Justin Baldoni Dropped From Agency After Blake Lively Files Lawsuit

Justin Baldoni's agency William Morris Endeavor has severed ties with the embattled actor ... this just hours after Blake Lively filed a lawsuit against him.

Sources with direct knowledge confirmed the news to TMZ after multiple reports surfaced.

While no official reason was provided, it comes after his former costar Lively filed a suit alleging sexual harassment and a coordinated effort to destroy her reputation.

We broke the story ... in the suit, Lively claims production of "It Ends With Us" grew so toxic, the movie needed to stop down and have an all-hands-on-deck meeting about some of the alleged inappropriate behavior.

Among the topics of discussion, according to the lawsuit ... Baldoni allegedly showing a naked picture to Blake, talking about a past "pornography addiction," discussing sexual exploits and mentioning Blake's weight.

These demands -- and other -- were embraced by the studio, according to the lawsuit ... though differences in marketing strategy of the film persisted.

Blake's also claiming Baldoni and two crisis PR gurus -- Melissa Nathan and Jennifer Abel -- engaged in an attempt to hurt her reputation ... including a series of alleged messages obtained via a civil subpoena.

Justin's lawyer -- Bryan Freedman -- called the lawsuit's claims "false, outrageous and intentionally salacious with an intent to publicly hurt" ... adding Blake only filed it in an attempt to rehabilitate her image.

We've reached out to Baldoni about being dropped from WME -- which also reportedly reps Blake -- so far, no word back.