Motion to Strike in Controller's Group, Inc. vs Daniel Kitchen et al| Trellis.Law

On November 20, 2018 a Motion-Secondary was filed involving a dispute between Controller'S Group, Inc., and Daniel Kitchen, Kitchen Recruiting Group, Kitchen Recruiting Group, Llc, for Breach of Contract/Warranty Unlimited(06) in the District Court of Santa Clara County.

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Ernest M. Malaspina (State Bar No. 187946)
Jennifer S. Coleman (State Bar No. 213210)
Christopher A. Hohn (State Bar No. 271759)
HOPKINS & CARLEY
A Law Corporation
The Letitia Building

P.O. Box 1469

Telephone: (408) 286-9800
Facsimile: (408) 998-4790

Attorneys for Plaintiff
CONTROLLER’S GROUP, INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA
CONTROLLER’S GROUP, INC., a CASE NO. 18CV338235
California corporation,
PLAINTIFF CONTROLLER’S GROUP,
Plaintiff, INC.’S OPPOSITION TO DEFENDANT’S

Date: March 12, 2019
DANIEL KITCHEN, an individual; Time: 9:00 a.m.
KITCHEN RECRUITING GROUP, a Dept: 8
business entity; KITCHEN RECRUITING Judge: Hon. Sunil R. Kulkarni
GROUP, LLC, a limited liability company,
and DOES 1 through 10, inclusive, Action Filed: November 20, 2018
Trial Date: None

OPKINS ARLEY
TTORNEYS
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
ANOSE ALO

692\3211184.6
TABLE OF CONTENTS

I. INTRODUCTION ............................................... 4
II. FACTUAL BACKGROUND ............................................................................................. 5
A. The Parties and the Factual Allegations in the Complaint ...................................... 5
B. CGI’s Causes of Action .......................................................................................... 6
III. LEGAL ARGUMENT ........................................................................................................ 7
A. The Court Should Deny Kitchen’s Motion Because Kitchen has F
omplaint Should be Stricken .......................... 7
B. Bus. & Prof. Code, § 16600 Does Not Justify Striking the Confidentiality
Agreement ............................................................................................................... 8
1. Section 16600 Does Not Invalidate the Provisions of the
Confidentiality Agreement ...................... 8
2. The Court Should Not Strike the Entire Confidentiality Agreement
Based on Provisions that CGI has Not Asserted in this Case ..................... 9
C. The Complaint’s Allegations Justify CGI’s Recovery of Exempl
Damages and Attorneys’ Fees Regardless of Whether the Confidentiality
Agreement Includes the Notice Described in Section 1833(b)(3) of the
DTSA .................................................................................................................... 11
D. Labor Code, § 1102.5(a) Does Not Justify Striking the Confidentiality
Agreement, and Mr. Kitchen Has Failed to Provide Any Authority to the
.......................................................... 12
E. Bus. & Prof. Code, § 17200 Does Not Justify Striking the Entire
Confidentiality Agreement .................................................................................... 14
IV. CONCLUSION ................................................ .. 15

OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
TABLE OF AUTHORITIES

Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176 ............................................................... 14
AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc. (2018) 28 Cal.App.5th 923, 928-30 .......... 10
Armendariz v. Foundation Health (2000) 24 Cal.4th 83 ....................... 10
Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163 .. 15
(1998) 67 Cal.App.4th 1253 ............................................ 7
(2008) 44 Cal.4th 937 ....................................................... 10, 13
(2006) 142 Cal.App.4th 603 .................................................... 13
(1987) 196 Cal.App.3d 34 .............................................................. 8
(1992) 1 Cal.4th 1083 .................................................................................... 13
Garcia v. Rockwell Int'l Corp. (1986) 187 Cal.App.3d 1556 ........................................................ 13
In re JDS Uniphase Corp. Securities Litigation (N.D. Cal. 2002) 238 F.Supp.2d 1127 ............... 13
(1987) 194 Cal.App.3d 1049........................................ 8
(C.D. Cal. 1999) 82 F.Supp.2d 1089 ................................... 8
(1985) 174 Cal.App.3d 268 .......................................................................... 8
(2008) 160 Cal.App.4th 1255 ......................................................................... 8
Puentes v. Wells Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th 638 ................................. 1
Schaefer v. Berinstein, 140 Cal.App.2d 278 (1956) ........................................................................ 7

