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Tortious interference goes beyond fair competition

On Behalf of | Mar 17, 2020 | Business Litigation |

Tortious interference is a misdeed, or civil tort, in which someone unfairly gets in the way of a contract someone else has signed with a third party. Sometimes, such torts are a case of one company “poaching” talent from another.

You do not have to be in show business to be a victim of tortious interference, or to be guilty of it. But many Americans would rarely hear of this tort if it did not appear in so many lawsuits in the sports and entertainment industries.

The basic idea of tortious interference

Competition is a cornerstone of a free market. Two bakeries can bid for the services of a great baker.

But when a company interferes with the business dealings of another in a way that breaks even the free-wheeling ethics of the free market, it can be tortious interference

Say one bakery already has a contract with the baker and another bakery blackmails, threatens or essentially bribes the baker to break that contract. Perhaps the intent of luring the baker away was even to permanently shutter the contracting bakery.

That sounds like unfair competition and possibly the basis of a successful lawsuit. Note that both the first bakery (with the fair contract) and the blackmailed baker might file the lawsuit against the interfering bakery.

An old-time show-business fight sets a precedent

The very idea of tortious (usually pronounced TOR-shuss) interference was first enshrined in the law when two theater owners went to court over a singing sensation.

In 1853, Johanna Wagner signed a contract with Queen’s Theatre to do a string of London performances. However, Covent Garden Theatre convinced her to break that contact by offering her more money.

The Queen’s sued Covent Garden for wrongfully interfering with the contract. The Queen’s won, Covent Garden paid up, and tortious interference has been a common fixture of tort law ever since.

Digital giants fight over tortious interference claim

In recent months, a suit between Fox Studios and Netflix got a little nasty.

Fox claimed Netflix had induced or poached two Fox executives away from their contracts. Netflix raised the heat by claiming Fox’s contracts with the executives had amounted to involuntary servitude violating California’s public policy and statutes.

In the end, it appears Netflix agreed to stop poaching and will not pursue the involuntary servitude accusation. And in return, Fox will not pursue the lawsuit for tortious interference.