Judge Phyllis J. Hamilton of the Northern District of California issued an order this week on motions for partial summary judgment in Oracle Corp. v. SAP AG, et al., No. C 07-1658 PJH, 2010 WL 3258603 (N.D. Cal. Aug. 17, 2010) (slip op.). In considering whether recovery of “saved development costs” is an available measure of damages, the court distinguished Ajaxo, Inc. v. E*Trade Group, Inc., 135 Cal. App. 4th 21 (2005);
While the California Supreme Court will resolve this issue shortly, in Brookler v. Radioshack Corp., B212893, 2010 WL 3341816 (Cal. Ct. App. 2d Dist. Aug. 26, 2010), an unpublished opinion issued today, the Second District Court of Appeal held that “Unless and until our Supreme Court holds otherwise, we agree with the analysis in Cicairos which held an employer’s obligation under the Labor Code and related wage orders is to do more than simply permit meal breaks in theory; it must also provide them as a practical matter.”
Morry Brookler filed a class action complaint against Radioshack for its alleged failure to provide employees with a meal period of not less than 30 minutes during a work period of more than five hours. Id. *1. The trial court certified the class. Radioshack filed a second motion for decertification after issuance of the opinion in Brinker, 165 Cal. App. 4th 25 which the trial court granted. The California Supreme Court granted review in Brinker and the matter is currently pending. Continue reading
The Northern District of California considered whether an allegation of failure to allow overtime because of a plaintiff’s race or sex states a claim for discrimination under Title VII. The court held that it did.
In Moore v. Contra Costa College District, No. C 09-4781 MEJ, 2010 WL 3324895 (N.D. Cal. Aug. 23, 2010) (slip op.), Plaintiff filed an employment discrimination complaint as a pro se litigant, bringing suit under Title VII of the Civil Rights Act of 1964, specifically 42 U.S.C. § 2000e-5. Continue reading
In Swingless Golf Club Corp. v. Taylor, No. C 08-05574 WHA, — F. Supp. 2d —-, 2010 WL 3081255 (N.D. Cal. Aug. 6, 2010), plaintiff claims patent infringement, misappropriation of trade secrets, unfair competition under Section 17200 of the California Business and Professions Code, violation of the Lanham Act, 15 U.S.C. 1125(a), and breach of contract related to the “swingless” golf club. At the heart of the dispute is a golf club that is a:
pyrotechnic device that uses explosive charges, a wedge-shaped piston, and a trigger to blast golf balls hundreds of yards down a fairway. Designed for golfers who cannot (or would rather not) swing, this intriguing invention– which looks like a traditional golf club except that it is loaded with gunpowder . . . . Continue reading
In a positive development for both plaintiffs and defendants, a bill establishing an expedited jury trial procedure has sailed through the California Legislature. The Wall Street Journal Law Blog and The Recorder reported today that Assembly Bill No. 2284 was approved by the legislature on a unanimous vote. The bill, entitled the Expedited Jury Trials Act, was introduced by Assembly Member Noreen Evans (D-Santa Rosa). It calls for the establishment of strealined jury trials in civil cases, where the parties stipulate to them. Some of the highlights:
In Spencer v. World Vision, Inc., No. 08-35532, — F.3d —-, 2010 WL 3293706 (9th Cir. Aug. 23, 2010), the Ninth Circuit Court of Appeals considered whether a faith-based humanitarian organization is exempt from Title VII’s prohibition against religious discrimination. Defendant World Vision describes itself as “a Christian humanitarian organization dedicated to working with children, families and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice.” Id. *1. Continue reading
The U.S. Court of Appeals for the Eighth Circuit considered an appeal from a judgment following a bench trial, in Mayer Hoffman McCann, P.C. v. Barton, et al., No. 09-2061, — F.3d —-, 2010 WL 3155177 (8th Cir. Aug. 11, 2010). The district court granted judgment to Plaintiff Mayer Hoffman McCann, P.C. (“MHM”) , awarding MHM permanent injunctive relief and $1,369,921 in liquidated damages. Defendant appellant appealed, contending, among other things, that enforcement of the restrictive covenants is contrary to Missouri law. The Eighth Circuit rejected these contentions and affirmed the judgment of the district court.
Mayer Hoffman McCann, P.C. is national certified public accounting (CPA) firm. MHM sued its former employees and shareholders-Thomas L. Barton, Anthony W. Krier, James N. Stelzer, and John C. Walter (collectively, “appellants”), all CPAs licensed by the State of Minnesota-to enforce restrictive covenants contained in contractual agreements between the appellants and MHM. Following a bench trial, the district court granted judgment to MHM, awarding MHM, inter alia, permanent injunctive relief.
As part of a stock repurchase agreement, Appellants agreed that for the “Post-Employment Restrictive Period,” a period of two years following the termination of their employment, they would not: (1) solicit, directly or indirectly, or attempt to solicit MHM’s clients or otherwise interfere with MHM’s relationship with its clients, or (2) solicit MHM’s employees. Appellants further agreed not to copy, disseminate, or use MHM’s confidential information at any time.