18 U.S.C. Section 1833(b)(1).................................. ........ 11
18 U.S.C. Section 1833(b)(3).................................. .... 8, 11
18 U.S.C. Section 1833(b)(3).................................. ........ 11
Business & Professions Code Section 16600 .................................................................................. 8
Business and Professions Code Section 17200 .............................................................................. 14
Civil Code Sections 1598-99 ......................................................................................................... 10
Code of Civil Procedure Section 436 ........................... ..... 7
Code of Civil Procedure Section 436(a) ........................ ... 7
Code of Civil Procedure Section 437(a) ........................ ... 7
Labor Code section 1102.5 ..................................... ........ 13
Labor Code section 1102.5(a) .................................. . 12, 13
Labor Code section 1102.5(b) .................................. ....... 13
Penal Code section 502 ........................................ ........... 12

OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANTS’ MOTION TO ST
Plaintiff Controller’s Group, Inc. (“CGI”) respectfully submits

Motion to Strike (“Motion to Strike” or “Motion”).

Through its Complaint, CGI brought suit against Mr. Kitchen, a former CGI employee, for

taking and using confidential CGI information to benefit his competing business. Mr. Kitchen,

, now demands without any valid legal basis that the Court strike

from the Complaint: (a) his Confidentiality and Non-Disclosure Agreement with CGI, attached to

the Complaint as Exhibit A (“Confidentiality Agreement” or “Agreement”); and (b) CGI’s claims

for exemplary damages and atto the Court must deny Mr.

Kitchen’s baseless Motion in its entirety.

ments, Bus. & Prof. Code sectio

void the provisions in the Confidentiality Agreement that CGI h

things, prohibit the use or disclosure of CGI’s confidential information. The Court has repeatedly

nvalidate these types of agreements. Mr. Kitchen has failed to

provide any supporting authority for his claim that the Court should strike the entire

Confidentiality Agreement because its other provisions—which are not at issue here—are

purportedly invalid under section 16600. The plain language of

Mr. Kitchen cites, and the Confidentiality Agreement’s severability clause all make clear that

ered void, while the remainder of

the Agreement remains intact tify striking the Confidentiality

Agreement.

, whether the Confidentiality Agreement includes the employee i

described in the Defend Trade Secrets Act, 18 U.S.C., § 1836

this case and has no impact on CGI’s right to recover exemplary damages and attorneys’ fees.

While the lack of this notice may prevent a plaintiff from seeking exemplary damages and

While Kitchen Recruiting Group and Kitchen Recruiting Group, LLC were served through Daniel Kitchen with the
Summons and Complaint, among other things, to date neither of these entities have filed a responsive pleading to the
Complaint.
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
attorneys’ fees through a DTSA cause of action for trade secret misappropriation, it does not

affect the plaintiff’s ability to seek this relief

secret misappropriation claim under the DTSA. Rather, its other causes of action justify its

prayer for exemplary damages a there is no basis for striking

CGI’s prayer for this relief.

voiding the entire Confidentiality Agreement based on its omission of a DTSA employee

immunity notice, as Mr. Kitchen incorrectly claims. The consequences of omitting this notice are

well-defined in the DTSA, and Mr. Kitchen has failed to provide any authority even suggesting

that Labor Code section 1102.5(a) or Bus. & Prof. Code section 17200 should magnify these

Agreement. The only reasonable approach, to which Mr. Kitchen

agreed through the Confidentiality Agreement’s severability clause, is to interpret the Agreement

so as not to prohibit the lawful reporting of legal violations.

Mr. Kitchen has not alleged that CGI has attempted to prevent him or anyone else from reporting

For all of these reasons, and t tfully requests that the

FACTUAL BACKGROUND

CGI filed its Complaint against Defendants Daniel Kitchen, Kitc

and Kitchen Recruiting Group, LLC on November 20, 2018. As alleged in the Complaint, CGI

is a staffing agency specializing in accounting and finance professionals. (Complaint, ¶ 6.) Mr.

ct Hire Recruiter. (Complaint, ¶ 7.) As a condition of his

employment, Mr. Kitchen signed the Confidentiality Agreement, a

the Complaint as Exhibit A, on March 26, 2018. (Complaint, ¶ 9

employment, third party Nova Measuring Instruments, Inc. (“Nova”) became a client of CGI,

As used herein, Kitchen Recruiting Group and Kitchen Recruiting Group, LLC shall collectively be referred to as
“Kitchen Recruiting.”
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
entering into an agreement with CGI regarding a Vice President

was hoping to fill (“VP Opening”). (Complaint, ¶¶ 15-16.) CGI assigned the VP Opening to Mr.

