Netflix Inc. employees raised concerns about offensive material in Dave Chappelle’s new comedy special “The Closer” days before its release, warning executives that a series of jokes about gender-neutral pronouns and the genitalia of transgender people was potentially inflammatory and damaging. 

The company’s leaders, including global head of TV Bela Bajaria and co-Chief Executive Officer Ted Sarandos, decided the show didn't cross the line, sparking Netflix’s most significant public labor dispute in recent memory. Employees have taken their grievances to internal forums and Twitter; at least three were suspended for crashing a meeting, then reinstated following outcry. Now the company is planning to host an internal event with trans activist Alok Vaid-Menon; meanwhile, employees are planning a walkout on Oct. 20.

A Netflix spokesperson told Bloomberg News that the company supports artistic expression from its creators and encourages employees to disagree openly.

Sarandos has lauded Chappelle as the most-watched comedian on Netflix — 10 million people have put on “The Closer” since its debut, according to a person familiar with viewer numbers. Co-CEO Reed Hastings said the streaming platform will “continue to work with Dave Chappelle in the future,” he wrote on an internal message board. “We see him as a unique voice, but can understand if you or others never want to watch his shows,” Hastings wrote, according to transcripts of the comments seen by Bloomberg News.

The comedian’s popularity comes at a cost. Netflix spent US$24.1 million on the “The Closer,” slightly more than the US$23.6 million it paid for Chappelle’s 2019 special, “Sticks & Stones.” By comparison, the streaming service spent US$3.9 million for “Inside,” Bo Burnham’s recent hour-and-a-half special. The nine-episode “Squid Game,” which delivered the best debut in Netflix history, cost US$21.4 million.  

By Netflix’s own measurement, “Sticks & Stones” had an “impact value” of US$19.4 million, meaning it cost more than the value it generated, according to internal documents reviewed by Bloomberg. The company also evaluates its programs by “efficiency,” which balances a show’s reach with its price-tag. On that scale, Chappelle’s special scored 0.8 — less than the break-even score of 1. By comparison, Burnham’s “Inside” scored 2.8.

That doesn’t mean the show was unprofitable. (Netflix doesn’t report how much money any single offering makes the company.) Chappelle’s specials are among the most popular of any comedian on the service. “Sticks & Stones” won two Emmy Awards and a Grammy Award.

Netflix shares lots of company data, including salaries and quarterly results, with employees as part of its culture of freedom and responsibility. It does so on the condition that those employees don’t share financial results or the performance of individual titles with the public. But the Chappelle special has prompted leaks unprecedented in the company’s history.

“Our leadership has shown us that they do not uphold the values for which we are held,” one leader of Netflix’s transgender employee group wrote in a public Slack channel. “I encourage us to state clearly that we as Netflix employees are stunning not simply when we are doing the work that our roles demand of us, but also when we challenge the very principles of our company.”

While Chappelle’s comedy earned him a reputation as a leading voice on issues of race, this is not the first time one of his specials has enraged the trans community, or Netflix employees. After the release of “Sticks & Stones,” members of both the Black @ Netflix and Trans* employee groups met with company leadership, including Sarandos, Bajaria and then-Vice President of Original Content Cindy Holland to discuss their concerns.

The employees expressed dismay that the company continues to release programming with transphobic sentiments, and urged Netflix to offer a platform to transgender comedians and other people from marginalized groups. The company prides itself on open communication, and executives pledged to pay more attention to these issues in the future. 

Netflix has made inclusion a priority in recent years, hiring a head of diversity and inclusion in 2018 and starting initiatives to boost representation of different racial and ethnic minorities in Hollywood. The service moved the production of hit show “Outer Banks” out of North Carolina after the state passed a law seen as transphobic.

Netflix has been one of Chappelle’s biggest champions in recent years. The comedian soared to the peak of his profession with his Comedy Central TV series “Chappelle’s Show,” only to disappear from the spotlight for several years thereafter. He re-emerged as a stand-up comedian primarily on Netflix, taping several specials over the past few years. He is the type of famous creator with whom Sarandos loves to be aligned.

Much of the ire over the special isn’t coming from viewers but Netflix’s own employees. More than 1,000 people have called or messaged the company to complain about the special in the few days since it was released, a person familiar with those metrics told Bloomberg. That’s more than “Sticks & Stones,” but smaller than other big shows, like “Cuties.” 

The company has amended or removed programming in response to employee or public concerns in the past. Last year, it took down the sketch series “Little Britain” because of its use of blackface. This month, it altered the hit show “Squid Game” to shield a phone number from harassment. Another show, “13 Reasons Why,” which revolves around a teen’s suicide, was amended to include suicide-prevention resources and trigger warnings. 

Employees haven’t asked Netflix to take down the special. They would like to see more support for storytellers with different viewpoints, however. Tired of the company’s unqualified support for Chappelle, employees are speaking out.

One trans employee, Terra Field, criticized the special on Twitter. Field was one of three employees suspended for attending a meeting at the company’s quarterly business review. Field didn’t speak at the meeting, which was listen-only. Netflix has since reinstated the employees, but plans for the walkout remain.