Three claims survived – and one involves a workplace deal HR can't ignore
A federal court ruled that Blake Lively was not an employee – a finding that wiped out her sexual harassment claim under Title VII.
On April 2, 2026, Judge Lewis J. Liman of the U.S. District Court for the Southern District of New York handed down a 152-page ruling in Lively's case against co-star Justin Baldoni and the production companies behind the film It Ends With Us. The court dismissed ten of her thirteen claims – but allowed three to proceed to trial, including retaliation under California's Fair Employment and Housing Act and breach of a workplace safety agreement.
The case stems from events during and after the production of the 2024 film, which was co-produced by Wayfarer Studios and Sony and based on Colleen Hoover's bestselling novel about domestic violence. Lively brought thirteen causes of action against Baldoni, Wayfarer Studios, its CEO Jamey Heath, co-chair Steve Sarowitz, the special-purpose production entity It Ends With Us Movie LLC, and several public-relations consultants. Her claims ranged from sexual harassment and retaliation under federal and California law, to breach of contract, defamation, and civil conspiracy.
The threshold question – and the one with the broadest implications for anyone managing a blended workforce – was whether Lively qualified as an employee at all. The court concluded she did not. Applying the well-established thirteen-factor test used to distinguish employees from independent contractors under federal law, the court found that Lively exercised extensive control over the production. She held contractual approval rights over the script, the director, her co-lead, hair and makeup, filming locations, and the use of her name and likeness. In practice, she went much further – leading the production's location shift from Boston to New Jersey, rewriting portions of the script, overseeing editors, reviewing casting tapes, selecting most of the film's music, and managing what she herself described as daily HR concerns on set. Her engagement was limited to a defined project, she was paid a flat fee plus contingent compensation, and she was free to take on other work outside her filming window, which she did.
That classification had immediate consequences. Because Title VII protections apply only to employees, Lively's federal sexual harassment and retaliation claims were dismissed outright. The same result followed for her retaliation claim under the California Labor Code, which carries the same requirement.
California's Fair Employment and Housing Act, however, cast a wider net. Its harassment provisions extend beyond employees to anyone providing services under a contract. While the court still dismissed Lively's harassment claim under that statute on other grounds, her retaliation claim survived. The court found enough in the record to create a triable question about whether the defendants took adverse action against Lively after she raised workplace safety concerns and negotiated protections ahead of returning to set.
Those protections are at the center of the second surviving claim. After production paused in mid-2023 due to industry-wide labor strikes, Lively's attorney sent the producers a list of seventeen conditions – titled Protections for Return to Production – that would need to be met before she would agree to come back. The list included requirements for intimacy coordinators and nudity riders for all intimate scenes. Those terms were eventually formalized in a Contract Rider Agreement signed in January 2024. The agreement included a clause prohibiting any retaliation against Lively for raising her concerns.
The defendants argued the agreement was unenforceable, either because it lacked consideration or because it was tethered to a longer-form contract that was never signed. The court rejected both arguments. It found that Lively's decision to return to set – when her obligation to do so was genuinely uncertain – was itself sufficient consideration. And it held that the agreement stood on its own, independent of the unsigned long-form contract. The breach of that agreement now heads to trial.
The third surviving claim concerns The Agency Group PR LLC, the firm engaged by the defendants to execute what Lively characterized as a retaliatory public-relations campaign. The court dismissed aiding and abetting claims against the individual PR consultants, finding they were acting as agents of the employer. But it left the door open for the PR firm itself, as a business entity, to face liability – a question the court said the parties had not adequately addressed and that would need to be resolved going forward.
The remaining claims were dismissed. The false light invasion of privacy claim failed because New York law, which the court found applicable based on Lively's domicile, does not recognize that tort. The defamation claim was barred by the fair report privilege, as the statements at issue were made by the defendants' attorney in connection with the litigation and would have been understood by any reasonable reader as commentary on a judicial proceeding. The civil conspiracy claims were also dismissed. Most failed because the underlying torts they depended on did not survive, and the FEHA retaliation conspiracy was separately rejected because the court found it could not be used to circumvent the limitations California law places on extending liability for another's conduct.
The case is not over. Three claims will go to trial, and the outcome could further clarify how workplace safety agreements hold up in court and whether outside vendors face exposure when they carry out allegedly retaliatory employer conduct. For HR professionals watching from the sidelines, the immediate lesson is straightforward: worker classification is not a technicality. It is the gateway to the protections that follow – or do not.
