Blake Lively and Justin Baldoni have reached a settlement, ending one of Hollywood's most closely watched legal battles just two weeks before a scheduled trial. The agreement, announced Monday, resolves a dispute rooted in the turbulent production of their 2024 romantic drama "It Ends With Us" — a film about domestic violence that itself became the backdrop for bitter personal and professional conflict.

Lively, 38, had accused Baldoni, 42 — her co-star and the film's director — of sexually harassing her on set, including by allegedly adding unwanted kissing and intimate scenes to the script and making inappropriate remarks. She further claimed he and his publicists orchestrated a coordinated smear campaign to preemptively damage her reputation after she raised those concerns privately. Baldoni denied all of it, countersuing Lively and her husband, actor Ryan Reynolds, for defamation and claiming she had fabricated the allegations in an attempt to seize creative control of the film. The New York Times, which had published Lively's allegations, was also drawn into the legal proceedings.

In recent months, much of the case had already been stripped away by federal judges. Baldoni's $400 million defamation suit against Lively and Reynolds was dismissed in June 2025, and last month a judge threw out ten of Lively's thirteen claims, including the sexual harassment counts. Only allegations of defamation and breach of contract remained standing. The settlement therefore arrives with both sides having absorbed significant legal setbacks, and appears to spare them further damaging revelations that a trial would likely have produced — including private messages involving celebrity figures such as singer Taylor Swift.

In a joint statement, the two sides acknowledged the difficulties of the production without assigning blame. "We recognise that the process brought challenges and that the concerns raised by Ms Lively needed to be heard," the statement read. "We remain steadfastly committed to workplaces free from misconduct." Both expressed pride in the film and its spotlight on domestic violence, and called for "a respectful environment online." No financial terms were disclosed.

The settlement brings to a close a saga that captivated and divided public opinion for the better side of a year, drawing comparisons to the high-profile 2022 defamation trial between actors Amber Heard and Johnny Depp. For both Lively and Baldoni, who each suffered reputational damage during the proceedings, the agreement offers an off-ramp from further scrutiny — though the questions it raised about workplace conduct and reputation management in the entertainment industry are unlikely to fade quickly.