Kitchen, who met with Nova regarding the details of the placement and became CGI’s point of

position at Nova using CGI’s confidential candidate database. Eventually, Mr. Kitchen identified

abase and began discussing the

Nova VP Opening with Mr. Talbert, all while Mr. Kitchen was still employed at CGI.

(Complaint, ¶¶ 17-19.)

Mr. Kitchen abruptly resigned from CGI on June 25, 2018 to work

Mr. Kitchen apparently formed

(Complaint, ¶¶ 20-22.) CGI and K ompetitors. (Complaint, ¶ 21.)

een days’ notice of his intent to leave CGI to work for a

competitor, as required by paragraph nine of the Confidentiality Agreement, in order to facilitate

I’s confidential information.

(Complaint, ¶ 23; Confidentiality Agreement, ¶ 9.)

information from a CGI-licensed database, without CGI’s authori

of himself and Kitchen Recruiting. (Complaint, ¶¶ 29-32.) Unbeknownst to CGI, Mr. Kitchen

also continued working with Nova and Mr. Talbert on behalf of himself and Kitchen Recruiting—

der the Confidentiality

Agreement—to fill the VP Opening that CGI had assigned to him. (Complaint, ¶ 24.) Mr.

Kitchen now claims that he is entitled to a $56,000 commission from Nova for placing Mr.

Talbert in the Vice President of Finance role at Nova, even though CGI assigned the VP Opening

to him and he began work on placing Mr. Talbert in that role while still employed at CGI using

CGI’s confidential information. (Complaint, ¶ 27.)

Based on the misconduct described above, CGI has asserted a cau

of contract, alleging that Mr. Kitchen breached the Confidentiality Agreement. These breaches
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
I’s confidential information after leaving CGI’s employ (

Confidentiality Agreement, ¶¶ 1(b), 1(c), 3, 7); ii) failing to return all of CGI’s

Confidentiality Agreement, ¶ 5); and iii) failing to inform

CGI of his intent to leave CGI to t least fifteen days before doing so

Confidentiality Agreement, ¶ 9). (Complaint, ¶¶ 11, 35-40.)

action against Kitchen Recruiting for: i)

violation of Penal Code section 502; ii) intentional interference with contractual relations; iii)

intentional interference with prospective business advantage; iv) unfair competition pursuant to

et seq uctive trust. (Complaint, ¶¶

Among other relief, CGI seeks exemplary and punitive damages pursuant to its claims for

violation of Penal Code section 502, intentional interference with contractual relations, and

intentional interference with prospective business advantage. (Complaint, p. 11, lines 17, 28, p.

12, line 11.) CGI also seeks attorneys’ fees under its breach of contract and Penal Code section

502 causes of action. (Complaint, p. 11, lines 7, 16.)

LEGAL ARGUMENT

ed to
Show That Any Portion of CGI’s

Code of Civil Procedure section 436 provides that the Court may

false, or improper matter inserted in any pleading;” and (b) “a

drawn or filed in conformity with urt rule, or an order of the court.”

The challenged pleading itself, or a matter of which the Court is required to take judicial notice,

must reveal the grounds for a motion to strike. (See Code Civ. Proc., § 437(a).) “In passing upon

the sufficiency of a pleading, its allegations must be liberally construed with a view to substantial

Schaefer v. Berinstein

t to a motion to strike as a whole, all

parts in their context, and assume their truth.” ( (1998) 67

OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
Mr. Kitchen has failed to show that any portion of CGI’s Complaint is either “irrelevant,

false, or improper,” or that it does not conform to the applica

arguments, Bus. & Prof. Code section 16600 does not void the entire Confidentiality Agreement,

and CGI’s claims for exemplary damages and attorneys’ fees are warranted regardless of whether

the Agreement includes the notice discussed in the DTSA at section 1833(b)(3). The Court

should therefore dismiss the Motion in its entirety.

