At Lewis & Llewellyn we routinely advise and represent clients regarding all facets of employee mobility. California businesses commonly include employee non-solicitation provisions in their employment agreements. But several recent cases have concluded these provisions are per se invalid under California law, resulting in significant potential consequences for companies statewide. It is well-established that California law favors employment mobility and does not recognize non-compete agreements restraining employees from leaving one job to work for a competitor. This policy is codified in Business & Professions Code section 16600. Unlike non-competes, however, courts have long held that employee non-solicit provisions barring individuals or companies from poaching company talent do not violate section 16600 because the restraint on employee mobility is minimal. Until now: in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., 28 Cal. App. 5th 923 (2018), the Court of Appeal cast significant doubt on the enforceability of employee non-solicits. This analysis soon gained traction—federal courts in Barker v. Insight Glob., LLC, No. 16-CV-07186-BLF, 2019 WL 176260, at *3 (N.D. Cal. Jan. 11, 2019) and Weride Corp. v. Kun Huang, No. 5:18-CV-07233-EJD, 2019 WL 1439394, at *10 (N.D. Cal. Apr. 1, 2019), relied upon AMN Healthcare to conclude employee non-solicits were unenforceable under section 16600. While it is too early to say whether these rulings will become the majority view, companies now face significant risk that former employees can legally raid the company’s talent pool. Moreover, as with non-competes, companies can face liability for wrongful termination for firing an employee who refuses to agree to an employee non-solicit provision. Accordingly, both company and outside counsel should closely monitor these developments to determine whether these cases are the new norm or a string of outliers.
Becca Furman and Ryan Erickson will be speakers at a Bar Association of San Francisco panel on Civil Litigation of Sexual Assault Cases in the #MeTooEra, on May 2, 2019. This session will focus on how to bring a civil lawsuit on behalf of men, women, and children who have survived assault, abuse, or rape. The speakers will also focus on how to work with the District Attorney’s office during and following the criminal prosecution of the abuser, who to file a civil lawsuit against, when to file the lawsuit, and what causes of action to consider. Becca and Ryan will be joined by Deputy Attorney General Missy Kendra, and all attendees of the lunchtime panel will receive an hour of MCLE credit.
In a recent arbitration, a Lewis & Llewellyn team led by partners Nick Saenz and Paul Llewellyn defended one of the world’s largest computer manufacturers facing a multi-million-dollar damages claim for alleged fraud, trade secret misappropriation, and interference with contractual relations, among other causes of action. After successfully obtaining the dismissal of the Claimant’s interference claim, the case proceeded to a multi-day evidentiary hearing. Following the hearing, Lewis & Llewellyn secured a complete defense victory, with the arbitrator ordering the Claimant to cover a substantial portion of our client’s costs. With this most recent victory, Lewis & Llewellyn maintains its 100% success rate in arbitration.
As every litigator knows, most California settlement agreements include a waiver of Civil Code section 1542. Because, in a settlement agreement, the parties typically agree to abandon, or give up, rights or claims that otherwise could be pursued or enforced, a section 1542 waiver is needed if the settling parties wish to include both known and unknown claims in a general release. Effective January 1, 2019, the language of section 1542 has been amended as follows:
A general release does not extend to claims
which that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, which and that if known by him or her, must would have materially affected his or her settlement with the debtor or released party.
While these amendments may seem picayune, the practitioner would be well advised to be sure the new language is included in future settlement agreements, otherwise he or she risks the section 1542 waiver being ineffective.
The New Year also saw a change in the rules governing mediations. Effective January 1, 2019, all parties to California based mediations will be required to sign a written disclosure form confirming that the client understands and agrees to mediation confidentiality. The new rule, which is embodied in California Evidence Code section 1129, requires the attorney to obtain a printed acknowledgment, signed by that client, stating that he or she has read and understands the confidentiality restrictions governing mediation. There are many samples of such forms, such as the one found here. While some have criticized the new rule as fixing a non-existent problem, practitioners should ensure compliance as a matter of routine practice to avoid any issues on the day of the mediation.
Our attorneys are actively involved in the legal community, lecturing frequently on all aspects of civil litigation. Partners Ryan Erickson and Evan Burbidge recently gave presentations on “Mastering Oral Argument” and “How to Prepare for Trial” as returning faculty members at the California Superior Court Boot Camp hosted by Pincus Professional Education. Their dynamic sessions were joined by fellow-panelists Hon. Richard Ulmer (Superior Court of California, San Francisco) and Hon. James Kleinberg (Ret.) (Superior Court of California, Santa Clara County).
Becca Furman recently moderated a Bar Association of San Francisco panel on “Computer Crime Law and Civil Litigation.” This well-attended CLE included an in-depth discussion of the Computer Fraud and Abuse Act, along with its California corollary, Computer Data Access and Fraud Act, Cal. Pen. Code, § 502. The panel included speakers with experience bringing and defending these claims, as well as a lawyer from the Electronic Frontier Foundation.