Appellants asserted that the restrictive covenants are unreasonable in scope and, therefore, unenforceable. The court rejected this argument, holding that the two year restrictive covenant “has been found reasonable under the “overwhelming weight of case authority” and was “reasonable under Missouri law”. Id. *10 (citing Missouri Alltype Fire Prot. Co. v. Mayfield, 88 S.W.3d 120, 123 (Mo. Ct. App. 2002)).
Although the restrictive covenants in this case are not restricted geographically, Missouri law recognizes that a customer restriction may substitute for an explicit geographical restriction. See Schott, 950 S.W.2d at 623-24, 627 (concluding that a two-year restriction on CPAs soliciting their former employer’s customers, or doing any accounting work for them, was enforceable, without a geographical restriction, because “the covenant does not prevent employees from practicing in any particular geographical area, it merely prohibits them from soliciting employer’s clients”); Mills v. Murray, 472 S.W.2d 6, 11-12 (Mo. Ct. App. 1971) (determining that a three-year restrictive covenant was reasonable, even absent a geographical restriction, because the former employee was only restricted from soliciting his former employer’s clients such that he could even “conduct a competing business at [his former employer’s] doorstep as soon as [he] left [his former employer’s] service”). As the Schott Court observed, where “the specificity of limitation regarding the class of person with whom contact is prohibited increases, the need for limitation expressed in territorial terms decreases.” 950 S.W.2d at 627 (quoting Seach v. Richards, Dieterle & Co., 439 N.E.2d 208, 213 (Ind. Ct. App. 1982)). Under Schott and Mills, the restrictive covenant at issue here is not unenforceable, even though it lacks a geographical restriction, because it only prohibits appellants from soliciting MHM clients-not from performing services for MHM’s clients whom the appellants did not solicit. Furthermore, even if the restrictive covenant completely barred the appellants from doing any accounting work for MHM clients, the appellants would still be free to provide accounting services to all non-MHM clients anywhere. Therefore, the scope of the restrictive covenants at issue here is reasonable under Missouri law.
Judges and Attorneys
Before Judge Raymond Gruender, Judge Bobby E. Shepherd of the Eighth Circuit Court of Appeals and Hon. John A. Jarvey, United States District Judge for the Southern District of Iowa, sitting by designation.
The trial court judge was Hon. Gary A. Fenner, United States District Judge for the Western District of Missouri.
Kay Nord Hunt, argued, Minneapolis, MN (Phillip A. Cole, Robert Kent Sellers, Michael Jat Abrams, Diane M. Odeen, Hudson, WI, on the brief), for Appellant.
John C. Aisenbrey, argued, Kansas City, MO (Patricia Konopka, Robin K. Carlson, on the brief), for Appellee.
The First District Court of Appeal held that Labor Code section 512 and IWC Wage Order No. 17 do not apply to public employees. California Correctional Peace Officer’s Association, et al. v. State of California, No. A125679, 2010 WL 3248794 (Cal. Ct. App. 1st Dist. Aug. 18, 2010). The California Correctional Peace Officers’ Association (CCPOA) filed a class action, contending that the State of California violated various Labor Code provisions, as well as wage orders promulgated by the Industrial Welfare Commission (IWC), by failing to provide correctional officers with meal periods and by failing to pay for the missed wage periods. CCPOA argued that the Legislature intended that the State provide its correctional officers with meal periods as required by Labor Code section 512 and IWC Wage Order No. 17, and that the State must pay for missed meal periods as required by Labor Code section 226.7. The court rejected this argument, holding that “the subject wage and hour statutes do not apply to public employees.” Id. *1. Continue reading
In an unusual move, plaintiffs in Arrendondo v. Delano Farms Company, No. CV F 09-1247 LJO DLB, 2010 WL 3212000 (E.D. Cal. Aug. 10, 2010), sought and were granted a temporary restraining order. Plaintiffs filed an Application pursuant to Fed. R. Civ. P. 65 requesting a Temporary Restraining Order (“TRO”) against defendant Delano Farms Company to restrain potential retaliation and threats to witnesses and putative class members by defendant. The Application was supported by declarations of three witnesses and potential class members who heard threats by a supervisor of Delano Farms as well as declarations from Jessica Arciniega and Thomas P. Lynch, attorneys representing plaintiffs, and Aida Sotelo, a paralegal who investigated the threats. Continue reading
Photo by Lee Brimelow
Kris Karkoski reports that, after being sued by the UFC for allegedly acquiring trade secrets, Bellator has filed a cross-complaint against the UFC. Bellator apparently accuses the “UFC of casting Jonathan Brookins to The Ultimate Fighter 12 while the lightweight was still under contract with Bellator.”
California Employment Lawyer 