Bus. & Prof. Code, § 16600 Does Not Justify Striking the Confidentiality

Section 16600 Does Not Invalidate the Provisions of the Confidentiality
Agreement that CGI has Asserted
Contrary to Mr. Kitchen’s arguments, Section 16600 of the California Business and

Professions Code does not invalidat identiality Agreement prohibiting

Mr. Kitchen from using or disclosing CGI’s confidential and proprietary information for his own

held that employee confidentiality agreements are valid,

notwithstanding section 16600. (See, e.g.,

[“Section 16600 does not invalidate an employee’s agreement not to disclose his former

employer’s confidential customer lists or other trade secrets or not to solicit those customers.”];

(1987) 194 Cal.App.3d 1049, 1054 [“Case law

provides that the terms of [section 16600] do not invalidate an employee’s agreement not to

disclose his former employer’s confidential customer lists or other trade secrets or not to solicit

those customers.”] [internal quotations omitted];

Cal.App.3d 34, 44 [“agreements designed to protect an employer’s proprietary information do not

1089, 1096 [“Employment restrictions that serve to protect a former employer’s trade secrets,

proprietary information, and confidential information are valid

authorize employees to compete with former employers by stealing their confidential customer

information.”].) Mr. Kitchen provides no authority to the cont

attempted to show how any of the contractual provisions that CG
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
him restrain him from engaging in a lawful profession.

CGI’s Complaint alleges only that Mr. Kitchen has breached the

Confidentiality Agreement intended to protect CGI’s confidentia

alleges that Mr. Kitchen breached the requirements that he: (1) refrain from using any of CGI’s

confidential information for any purpose other than to fulfill his duties at CGI; (2) preserve the

confidentiality of any confidential information or trade secrets received by CGI from any third

parties in the course of performing his duties for CGI; (3) return all materials related to CGI’s

business upon the termination of his employment; and (4) inform CGI fifteen days before leaving

CGI’s employment to engage in competition with CGI in order to

CGI’s confidential information. (Complaint, ¶¶ 11, 38; Confidentiality Agreement, ¶¶ 1(b), 1(c),

3, 5, 7, 9.) As demonstrated by the authority described above,

provisions and as such, Mr. Kitchen’s Motion must fail.

Entire Confidentiality Agreemen
Based on Provisions that CGI has Not Asserted in this Case

that the Court should

strike the Confidentiality Agreement because other provisions—which CGI has not

asserted against him in the case—are allegedly unenforceable un

assuming that paragraphs 10, Agreement were void under

section 16600—which CGI does not concede—invalidating the entire Confidentiality Agreement

on the basis of these provisions contradicts the plain language

se provided in this chapter, ev

restrained from engaging in a lawful profession, trade, or business of any kind is to that extent

makes clear that only the provisions that violate section 16600

ainder of the Agreement. Adoptin

would improperly read out of existence the “to that extent” language.

Notably, the cases that Mr. Kitchen cites in his Motion do not justify striking the entire

Confidentiality Agreement based on the unasserted provisions that Mr. Kitchen claims are

unenforceable under section 16600. (See Edwards v. Arthur Andersen LLC
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
937, 942, 948 [invalidating a noncompetition agreement—not a confidentiality agreement—that

prohibited employees from solici ents for period of time after

leaving company’s employ].) To the contrary, AMN Healthcare supports leaving the asserted

confidentiality provisions in the Confidentiality Agreement intact. In that case, after concluding

that a contractual provision prohibiting a former employee from soliciting company employees

was invalid. The Court

did not disturb the remainder sclosure agreement, which included

requirements that former employee’s not disclose the company’s confidential information. (

Healthcare, Inc. v. Aya Healthcare Servs., Inc. (2018) 28 Cal.App.5th 923, 928-30, 939.)

The severability provision in the Confidentiality Agreement further shows that the Court

should not void the Agreement in its entirety based on paragraphs 10-12, which CGI has not

erability provisions must be

enforced, when it was the parties’ intent that the contract be severable. (See Civil Code, §§

(2000) 24 Cal.4th 83, 122-24

(explaining that severing unenforceable terms rather than voiding the entire contract “prevent[s]

parties from gaining undeserved detriment as a result of voiding

the entire agreement—particularly when there has been full or partial performance of the

contract” and that the doctrine of severance “attempts to conse

do so would not be condoning an illegal scheme.”].) “The overa

thered’ by severance.” (Id. at 124 [internal citations omitted].)

