Netflix, Inc. (NASDAQ:NFLX) has fired back at Twenty-First Century Fox Inc (NASDAQ:FOX) for suing it over the poaching of its two program development executives. The streaming giant has consequently filed a counter lawsuit accusing the studio giant of using an illegal non-compete clause on the employees’ contracts, which it states violates employees’ mobility rights.

California Laws

The Netflix claims could hold some water in California given that the state laws forbids employers from using clauses that restrict employees movement from one company to another. However, some companies continue to deploy the clauses in a bid to hold on to talent. By relying on non-compete clauses, the likes of Fox hope to fend off interest on their staff, more so from tech giants with big financial muscle.

While the use of non-compete clauses is not something new, Netflix believes the way Fox is using them all but goes to violate California laws. The streaming giant in its counter lawsuit insists that such clauses are not only anti-competitive but in violation of Section 16600, that protects workers’ rights

Fox has already responded to the claims by stating “These employment contracts are sought by many employees in the media industry because they guarantee tangible benefits. We look forward to vindicating our rights in Court.”

Non-Compete Clause Tussle

Fox suing Netflix does not come as a surprise given that it is already feeling the effect of the disruptive effect that the streaming giant is having in the industry. The cord cutting menace has already eroded earnings in Fox’s lucrative cable business, threatening the demise of the industry at large.

Netflix and Fox are not the first companies to find themselves entangled in a fierce tussle over staff. Tesla Motors Inc (NASDAQ:TSLA) is also on record complaining the poaching of its staff by Apple Inc. (NASDAQ:AAPL). Other tech giants have also found themselves in trouble with regulators for signing secret agreements intended to block the poaching of staff.

Netflix, Inc. (NASDAQ:NFLX) stock impressive run for the year continued on Wednesday having rallied by 2.59% to close the day at highs of $121.87 a share.