After Most Claims Are Tossed, Lively Gets $407K in Fees

A federal judge has significantly narrowed Blake Lively’s lawsuit against her It Ends With Us co-star and director Justin Baldoni, leaving only three of her 13 claims: retaliation, aiding and abetting retaliation, and breach of contract. While the ruling dismisses her sexual harassment claims, it allows her core allegation–that she was targeted after reporting misconduct on set– to proceed to trial. The outcome turns on whether Lively was an employee or an independent contractor.

Judge Lewis Liman found that Lively was an independent contractor, emphasizing that “the freedom to accept other work from other sources lies at the very heart of the ‘independence’ inherent to independent contractors.” That conclusion was central to the dismissal of her sexual harassment claims under Title VII and related California labor laws, which apply only in an employment relationship. In analyzing her role, the court pointed to Lively’s approval rights over key creative elements, including the script, director, and co-lead actor, as well as her project-based compensation and equity stake in the film. Those factors, the court found, reflected substantial control and economic independence. Although Lively was required to devote six weeks exclusively to filming and worked under the director’s direction during production, the court held those facts were not enough to establish employee status.

The court acknowledged that certain features of the arrangement, including exclusivity during principal photography, could resemble employment. But it concluded those limits reflected the demands of filming, not economic dependence on a single employer. Because Lively was not an employee, the court held she could not proceed on her sexual harassment claims, regardless of the underlying factual disputes. Importantly, the court did not reach the merits of the alleged misconduct. Instead, it resolved the case on the threshold issue of classification, finding the statutory protections Lively relied on did not apply.

Lively’s retaliation claims under California’s Fair Employment and Housing Act (FEHA) were found to have merit. She alleged that Baldoni, Wayfarer Studios, and others, orchestrated a public-relations campaign portraying her as a “bully” and “mean girl” to damage her reputation after she complained about on-set conduct. The court found sufficient evidence for a jury to decide whether Lively engaged in protected activity and whether the alleged campaign amounted to unlawful retaliation. The court also pointed to factual disputes over whether the negative publicity surrounding Lively arose organically or through coordinated efforts involving the defendants and their representatives. Those issues, the court said, must be resolved by a jury.

The ruling highlights the importance of how a performer is classified in the entertainment industry. Because Lively was deemed an independent contractor, her harassment claims could not proceed under employment statutes, even though the underlying allegations were not resolved on the merits. However, the decision leaves open her ability to pursue those allegations through her remaining retaliation and related claims, which have since been settled. On May 4, 2026, Lively and Baldoni reached a confidential settlement, bringing their It Ends With Us legal saga to a close just weeks before the case was set to go to trial. Lively sought more than $8 million in attorneys’ fees, but on Aug. 26, Judge Lewis Liman awarded her $407,451.75. With that ruling, one of Hollywood’s most closely watched legal showdowns appears to have reached its closing credits.