On November 1, 2018, the California Court of Appeal, Fourth Appellate District affirmed a trial court’s ruling in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. et al., No. D071924, 2018 WL 5669154 (Cal. App. 2018), which (1) invalidated the plaintiff’s non-solicitation of employees provision in its Confidentiality and Non-Disclosure Agreements (CNDAs), (2) enjoined AMN from enforcing or attempting to enforce the employee non-solicitation provision in its CNDA with any of its former employees, and (3) awarded $169,000 in reasonable attorneys’ fees to defendants for plaintiff’s use of the provision.

The case is a significant decision which may impact some employers’ continued use of employee non-solicitation provisions with their California employees, at least in certain industries. There is now a split in California authorities and the issue is likely ripe for California Supreme Court guidance.

AMN and Aya are competitors in the business of staffing temporary healthcare professionals, namely providing “travel nurses” to medical care facilities across the country.  When former employees, named as individual defendants in the action and who worked as travel nurse recruiters in California, left AMN for Aya, AMN brought suit against Aya and the former employees, asserting 11 causes of action, including for breach of contract and trade secret misappropriation. Continue Reading California Appellate Panel Affirms Injunction Blocking Use of Employee Non-Solicitation Provision in Dispute Between Travel Nurse Providers

On October 9, Los Angeles County Superior Court Judge Frederick Shaller confirmed his tentative decision weeks earlier that the “show cause” penalty in the NCAA’s bylaws violates California law.

The decision was issued as a tentative ruling on plaintiff (former running back coach at USC) Todd McNair’s claim for declaratory relief. McNair sought—and received—a determination that the NCAA bylaw provisions including the “show cause order” penalty levied against him were void under Cal. Bus. & Prof. Code § 16600.      Continue Reading California State Court Rules that NCAA “Show Cause” Penalty Constitutes an “Unlawful Restraint” Under California Law

A Ninth Circuit panel consisting of Judges A. Wallace Tashima, Johnnie B. Rawlinson, and Paul J. Watford recently heard oral argument in Anheuser-Busch Companies v. Clark, 17-15591, concerning the denial of a former employer’s anti-SLAPP motion in a trade secret misappropriation and breach of contract case. This is the second time the case has made its way up to the Ninth Circuit. We previously reported on this case in March 2017. The panel has not yet issued its decision but the Ninth Circuit’s decision could have far reaching implications for trade secret and data theft cases involving purported whistleblowing activities. Continue Reading Hold My Beer: Ninth Circuit Hears Oral Argument in Trade Secret/Anti-SLAPP Row for a Second Time

Back in 2015, we covered the divided holding of the Ninth Circuit in Golden v. California Emergency Physicians Medical Group, that a “no re-hire” provision in a settlement agreement could constitute a restraint of trade in violation of California law. After a second round at the Ninth Circuit, the case has been reversed and remanded yet again, based on the panel majority’s conclusion that the “no re-hire” provisions at issue were overbroad and unenforceable. Continue Reading Ninth Circuit Confirms “No Re-Hire” Clauses Can Constitute Unlawful Restraints of Trade in California

Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Compete Practice Group Co-Chair Robert Milligan is on the panel for the “Hot Topics in Trade Secret Litigation: the DTSA, Remedies, Anti-SLAPP, and Constitutional issues” session on November 8, at the California Lawyers Association Intellectual Property Institute in San Jose, California.

The “Hot Topics in Trade Secret Litigation” session will cover some of the most intriguing (and vexing) topics in trade secret litigation and will provide attendees valuable insights from the trenches. The panel will address a broad range of issues, including:

  • The Defend Trade Secrets Act (DTSA)
  • Trade secret misappropriation as the predicate act of a RICO claim
  • Damages and entitlement of alternative monetary relief
  • Anti-SLAPP issues
  • Constitutional issues, such as the First Amendment, the Fifth Amendment, and the Seventh Amendment

For more information or to register for the IP Institute, click here: https://calawyers.org/Sections/Intellectual-Property-Law/Education/IP-Institute

A three-judge panel of the Ninth Circuit Court of Appeals1 recently upheld the position of the California Attorney General (AG) that charities located or doing business in California must provide a copy of their unredacted Form 990 Schedule B, including the names, addresses and contribution amounts for all donors listed with the annual report filed with the AG.2 While the AG has indicated that the collected information will not be made publicly available, this is unwelcome news for charities that are concerned about protecting their donors’ identities.3 Continue Reading Ninth Circuit Court of Appeals Reaffirms CA Attorney General’s Demand for Donor List

The Attorneys General of ten states are investigating fast food franchisors for their alleged use of “no poach” provisions in their franchise agreements, according to a press release by the New Jersey Attorney General’s Office, and as reported by NPR.  In a July 9, 2018 letter, the Attorneys General for New Jersey, Massachusetts, California, Washington, D.C., Illinois, Maryland, Minnesota, New York, Oregon, Pennsylvania, and Rhode Island requested information from eight fast food companies about their alleged use of such provisions.  The letter states that the Attorneys General “have learned that certain franchise agreements used in our States and the District of Columbia . . . may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee.”  In other words, the agreements purportedly prohibit one franchisee of a particular brand from hiring employees of another franchisee of the same brand.   Continue Reading State Attorneys General Investigate Fast Food Franchisor “No Poach” Agreements

A recent California Court of Appeal decision held that the receipt, retention and dissemination of confidential information by a whistleblower’s attorney is protected by the state’s anti-SLAPP statute. MMM Holdings, Inc. v. Reich, 21 Cal. App. 5th 167 (2018).

Factual Background

In 2010, Jose “Josh” Valdez was promoted to president of MSO of Puerto Rico, Inc. (“MSO”), a wholly-owned subsidiary of MMM Holdings, Inc. (“MMM”). MMM offers Medicare advantage health insurance plans in Puerto Rico and contracted with the U.S. Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services. Continue Reading California Court of Appeal Holds That Disclosure of Confidential Information Protected by Anti-SLAPP Statute

Democratic U.S. Senators Elizabeth Warren (D-MA), Chris Murphy (D-Conn.), and Ron Wyden (D-Ore.) introduced legislation on April 26, 2018, entitled the Workforce Mobility Act (“WMA”). Although the text of the WMA is not yet available, according to various press releases, it would prohibit the use of covenants not to compete nationwide. In Senator Warren’s press release announcing her co-sponsorship of the bill, Senator Warren stated that “[t]hese clauses reduce worker bargaining power, stifle competition and innovation, and hurt Americans striving for better opportunities. I’m glad to join Senator Murphy to put an end to these anti-worker, anti-market agreements.”  Continue Reading Democratic U.S. Senators Seek to Abolish Non-Compete Agreements

For the third year in a row, the Washington state legislature failed to pass non-compete legislation, declining to take action on two separate bills that would have severely restricted employers’ ability to enforce former employees’ non-competition agreements. Continue Reading Washington State’s Legislature Rains on Non-Compete Critics’ Parade Yet Again