YouTube‘s hiring of longtime Disney executive Justin Connolly to serve in a newly-created role as global head of media and sports has sparked a lawsuit against the Google-owned company.
Disney, in a lawsuit filed on Wednesday in Los Angeles Superior Court, alleges breach of contract, tortious interference with contractual relations and unfair competition. It seeks a court order to block the hiring, arguing that Connolly could leak confidential information or trade secrets belonging to Disney ahead of a licensing renewal with YouTube.
Connolly and Disney last year entered into a deal in which he agreed to stay with the company until the end of 2027, according to the complaint. Under the terms, he was barred from engaging in dealings with competitors and had a one-time right to terminate the agreement for any reason as long as he provided written notice of his intent to exercise the provision.
The lawsuit accuses YouTube of inducing Connolly into breaching the employment agreement. Despite knowing of Connolly’s exclusive deal with Disney, YouTube offered Connolly a job to spearhead its media and sports division.
Disney learned of YouTube’s offer in April during a critical time in Connolly’s 20 year plus long tenure in which the company was in the midst of several important product launches and renegotiations of some of its largest distribution deals, according to the lawsuit. Notably, Connolly leads the Disney team negotiating a license renewal with YouTube.
“Connolly has intimate knowledge of Disney’s other distribution deals, the financial details concerning Disney’s content being licensed to YouTube, and Disney’s negotiation strategies, both in general and in particular with respect to YouTube,” writes Kevin Gaut, a lawyer for Disney, in the complaint. “It would be extremely prejudicial to Disney for Connolly to breach the contract which he negotiated just a few months ago and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him.”
Last week, Connolly notified Disney of his resignation. When asked if he intended to work for YouTube, he allegedly didn’t respond. His exit comes as the company rolls out its new ESPN streaming service.
Disney declined to comment, while YouTube didn’t immediately respond to a request for comment.
The lawsuit is reminiscent of Fox in 2016 suing Netflix over the defection of production executive Tara Flynn and marketing executive Marcos Waltenberg, which led to a countersuit alleging that the executives’ respective Fox employment contracts were unenforceable as an illegal non-compete. In that case, the court ruled that Netflix can’t recruit the Fox execs.