Readers of this blog may recall our discussion of a “bad faith” attorney’s fees award made by the trial court in the Aerotek v. The Johnson Group case.   To view a copy of our previous post, click here.  As a refresher, Aerotek sued its former employee and that former employer’s new employer claiming misappropriation of trade secrets.  Aerotek lost.  The trial court awarded $735,781.27 in attorney’s fees to defendants under Cal. Civil Code section 3426.4.  That section provides attorney’s fees to a prevailing party in a Uniform Trade Secrets Action “if a claim of misappropriation is made in bad faith.”  Aerotek appealed, challenging the attorney’s fee award on the grounds that the action was neither (1) objectively specious nor brought in subjective bad faith as required for fees awarded under Cal. Civil Code section 3426.4; and (2) the lodestar multiplier used by the trial court was based on the misrepresentation by the law firm.

In a decision that contains lots of useful insights into how trial courts and courts of appeal view such “bad faith” attorney’s fees awards, the court of appeal affirmed the trial court.  The decision is unpublished.  That means that regardless of the value of the insights contained in the decision, it cannot be cited as precedent in future cases.   To read a fully copy of the decision, click on this link: Aerotek v The Johnson Group.

As readers of this blog may know, a party prevailing in a trade secret misappropriation case may be entitled to reasonable attorney’s fees if that party can show either that the claim was brought by the plaintiff in bad faith or that the defendant was guilty of willful and malicious misappropriation. The award of attorney’s fees in such cases can sometimes be significant, even exceeding the amount of damages awarded for the actual misappropriation.

In a recent decision, Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc., 2014 Cal.App. LEXIS 409, a California appellate court addressed the issue as to what local community rates would apply in awarding attorney’s fees to the prevailing party.  Altavion, was the inventor of technology that would allow for the self-authentication of digital and paper documents.  It later entered into negotiations with the defendant, a subsidiary of a parent company that, among other thing, manufactures scanners and printers.  After the negotiations failed, plaintiff learned that the defendant had patented technology that seemed to be based on the technology that plaintiff had developed and discussed with defendant during their negotiations.  Plaintiff brought a claim for, among other things, trade secret misappropriation.  Plaintiff won and was awarded $1 million in damages and $3.2 million in attorney’s fees.  The case was venued in San Mateo County, but the plaintiff’s attorneys were  from Sacramento.  In making its attorney’s fee award, the trial court awarded plaintiff its “reasonable attorney’s fees” based on hourly rates that were reasonable in the local San Mateo community – not Sacramento.  On appeal, the defendant argued that the Court should have used the “reasonable hourly rates for the Sacramento attorneys where plaintiff’s attorneys were based,” which would be somewhat lower.

The appellate court rejected this argument.  It found that “the reasonable hourly rate is that prevailing in the community for similar work” and that for purposes of this analysis, “the relevant `community’ is that where the Court is located.”  Because an award of attorney’s fees is “committed to the discretion of the trial court”, the appellate court held that the trial court did not err in awarding attorney’s fees based on the local community rate (i.e., San Mateo) as opposed to the lower Sacramento rate.

The Altavion decision is a reminder that the cost of litigating a trade secret claim can be quite high, especially when the risk of an award of attorney’s fees is factored in.  It also raises the implication that a party who hires attorneys from a big city to litigate these claims in a smaller jurisdiction may find its attorney’s fee award capped by that community’s lower local rates.

Summary of Program

Companies and their employees are now widely using social media in their daily business activities. These networking sites are used by employees to communicate with one another as well as current and potential customers. However, an employee’s use of social media may occasionally adversely impact their employer’s business or present other legal risks. What can an employer do to protect itself without intruding on an employee’s rights?

Program Highlights

  • Employer’s use of employee’s social media information versus the employee’s right to privacy.
  • Protection of employer’s Confidential and Proprietary Information.
  • Ramifications of B.Y.O.D. policies.
  • Potential employer liability for employee’s on-line conduct.
  • The importance of effective Electronic Use and Social Media policies.
  • Legal limits for employee use of social media in the workplace.

Date:      May 22, 2014

Time:    9:30 a.m. – 11:30 a.m.

Location:  Weintraub Tobin, 400 Capitol Mall, 11th Floor, Sacramento, California.

For more information and to download a copy of the flyer, please click here.

Summary of Program

The regulations regarding California’s Mandatory Sexual Harassment Prevention Training for supervisors require that certain employers provide training to their supervisors every two years.  The Labor and Employment Group at Weintraub Tobin Chediak Coleman Grodin is offering a two hour in-person training session that will comply with all the requirements outlined in the regulations, including things like:

• an overview of sexual harassment laws;

• examples of conduct that constitute sexual harassment;

• lawful supervisory responses to complaints of harassment in the workplace;

• strategies to prevent harassment in the workplace; and

• practical and inter-active hypotheticals and examples to help illustrate what sexual harassment, discrimination, and retaliation can look like.

If you are an employer with 50 or more employees, and have supervisors who have not yet been trained, this training is a must. We look forward to hearing from you and helping you comply.

Training Program

Date:  May 15, 2014

Time:  9:30 a.m. – 11:30 a.m.

Charge:  $75 per supervisor.

To register for this seminar, please email Ramona Carrillo at rcarrillo@weintraub.com.  For additional information, visit our website at www.weintraub.com and click on the News and Events tab.

The Bay Area Commuter Benefits Program (“CBP”) is a pilot program that affects any public, private, or non-profit entity for which an average of 50 or more full-time employees per week perform work for monetary compensation within the geographic boundaries of the Bay Area Air Quality Management District (“BAAQMD”).  (Seasonal/temporary employees are excluded.)

Employers that become subject to this rule at any time after the CBP goes into effect must select at least one of four commuter benefit options, notify employees of how to take advantage of the benefits, and register online with the BAAQMD’s Air Pollution Control Officer (“APCO”) or that Officer’s designee, no later than six months after becoming subject to the CBP

The four commuter benefit options are:

Pre-tax option:  Allow employees to exclude commuting costs (i.e. transit passes) from their taxable wages.

Employer-paid benefit:  Offer employees a subsidy equal to the monthly cost of commuting via public transit or vanpool, or $75, whichever is lower.  Employers may also choose to provide a subsidy for bicycle commuting costs.

Employer-provided transit:  Furnish to employees at no cost, or low costs as determined by the APCO, a vanpool, bus or similar multi-passenger vehicle operated by or for the employer.

Alternative commuter benefit:  Provide a pre-approved alternative employer-provided benefit that is as effective in reducing single occupant vehicles as Options 1-3.

An employee who performed an average of at least 2 hours of work per week within the previously calendar month within the geographic boundaries of the District, excluding a season/temporary employee is covered by the pilot program.   While covered employees are required to offer at least one commuter benefit (or an approved alternative benefit), an employee is not required to participate in the program.