content executive Ted Sarandos and Amazon in Superior Court. He alleges defamation, false light invasion of privacy, civil conspiracy, intentional interference with employment relationship, blacklisting and wrongful termination.

Describing his legal dispute with the digital streaming service as a "David and Goliath" battle, Kowal claims that Netflix and Amazon conspired in a "cutthroat and unlawful campaign" to blacklist him, after Netflix had publicly accused him of stealing confidential and proprietary documents.

Kowal says he worked for a year as a content acquisition executive at Netflix's Beverly Hills office. But in June 2013 he says he grew tired of the company's "cutthroat environment," and announced that he was leaving to work for the digital video team at Amazon.

Netflix offered him a raise to stay, Kowal says. But when he told the company his mind was made up, Sarandos allegedly badmouthed him to Amazon, forecast that its competitor's video business would close within two years and warned him that he would "regret going to Amazon."

To punish Kowal for this "perceived slight," Netflix falsely accused Kowal of stealing confidential information and passing it on to Amazon, he claims.

In July 2013, at a quarterly business review in San Francisco, Hastings and Sarandos told 200 employees that Kowal was under investigation for taking confidential documents, the complaint states.

The company forbade Netflix employees from communicating with Kowal and branded him a "'traitor'" and a "thief," according to the lawsuit. (49)

"Kowal, in fact, did not 'steal' any confidential information, nor disclose any Netflix information to Amazon or otherwise use such information to compete against Netflix," the complaint states.

Kowal says that Amazon convinced him to hand over his personal computer, email accounts and a USB thumb drive to Netflix and a forensic analysis firm, SFL Data, ostensibly to put the matter to rest.

Though an internal Amazon investigation and a forensic analysis revealed no wrongdoing, Kowal says, his new employer refused to stand by him.

Kowal was placed on mandatory leave, had had his laptop confiscated, and was locked out of the company's servers and his email account, he says.

"Knowing that false statements about the circumstances of Kowal's termination from Amazon have been circulated within the industry, Amazon has refused to provide written verification of the results of its investigation, which would enable Kowal to rebut the false statements," the complaint states.

He puts that down to Netflix's business ties with Amazon.

Kowal says Netflix pays hundreds of millions of dollars each year to Amazon for a cloud platform that stores all the content that the service streams to its subscribers.

"Netflix and defendant [Reed] Hastings leveraged Netflix's status as a key Amazon customer and contacted the highest levels of Amazon's senior management to secure Amazon's assurance and guarantee that Kowal's employment with Amazon would be terminated irrespective of the results of the investigation," the lawsuit states.

Amazon fired him in July 2013 under its strict liability policy, Kowal says.

Seeking at least $1 million in damages, Kowal is represented by Caroline Mankey with Cypress LLP.

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