Confidentiality Agreement is held “invalid, unenforceable, or void,” the remainder of the

Agreement “shall remain in full ality Agreement, Exh. A, ¶ 13(b).)

In this case, CGI relied on the identiality Agreement in hiring Mr.

Kitchen and providing him access to CGI’s confidential informat

interests of justice, and would impose an underserved detriment

provision and void the Agreement in its entirety,

For all of these reasons, CGI has asserted valid confidentialit
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
iality Agreement were invalid,

ection 16600 does not justify striking the entire Agreement, as Mr.

Kitchen now demands.

The Complaint’s Allegations Justify CGI’s Recovery of Exemplary Damages
and Attorneys’ Fees Regardless of Whether the Confidentiality A
Includes the Notice Described in Section 1833(b)(3) of the DTSA
Contrary to Mr. Kitchen’s claims e DTSA’s employee

immunity notice in the Confidentiality Agreement has no bearing

exemplary damages and attorneys’ tates that individuals are not

liable under Federal or State trade secret law for the disclosure of a trade secret that is either: (A)

made in confidence to a Government office or an attorney solely

investigating a suspected violation of law; or (B) is made in a document filed in a lawsuit or other

proceeding, if such filing is made under seal. (18 U.S.C., § 1833(b)(1).) The DTSA—which was

enacted less than three years ago—now requires that employers include a notice regarding this

immunity in agreements concerning trade secrets or other confidential information. (18 U.S.C., §

1833(b)(3).) However, if the employer does not include the not

is that the employer may not recover exemplary damages and att

through a DTSA cause of action for willful trade secret misappropriation against an employee

without notice:

(C) Non-compliance.
If an employer does not comply with the notice requirement in
subparagraph (A), the employer may not be awarded exemplary
damages or attorney fees under subparagraph (C) or (D) of section
[providing for these damages for a claim of willful trade
secret misappropriation under the DTSA] in an action against an
employee to whom notice was not provided.

18 U.S.C., §1833(b)(3)(C) (emphasis added).

Nothing in the DTSA indicates that section 1833, or any other section, limits a plaintiff’s

right to recover exemplary damage

secret misappropriation under the DTSA. To the contrary, 18 U.

does just the opposite, stating that:
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
§ 1833], nothing in this subsection shall be construed to autho
or limit liability for, an action that is otherwise prohibited
such as the unlawful access of material by unauthorized means.

Similarly, section 1838 makes clear that the DTSA does not preempt other causes of

action, stating that:

(b), this chapter shall not b
construed to preempt or displace any other remedies, whether ci
or criminal, provided by United States Federal, State,
commonwealth, possession, or territory law for the
misappropriation of a trade secret…
In this case, CGI has not asserted a cause of action for trade secret misappropriation under

Complaint.) Rather, CGI bases its claims for punitive and exemplary

damages on its Second, Third, and Fourth Causes of Action for violation of Penal Code, § 502,

intentional interference with contractual relations, and intentional interference with prospective

economic advantage, respectively. (Complaint, p. 11, line 17, line 28, p. 12, line 11;

Complaint, ¶¶44, 52, 60 (alleging that, in engaging in this tor

with malice, oppression, and fra of the rights of CGI).) Similarly,

CGI bases its claim for attorney

Confidentiality Agreement and on its Second Cause of Action for
(Complaint, p. 11, line 7, line 16.) Thus, 18 U.S.C. section 1833(b)(3)(C) does not impact CGI’s

ability to recover exemplary dama the facts alleged in the

Complaint, regardless of whether the Confidentiality Agreement includes the employee notice

described in section 1833(b)(3). As such, the Court must deny Kitchen’s Motion to Strike for

these reasons as well.

iality
Agreement, and Mr. Kitchen Has Failed to Provide Any Authority to the

Mr. Kitchen has argued—incorrectly—that the omission of the DTS

notice from the Confidentiality Agreement constitutes a violati

d strike the Agreement in its

supporting authority for the notion that violating Labor Code
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
identiality Agreement, or any part of it.

