Blake Lively and Justin Baldoni co-starred in the film It Ends With Us, a movie exploring domestic violence based on a Colleen Hoover novel. Baldoni co-founded Wayfarer Studios and also directed the film. Lively’s role was negotiated through her loanout company, Blakel, Inc., under an Offer Letter dated May 4, 2023. The parties never executed the contemplated long-form Actor Loanout Agreement (“ALA”), though they negotiated it for over a year while filming proceeded. A separate Contract Rider Agreement (“CRA”) was signed in January 2024, setting conditions — including a no-retaliation clause — under which Lively would return to production after the 2023 WGA/SAG-AFTRA strikes.

Lively alleged in the lawsuit she filed in the United States District Court Southern District of New York that during the first phase of filming in New Jersey, Baldoni and Wayfarer CEO Jamey Heath subjected her to sexual harassment and a hostile work environment — including comments about her body, an intrusion on her physical privacy while she was undressed, pressure to perform nudity beyond what was agreed, and discussions of personal sexual matters. In November 2023, Lively’s attorneys sent a “Protections for Return to Production” letter identifying seventeen conditions for her return to set. A January 4, 2024 all-hands meeting addressed these concerns, and the CRA was signed shortly after. Lively alleged that following the film’s August 2024 release, the defendants launched a coordinated public-relations campaign — engaging crisis consultants, digital operatives, and media contacts — to destroy her reputation in retaliation for her complaints. Expert reports submitted by Lively showed statistical evidence of artificially manipulated online content targeting her.

In the Opinion and Order on Motions for Judgment on the Pleadings and Summary Judgment in the case of Lively v. Wayfarer Studios LLC No. 24-cv-10049 (S.D.N.Y.) on April 2, 2026, Judge Liman ruled on the Wayfarer Parties’ combined motions for judgment on the pleadings and for summary judgment on all thirteen of Lively’s claims, which spanned Title VII, California FEHA, California Labor Code § 1102.5, breach of contract, defamation, false light invasion of privacy, and civil conspiracy.

The court granted the motions on most claims but denied them on three: (1) Lively’s FEHA retaliation claim against IEWUM and Wayfarer (Count Four); (2) her FEHA aiding-and-abetting retaliation claim against The Advocacy Group, LLC (Count Seven); and (3) her breach of the CRA claim against It Ends With Us Movie LLC (Count Nine). All other claims — including Title VII, California Labor Code § 1102.5, FEHA sexual harassment, defamation, false light, civil conspiracy, and breach of the ALA — were dismissed.

Employment Status (Title VII and California Labor Code). The court held that Lively was an independent contractor, not an employee, under both the federal Reid factors and California’s Borello test. Lively enjoyed extensive contractual approval rights over the script, director, co-lead, wardrobe, marketing, and release pattern; she exercised significant practical control over hiring, firing, editing, and production logistics; she was paid a flat fee plus equity through her loanout entity with no tax withholding or benefits; and her engagement was limited to a single six-week project. Citing Alberty-Velez v. Corporacion de Puerto Rico Para La Difusion Publica, 361 F.3d 1 (1st Cir. 2004), and Lerohl v. Friends of Minnesota Sinfonia, 322 F.3d 486 (8th Cir. 2003), the court reasoned that a director’s creative control over an actor does not automatically convert the actor into an employee, and that Lively’s independence — both contractual and practical — was overwhelming.

Contract Claims. The ALA was found unenforceable because it was never signed, IEWUM consistently insisted on execution as a condition precedent, and Lively could not identify which draft bound the parties or when. The CRA, however, was enforceable: it was signed by both parties, supported by valid consideration (Lively’s agreement to return to set when her obligation to do so was doubtful), and its anti-retaliation clause was not dependent on execution of the ALA.

Why a New York Federal Court Applied California FEHA. This is the opinion’s most significant issue. California law presumes its statutes do not apply extraterritorially, citing Diamond Multimedia Systems, Inc. v. Superior Court, 968 P.2d 539 (Cal. 1999), and courts have consistently held that FEHA does not reach conduct occurring outside California. See Campbell v. Arco Marine, Inc., 50 Cal. Rptr. 2d 626 (Cal. Ct. App. 1996). The ALA’s California choice-of-law clause could not resolve this issue because the ALA was never executed.

The court therefore applied the Campbell framework, which asks whether the “core of the alleged wrongful conduct” — particularly the “ultimate” or “crucial” discriminatory acts — occurred in California. For the sexual harassment claims, the answer was no: the alleged hostile-work-environment conduct occurred on a New Jersey film set, and California connections such as Heath’s text messages or pre-production Zoom calls were too peripheral to constitute “core” wrongdoing. The court rejected Lively’s argument that retaliatory acts committed from California could bootstrap her harassment claims into California’s territorial reach, noting that the alleged retaliation occurred after the working relationship ended and thus could not create a hostile work environment.

For the retaliation claims, however, the court reached the opposite conclusion. The allegedly retaliatory smear campaign was planned, directed, and largely executed from California. Baldoni and Heath — both California residents — directed their California-based PR consultants (TAG, Nathan) to implement the campaign. TAG retained a digital operative (Wallace) from California. The “decision to take retaliatory actions was made in California,” which courts have held satisfies the territorial nexus. See eShares, Inc. v. Talton, 2025 WL 936921, at *15 (S.D.N.Y. Mar. 27, 2025). The court further noted that FEHA’s anti-retaliation provision protects “any person” — not just employees — meaning Lively’s independent-contractor status did not bar her FEHA retaliation claim. See Fitzsimons v. California Emergency Physicians Medical Group, 141 Cal. Rptr. 3d 265, 269 (Cal. Ct. App. 2012).

Retaliation — Triable Issues. The court found genuine factual disputes on all three elements of the FEHA retaliation claim: (1) Lively engaged in protected activity through the Protections Letter and all-hands meeting, and it was reasonable for her to believe she was opposing sexual harassment; (2) the Wayfarer Parties’ campaign — including statements about wanting to “bury” and “destroy” Lively, coordination with digital operatives whose work would be “untraceable,” and expert evidence of artificially manipulated online content — could constitute adverse employment action materially impairing her career prospects; and (3) a jury could infer retaliatory motive from the sequence of events and the Wayfarer Parties’ documented anger over Lively’s complaints.

Remaining Claims Dismissed. The defamation claim was barred by New York’s fair-report privilege because all challenged statements were made by counsel in connection with judicial proceedings. The false-light claim failed because New York law — which governed under choice-of-law analysis focused on Lively’s New York domicile — does not recognize the tort. Civil conspiracy claims fell with the underlying torts they were predicated on. Individual aiding-and-abetting claims against Nathan and Abel were barred under Reno v. Baird, 957 P.2d 1333 (Cal. 1998), which prohibits personal liability for individual nonemployer agents, though the court reserved judgment on TAG’s potential liability as a business-entity agent under Raines v. U.S. Healthworks Medical Group, 534 P.3d 40 (Cal. 2023).

The case is scheduled to proceed to trial on May 18, 2026 in New York.

New York Federal Court Extends FEHA Reach in High Profile Case