Tag Archives: Cause of action

Employees Entitled to 2 Hours Per Day for Meal & Rest Break Violations

Meal break in the bush
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Judge George H. King of the Central District denied plaintiff’s remand motion in Lara v. Trimac Transportation Services (Western) Inc., No. CV 10-4280-GHK (JCx), 2010 WL 3119366 (C.D. Cal. Aug. 6, 2010).

Plaintiff Miguel Lara’s (“Plaintiff”) brought a motion to remand on the grounds that Defendant Trimac Transportation Services (Western) Inc. (“Defendant”) failed to satisfy the amount in controversy requirement for diversity jurisdiction.  The court stated the amount in controversy requirement as follows: Continue reading

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Eastern District of California Rejects UTSA Preemption of Contractual Nondisclosure Claim

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Since the opinion in  Court of Appeal decision in K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc., 171 Cal. App. 4th 939, 954 (2009), defendants have successfully demurred to common law-based causes of action, arguing that the UTSA preempts them.  In this next case, Removable Media Solutions v. AAR Mobility Systems, 2010 WL 3034219 (E.D. Cal. July 28, 2010) (slip op.), defense counsel takes it one step further, arguing that the statute preempts a contract claim.  This is despite the language of the statute that expressly excludes preemption of “contractual remedies, whether or not based upon misappropriation of a trade secret“.

Plaintiff Removable Media Solutions, Inc. (“RMSI”) previously sought to sell a telecommunications device to the California National Guard. RMSI sought the assistance of defendant AAR Manufacturing, Inc., (“AAR”) in this endeavor. The California National Guard eventually elected to retain the services of AAR but not RMSI in producing the device, and AAR subsequently sold similar devices to other states.

RMSI’s claims alleged that AAR breached a non-disclosure agreement. AAR sought summary judgment on both.  The court denied the motion as to the non-disclosure agreement.

AAR’s sole argument for summary judgment on this claim was that it was preempted by the Uniform Trade Secrets Act, as by California, and in particular by Cal. Civ. Code § 3426.7. In pertinent part, this statute provides that:

(a) Except as otherwise expressly provided, this title does not supersede any statute relating to misappropriation of a trade secret, or any statute otherwise regulating trade secrets.

(b) This title does not affect

(1) contractual remedies, whether or not based upon misappropriation of a trade secret,

(2) other civil remedies that are not based upon misappropriation of a trade secret, or

(3) criminal remedies, whether or not based upon misappropriation of a trade secret.

“Undaunted by the statute’s explicit statement that it does not affect contractual remedies, AAR argues that the statute preempts for breach of the non-disclosure agreement. This assault on the plain language of the statute fails.”

The Court wrote:

Courts have held that except for the three exemptions noted in subsection (b), the statute implicitly “preempts common law claims that are based on misappropriation of a trade secret.” Ali v. Fasteners for Retail, Inc., 544 F.Supp.2d 1064, 1070 (E.D.Cal.2008) (internal quotation marks omitted); see also K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc., 171 Cal.App. 4th 939, 954 (2009), Accuimage Diagnostics Corp. v. Terarecon, Inc., 260 F.Supp.2d 941, 954 (N.D.Cal.2003) (holding that this interpretation was implied by Cadence Design Systems, Inc. v. Avant! Corp., 29 Cal.4th 215, 224 (2002)).

AAR’s argument that this implicit preemption extends to contract claims invokes a gross misreading of the caselaw. AAR quotes the statement from Digital Envoy, Inc. v. Google, Inc., 370 F.Supp.2d 1025 (N.D.Cal.2005) that “all state law claims based on the same nucleus of facts as the trade secrets claim are preempted under California’s UTSA.” Id. at 1034.FN4 AAR argues that notwithstanding the statute’s explicit saving of contract claims, courts have stated that “common law claims” arising out of the same operative facts as a trade secret claims are preempted, and that contract claims are common law claims, so contract claims must be preempted.

To the extent that Digital Envoy held that “all claims” are preempted, it plainly referred to “all claims” argued to be preempted in that case, i.e., claims for unfair competition and unjust enrichment. Id. at 1035 (“California’s statute. preempts Digital’s claims for unfair competition and unjust enrichment.”). Digital Envoy and other cases have explicitly recognized that § 3426.7 does not preempt contract claims. Id. (§ 3426.7 “explicitly states that claims based upon breach of contract … are not preempted by the statute.”); see also First Advantage Background Servs. Corp. v. Private Eyes, Inc., 569 F.Supp.2d 929, 936 (N.D.Cal.2008), HiRel Connectors, Inc. v. United States, No. CV 01-11069, 2006 U.S. Dist. LEXIS 93332 (C.D.Cal. July 18, 2006) (“Plaintiff’s claim for breach of contract is not preempted by California’s Uniform Trade Secrets Act.”). While few California courts have spoken to the scope of this statute, at least one state court has allowed a claim for breach of a non-disclosure agreement to proceed in parallel with a claim for misappropriation of trade secrets. Glue-Fold, Inc. v. Slautterback Corp., 82 Cal.App. 4th 1018, 1021 (2000). Although Glue-Fold did not discuss possible preemption of the contract claim, this may well be because the issue was so clear as to require no discussion.

Although this conclusion should be obvious, the court has exhaustively searched cases citing § 3426.7, finding no cases providing even implicit support for AAR’s theory. AAR’s motion is therefore denied as to this claim.

Id. **4-5.

Senior District Judge Lawrence K. Karlton wrote the opinion.

By CHARLES H. JUNG

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Northern District Denies Certification of Joe’s Crab Shack Meal and Rest Break Class Action

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The Northern District of California denied class certification of a meal and rest break class action in Washington v. Joe’s Crab Shack, No. C 08-5551 PJH, 2010 WL 5396041 (N.D. Cal Dec. 23, 2010.) (slip op.).  Plaintiff Drew Garrett Washington asserted that defendant Crab Addison, Inc. (“Crab Addison”), a company that operates a number of Joe’s Crab Shack restaurants, failed to provide employees with meal and rest breaks, allowed its restaurant managers to manipulate employee time records to deprive employees of pay for all hours worked (including overtime and missed meal break pay), required employees to perform work “off the clock”; and required employees to pay for their own employer-mandated uniforms.  Id. *1.

Class Definition

Plaintiff moved pursuant to Federal Rule of Civil Procedure 23, to certify a plaintiff class consisting of “all non-exempt restaurant employees employed by Crab Addison at Joe’s Crab Shack restaurants in California from January 1, 2007, through the present.”

Discussion

The court denied the certification motion.  Id. *11.  “Plaintiff’s position is that common questions predominate because the main issue is whether—notwithstanding Crab Addison’s written policies—Joe’s Crab Shack restaurants in California followed a common unwritten policy of denying meal and rest breaks, failing to pay employees who did not take breaks, failing to pay for overtime, requiring employees to purchase their own uniforms, and so forth.” Id. Plaintiff contended that the existence of a policy or practice that in effect contradicts Crab Addison’s written policies can be ascertained by an analysis of the data in Crab Addison’s computer systems.  Id. “But since plaintiff has failed to adequately explain how that analysis works and exactly what the data shows, he has failed to adequately establish the existence of such a policy or practice.” Id. Continue reading

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