Gov. Brown signed AB 1875 on September 17, 2012. The new law essentially brings California civil procedure in line with federal civil procedure and, absent an exception or some other relief by the court, limits depositions to seven (7) hours in length.
“Inside Sales Exemption” – Are Commissions Calculated When Earned or When Paid?
By Ramona Carrillo on
Posted in Wage & Hour
The Ninth Circuit has referred the Peabody v. Time Warner Cable case to the California Supreme Court to answer this question.
Under the commissioned salesperson exemption, or the “inside sales exemption” in Wage Orders 4 and 7 (ONLY) an employee is exempt from overtime if his or her earnings: 1) exceed one and one-half times the minimum wage; and 2) more than half of the employee’s compensation represents commissions. Under California’s minimum hourly wage of $8.00, an inside sales commissioned employee must earn at least $12.00 per hour to qualify for the exemption.
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Is Leave Required As An Accommodation If It Is Unclear If The Employee Will Be Able To Perform The Job In The Near Future?
Robert v. Board of County Commissioners of Brown County, Kansas, et. al. (10th Cir. Aug. 29, 2012) No. 11-3902
The job description for Robert’s job as a supervisor of felony offenders included 18 “essential functions.” Some of those included functions like performing drug screenings, ensuring compliance with court orders, testifying in court, and “field work,” which consisted of visiting the homes of individuals who had been released from prison to assist them in their reentry into society. The job required “considerable fieldwork . . . throughout the 22nd Judicial District," "visits in less than desirable environments," and "potentially dangerous situations in field/office contacts."
Another Door Closes on Non-Compete Agreements
By: James Kachmar
Readers of this blog will note that we frequently remind them that California law generally prohibits non-compete agreements. There are very limited exceptions to this general rule, one being that the seller of goodwill in a business can be bound by a valid non-compete agreement to protect the goodwill that is being purchased. Sometimes, the buyer of a company will want to continue to employ certain key employees, who can also be the sellers of the goodwill of the former company. We have seen instances where the purchasing company gets creative and subjects the seller/key employee to two covenants not to compete, one in the purchase agreement and the other in an employment agreement. Last week, a California appellate court shut the door on this approach in the case Fillpoint, LLC v. Maas.
Continue Reading Another Door Closes on Non-Compete Agreements
Pleading Around CUTSA Preemption
By James Kachmar on
Posted in Trade Secrets and Competition
Readers of this blog will note our frequent reminders that preemption under California’s Uniform Trade Secret Act (“CUTSA”) can threaten other common law claims if not properly pled. A recent decision out of the Eastern District of California in Hat World, Inc. v. Kelly, 2012 U.S. Dist. Lexis 113060 (Aug. 10, 2012) reinforces this position.
In Hat World, the plaintiff-company sued a former employee claiming that he misappropriated trade secret information when he left his employment to join a competitor, including customer lists, purchase orders, invoices and spreadsheets. In addition to a claim under CUTSA, plaintiff sued its former employee for common law trade secret misappropriation, unfair competition, conversion, intentional interference with contractual relations and prospective economic relations, breach of contract and violation of the computer Fraud and Abuse Act. The defendant filed a motion to dismiss many of plaintiff’s claims on the grounds of CUTSA preemption.
Preemption under CUTSA arises because the Legislature enacted a “comprehensive structure” with regard to trade secret misappropriation that was intended to “occupy the field” with respect to common law trade secret misappropriation claims. CUTSA is intended to provide the sole civil remedy for trade secret misappropriation under California law and thus preemption applies “to all common law claims that are `based on the same nucleus of facts as the misappropriation of trade secret claim.’” (Citing K.C. Multimedia, Inc. v. Bank of America Tech. & Operations, Inc., (2009) 171 Cal.App.4th 939.) There are three exceptions to CUTSA preemption: (1) claims based on contractual remedies; (2) other civil remedies not based on trade secret misappropriation; and (3) criminal remedies.
In bringing his motion to dismiss, the former employee argued that plaintiff’s claims for common law trade secret misappropriation, interference with contractual relations and prospective economic relations and conversion were all based on the “same nucleus of facts” underlying the CUTSA trade secret misappropriation claim. Plaintiff sought to avoid preemption of these claims by stating that in addition to containing allegations regarding trade secrets, they also alleged other wrongful conduct such as the “unlawful solicitation of Hat World customers and employees” and “unlawful conversion of purchase orders for Hat World products.”
Nevertheless, the Court agreed with the defendant employee and found that because it appeared that all of these claims seemed to be based in some part on the misappropriation of trade secrets, they were preempted under CUTSA and had to be dismissed. However, the Court ruled that because it was possible that some of the claims could be alleged based on facts different from those underlying trade secret misappropriation, the Court granted plaintiff an opportunity to amend the complaint to avoid preemption.
The Hat World ruling reminds attorneys that they need to be careful in drafting complaints asserting trade secret misappropriation and other common law claims to avoid preemption. Attorneys should include language making clear that the common law claims have a factual basis separate from that underlying a CUTSA claim. Otherwise, that attorney’s client faces the prospect of having its claims dismissed because of preemption and/or incurring additional fees in having to amend the complaint.