Becca, along with other in-house and outside counsel, is also speaking at Hastings on March 28 to law students about her experience as a lawyer in San Francisco. If you or any lawyers or law students would like to attend, please let Becca know and sign up in the above link.
When a case settles, most settlement agreements include a confidentiality provision for key terms. Attorneys often believe they are bound by such terms either when they approve the settlement as to form or even when the agreement has broad language regarding its application to the client’s attorneys.
However, a recent ruling by the California Court of Appeal threw that assumption into doubt. In Monster Energy Company v. Schechter, the parents of a 14-year old girl sued Monster Energy after she consumed two Monster brand energy drinks, went into cardiac arrest and died. Thereafter, the parents’ attorney negotiated a settlement agreement which included a confidentiality provision purporting to bind him and his firm. The attorney subsequently gave an interview in which he said the case had settled for “substantial dollars for the family.” Monster Energy then sued the attorney and his firm alleging that they had breached the settlement agreement’s confidentiality provision.
The attorney and his firm then filed a special motion to strike under section 425.16 of the California Code of Civil Procedure (an anti-SLAPP motion) arguing that Monster Energy could not show a probability of prevailing on its breach of contract claim because the attorney and his firm were not parties to the settlement agreement. The trial court denied the motion and an appeal followed.
The Court of Appeal held that “when a settlement agreement provides that the ‘[p]laintiffs and their counsel agree’ to keep the terms of the agreement confidential, and when the plaintiffs’ counsel signs the agreement under the words, ‘Approved as to form and content,” the plaintiffs’ counsel could not be liable to the defendant for breach of the confidentiality provision. The Court noted: “The only reasonable construction of this wording is that they were signing solely in the capacity of attorneys who had reviewed the settlement agreement and had given their clients their professional approval to sign it. In our experience, this is the wording that the legal community customarily uses for this purpose.”
Because confidentiality is often a key term of a settlement agreement, attorneys would be well-advised to keep this recent opinion in mind when drafting settlement agreements. As the Court noted, one way to avoid this issue, and bind attorneys to a confidentiality provision, is “to draft a settlement agreement that explicitly makes the attorneys parties to the agreement (even if only to the confidentiality provision) and explicitly requires them to sign as such.”
Benchmark Litigation, the definitive guide to America’s leading litigation firms and attorneys, recently published its 2019 edition. Lewis & Llewellyn received top billings across the board. Benchmark selected us as one of the few “recommended” law firms in California, and one of just a handful of litigation boutiques selected. Additionally, Benchmark ranked Marc Lewis as one of only 24 “Noted Stars” in California for his Labor & Employment practice. Similarly, Benchmark named Paul Llewellyn a “San Francisco Litigation Star” for his general commercial litigation practice.
After interviewing our clients, Benchmark summarized our practice in a nutshell: “The firm is responsive, efficient, and skilled. The attorneys at Lewis & Llewellyn are of the highest quality, and their work product is unsurpassed by larger firms. In fact, their responsiveness and client service orientation far surpass that of larger firms, and their fee structure and case staffing result in better representation at a lower cost than that available from larger firms.”
At Lewis & Llewellyn, we understand what is required to prevail against a powerful and well-funded institution or corporation. As a firm, we have also chosen to put our litigation expertise toward a cause that we feel passionately about: the epidemic of sexual abuse and assault. Through our agile and aggressive litigation tactics, we have recovered millions of dollars on behalf of our sexual abuse clients and, in the process, driven changes at institutions and corporations throughout the country that will help protect others from sexual abuse. As part of those efforts, we recently obtained a settlement of $2.75 million in connection with an alleged sexual assault. Lewis & Llewellyn will continue to advocate vigorously on behalf of survivors of sexual abuse.
On May 23, 2018, the Supreme Court issued a new California Rule of Court which requires most active California attorneys to be re-fingerprinted. This requirement is part of an effort by the State Bar to come into full compliance with statutory mandates that require the Bar to receive notifications of attorney arrests and convictions from the California Department of Justice. The new rule came into effect on June 1, 2018, but attorneys have until April 30, 2019 to come into compliance. For anyone who has yet to do so, you can find the necessary information here. Don’t wait until the last minute, as LiveScan locations can become crowded and fingerprints aren’t always accepted the first time. Failure to comply with these new requirements can result in monetary penalties, and if new prints haven’t been taken by the final deadline of December 1, 2019, you may face a suspension of your license.
Any working parent knows the struggle of balancing family time and work responsibilities. In an article reflecting on what this balance means for lawyers, Law360 featured the story of Lewis & Llewellyn partner and father-of-three, Ryan Erickson. At Lewis & Llewellyn, we recognize the importance of both work and family, and we are committed to supporting our attorneys in their effort to be great parents while still providing the highest possible quality of work to our clients.