Blake Lively-Justin Baldoni Case Is an Employer Cautionary Tale

The film “It Ends with Us” has produced one of the most closely watched workplace misconduct cases in years.

The actor Blake Lively saw 10 of her 13 claims— including harassment, defamation, and conspiracy— dismissed against co-star and director Justin Baldoni in a 152-page-ruling from Judge Lewis J. Liman of the US District Court for the Southern District of New York.

The April 2 decision in Lively v. Wayfarer Studios LLC appeared as vindication for Baldoni. However, the three remaining claims—retaliation, aiding and abetting in retaliation, and breach of contract—underscore to employers that even if harassment allegations are dismissed, the risks and liabilities related to retaliation persist.

Harassment Claims

Lively’s harassment claims failed on two distinct legal grounds, neither of which turned on a finding that the alleged conduct didn’t occur, but rather more technical legal grounds. Liman determined that Lively was an independent contractor rather than an employee, and on that basis wasn’t entitled to bring sexual harassment claims under Title VII of the Civil Rights Act of 1964.

Her California state law claims also failed. Liman dismissed those claims on jurisdictional grounds, finding she had sued under California law, but the alleged wrongful conduct took place elsewhere and didn’t have a sufficient nexus to California.

In other words, the harassment claims didn’t fail because the court made a substantive finding on the alleged conduct. Instead, they failed because of Lively’s employment classification and where the conduct occurred.

What Survived

Here is the part of the ruling that every employer and human resources professional should absorb: While the harassment claims were dismissed, Liman allowed Lively to pursue her retaliation claims related to an alleged smear campaign by Baldoni’s public relations team.

Lively alleges Baldoni brought crisis PR professionals on board to undermine her before the premiere of their film—a preemptive strike designed to offset accusations he and his team worried she would eventually make against him. It’s important for employers to note that the alleged retaliatory act wasn’t a demotion or a termination; rather, it was a coordinated reputational attack.

Text messages publicized during discovery illustrated the alleged mentality around these efforts. One of Baldoni’s publicists allegedly sent a message stating, “You know we can bury anyone.”

Whether a jury ultimately finds that the campaign crossed into unlawful retaliation, those words alone offer a window into a mindset that may be sufficient to establish liability.

Takeaways for Employers

Lively v. Wayfarer Studios is unusual in its scale and celebrity, but not the legal dynamics at its center. The lesson for employers is that the pattern—complaint raised, underlying claim dismissed or not proven, retaliation follows anyway—plays out in workplaces of every size and industry.

Going forward, employers should keep in mind:

Retaliation claims have a lower evidentiary bar than harassment claims. To win a retaliation claim, a plaintiff doesn’t need to prove the underlying harassment occurred. They need to show they engaged in protected activity, that something adverse followed, and that the two are connected. A complaint that goes nowhere internally can still be the foundation of a viable and expensive retaliation suit.

The post-complaint period is when an employer’s liability risk is highest. The moment a concern is raised, formally or informally, the organization’s response becomes the subject of potential future litigation. Every decision made about that person’s duties, schedule, standing, relationships, and professional reputation from that point forward must be documented and defensible.

When an internal investigation results in a non-finding, or when a formal complaint doesn’t move forward, the organization must communicate that outcome carefully and monitor what happens to the complainant afterward. The post-complaint window is when the risk of retaliation is greatest and attention tends to drift.

Employers should treat every closed investigation as an ongoing obligation, not a completed task. Those who relax their vigilance after a complaint is closed are walking into the scenario that’s now headed to trial in New York.

Retaliation doesn’t have to look like a termination. The alleged conduct in Lively’s case involved crisis PR professionals, manufactured media narratives, and coordinated online attacks. In most workplaces, informal retaliation looks subtler: exclusion from key meetings, charged comments, altered assignments, social isolation, or quiet undermining of someone’s credibility with colleagues and leadership. These can be just as legally dangerous as formal adverse actions, and harder to detect in real time.

Independent contractors aren’t outside an employer’s duty of care. Retaliation protections are broader than harassment protections. Lively’s harassment claims failed in part because she was classified as an independent contractor, but the retaliation claims survived. Employers who work with contractors, freelancers, or project-based talent and assume that classification protects them from misconduct liability may open themselves up to more risk.

Protection against retaliation isn’t always confined to traditional employment relationships. From a practical standpoint, reputational and professional harm doesn’t depend on classification. A contractor can be marginalized just as effectively as an employee.

Having a harassment policy and conducting training isn’t enough. Wayfarer Studios had a policy strictly forbidding sexual “comments, stories, or innuendos” as well as sexual remarks about someone’s clothing or appearance—and Baldoni, as co-chairman, had attended the HR training where the policy was discussed. The gap between having a policy and enforcing a culture of accountability is precisely where liability lives. A signed training record doesn’t protect a company whose leadership ignores the policy’s substance.

Liman’s ruling will be remembered for Lively losing her harassment claims. The more important story is the retaliation claims that are going to a jury. Whatever the verdict, the case already has produced a clear lesson for employers: The dismissal of the underlying claim isn’t the end of the story.

The case is Lively v. Wayfarer Studios LLC, 2026 BL 108096, S.D.N.Y., 1:24-cv-10049 (Lead Case), 3/27/26.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Alisha Meyer is an attorney at Oppenheimer Investigations Group, an law firm that specializes in workplace and school investigations.

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