On April 2, 2026, in Lively v. Wayfarer Studios LLC, 2026 WL 905447, the U.S. District Court, Southern District of New York (SDNY), addressed claims arising from the production of the film It Ends With Us involving actress Blake Lively, actor Justin Baldoni, and entities affiliated with Wayfarer Studios. Although pending in the SDNY, the decision analyzed several issues concerning protections under California’s Fair Employment and Housing Act (FEHA), including worker classification, the breadth of FEHA’s retaliation protections, and the territorial scope of California employment statutes.
Overview of the Claims
The dispute stems from the production of It Ends With Us, a film co-produced by Wayfarer Studios and Sony. Blake Lively alleges that director and co-star Justin Baldoni, Wayfarer executive Jamey Heath, and affiliated entities subjected her to sexual harassment and created a hostile work environment during production. Lively’s complaints centered largely on conduct occurring on set during the first phase of production in New Jersey, including alleged unwanted physical contact by Baldoni, comments about her weight and appearance, and an incident in which Heath allegedly viewed her in a state of undress without her consent.
According to the complaint, these concerns culminated in a January 2024 all-hands meeting, at which Lively presented a written list of conditions for her return to production. Lively alleges that, in response to these complaints, Wayfarer retained California-based public relations professionals, including The Agency Group PR LLC (TAG) and publicist Jennifer Abel, to plant false narratives portraying Lively as a “bully” and “mean girl,” and that Baldoni and Heath directed the execution of this campaign. Lively contends this campaign was intended to damage her reputation and career in retaliation for her complaints about harassment.
Lively’s claims included harassment and retaliation under FEHA, breach of contract, defamation, and other California statutory causes of action. The court granted the motions for judgment on the pleadings and summary judgment filed by Baldoni, Wayfarer Studios, and their co-defendants as to most of Lively’s claims, but denied those motions with respect to three claims that were allowed to proceed: Lively’s FEHA retaliation claim against Wayfarer Studios and It Ends With Us Movie LLC (IEWUM); an aiding and abetting retaliation claim under FEHA against TAG; and Lively’s breach of contract claim under the Contract Rider Agreement against IEWUM. The case remains pending in the Southern District of New York as to those surviving claims.
Worker Classification Analysis
As a threshold matter, the court considered whether Lively qualified as an employee or an independent contractor, ultimately concluding she was an independent contractor as a matter of law. Applying both federal and California standards, the court emphasized Lively’s economic independence, creative control, and project-based relationship with production. While film productions inherently involve scheduling demands and creative coordination, the court explained that such collaboration alone does not establish an employment relationship. This determination proved dispositive of several of Lively’s claims and may be relevant to companies in the film industry.
For the federal claims, the court applied a common-law agency framework, examining factors such as the degree of control exercised over the work, the skill required, duration of the relationship, method of payment, provision of benefits, tax treatment, and the worker’s ability to pursue other opportunities. The court’s California analysis similarly focused on control and economic independence under the Borello standard.
Across both frameworks, the court concluded that Lively exercised significant influence over key aspects of production, participated in creative decision-making, negotiated contractual protections, and retained the ability to pursue other professional opportunities outside the film. Those findings supported the conclusion that Lively functioned as an independent contractor, which proved dispositive for her Title VII and California Labor Code Section 1102.5 retaliation claims, both of which require an employment relationship.
FEHA Retaliation Claims Survive Independent Contractor Classification
The court concluded that Lively’s classification as an independent contractor did not bar her FEHA retaliation claim. FEHA’s anti-retaliation provision protects “any person” who opposes conduct prohibited by the statute and is therefore not limited to individuals in an employment relationship. On that basis, the court allowed the claim to proceed despite its finding that Lively was an independent contractor.
The retaliation allegations stemmed from Lively’s complaints regarding alleged harassment and workplace concerns during production, which the court found sufficient to constitute protected activity under FEHA. After those complaints were raised, Lively alleged that Wayfarer and affiliated defendants carried out a coordinated public relations campaign intended to damage her reputation and career.
The court concluded there were triable issues of fact on all three elements of the FEHA retaliation claim—protected activity, adverse employment action, and causation—and denied summary judgment accordingly. Notably, the court rejected the argument that the alleged campaign constituted only a reasonable defensive measure, finding that certain conduct, if proven, could go beyond permissible self-defense and rise to the level of actionable retaliation.
Scope of Adverse Action Under FEHA
Retaliation under FEHA is not confined to traditional employment actions such as termination, demotion, or discipline, but may also encompass broader conduct that could materially affect an individual’s professional standing. In that context, the court noted that allegations of a coordinated reputational campaign, if proven, could constitute actionable retaliation tied to Lively’s complaints.
The alleged campaign focused on reputational harm rather than conventional workplace actions. According to the complaint, public relations and crisis management professionals were retained to shape media narratives, place or amplify unfavorable stories, and portray Lively negatively in both traditional and online media. The court concluded that such conduct, if proven, could constitute a materially adverse employment action under FEHA because it was reasonably likely to impair future employment opportunities and professional standing, even absent a conventional employment decision such as termination or demotion. The court further noted that alleged retaliatory acts are to be considered collectively rather than individually, and that their impact must be evaluated in the context of the affected individual’s unique professional circumstances.
Territorial Reach of FEHA and Harassment Claims
The opinion also addressed the territorial reach of California employment laws. Lively argued that California law should apply based on Wayfarer’s connections to the state. The court rejected the application of California law to certain harassment claims, emphasizing that the key inquiry is where the alleged wrongful conduct occurred, not merely where the employer is headquartered. Because much of the alleged conduct took place outside California, the court held the connection insufficient as to those claims. The court did, however, allow the retaliation claim to survive, finding that Lively had adequately alleged that defendants coordinated a retaliatory “smear campaign” from California.
The geographic facts were central to this distinction. Much of the alleged harassment and workplace conduct occurred during principal photography in New Jersey, where Lively had negotiated to relocate production. That on-set conduct—primarily involving Baldoni and Heath—occurred outside California and did not support applying FEHA to the harassment claims. By contrast, the retaliation claim survived because it was alleged that the reputational campaign was planned and directed from California by Baldoni and Heath, both California residents, through California-based crisis management firm TAG and its principal. The court concluded this alleged California-based coordination sufficient to establish a nexus for applying FEHA to the retaliation claims.
Takeaways for Employers
The Lively decision reflects that classifying a worker as an independent contractor does not eliminate exposure under California employment statutes. FEHA’s retaliation protections extend beyond traditional employment relationships, allowing such claims to proceed even absent an employee-employer relationship. The decision also reflects a broader recognition that actionable adverse conduct may extend beyond conventional employment decisions to include reputational harm and coordinated public-facing actions.