Section 1102.5 exists to protect whistle-blowers from retaliati

to the employer, or externally, to a

government or law enforcement agency. (See Labor Code, § 1102. Garcia v. Rockwell

Int'l Corp. 1102.5] merely

enunciated already existing public policy” that ”forbids retaliatory action taken by an employer

against an employee who discloses information regarding an employer's violation of law to a

government agency.”] [abrogated on other grounds in Gantt v. Sentry Ins.

suggests that a confidentiality agreement’s omission of an

legal violations to government or law enforcement officials

invalidates the agreement as a whole. Moreover, nothing in section 1102.5 indicates that the

mere existence of such a confidentiality agreement, without any attempt by the employer to use

the agreement to prevent employees from reporting violations, constitutes a “rule, regulation, or

policy” that prevents this type of reporting.

Courts have also enforced broad confidentiality agreements against former employees,

ents as implicitly not prohibiting the conduct that Labor Code §

Edwards v. Arthur Andersen (2008) 44 Cal.4th 937] [holding that a

confidentiality agreement restricting post-employment conduct w

because it was not a “rule, regulation, or policy” preventing protected employee whistleblowing,

a current employee, and there was no claim of retaliation for

protected whistleblowing]; see also In re JDS Uniphase Corp. Securities Litigation

2002) 238 F.Supp.2d 1127, 1137-39 [holding that comprehensive confidentiality agreements were

enforceable even though they “conflicted with the public policy

employees to assist in securitie stead limiting their scope to not

include protected conduct given the “legitimate interest in preventing dissemination of trade

secrets and confidential business information”].)

Even assuming that the Confidentiality Agreement could be interpreted as a “rule,
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
regulation, or policy” in viola

concede—that would, at most, justify interpreting the Agreement to permit this type of reporting.

This is particularly true here, where Mr. Kitchen has not even alleged that CGI retaliated against

him or anyone else for reporting ies expressly agreed to this approach

through the severability clause in the Confidentiality Agreemen

Severability; Enforcement. If any provision of this Agreement,
the application thereof to any person, place, or circumstance,
be held by a court of competent jurisdiction to be invalid,
unenforceable, or void, the remainder of this Agreement and suc
provisions as applied to other persons, places, and circumstanc
shall remain in full force and effect. Such court shall have t
authority to modify or replace the invalid or unenforceable ter
provision with one that most accurately represents the parties’
intention with respect to the ceable term or
provision.

(Confidentiality Agreement, ¶ 13(b).) For all of these reasons

does not justify striking the Confidentiality Agreement, or any part of it.

Bus. & Prof. Code, § 17200 Does Not Justify Striking the Entire
Confidentiality Agreement

Finally, Mr. Kitchen incorrectly claims that the Confidentiality Agreement’s omission of a

DTSA employee immunity notice sh ement because it constitutes

. & Prof. Code section 17200. Again, Mr. Kitchen has failed to

authority suggesting that section 17200 somehow magnifies the

omitting this notice—which are clearly defined in the DTSA—and thereby warrants invalidating

the Confidentiality Agreement as

where Mr. Kitchen has not alleged that CGI has attempted to enforce the Confidentiality
Agreement against him or anyone e f legal violations.

There is also no basis to assert that omitting a DTSA employee immunity notice

constitutes an unlawful business practice within the scope of s

proscribe specific activities, but in relevant part broadly prohibits…acts or practices which are

unlawful, or unfair, or fraudulent.” (Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176,

1184.) The UCL “governs ‘anti-comp as well as injuries to consumers,
OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
and has as a major purpose `the p ompetition.’” (

Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th 638, 644.) Generally, for section 1720

apply, the alleged wrongful conduct must “be tethered to some legislatively declared policy or

proof of some actual or threatened impact on competition.” (Cel-Tech Communications, Inc. v.

(1999) 20 Cal.4th 163, 186-87.) While the DTSA generally

requires an immunity notice disclosure, it also provides for the scenario where there is no notice

by simply limiting available remedies. The DTSA does not indicate that failure to provide notice

TSA, and the DTSA does not otherwise penalize a lack of notice,

such as with civil or criminal

notice is “unlawful, unfair, or fraudulent,” or how it imposes

competition.

Even assuming that the omission of the DTSA notice did constitute unfair competition

under section 17200, the correct approach—to which the parties agreed in the Confidentiality

Agreement’s severability clause—would be to interpret the Agreement such that it does not

prohibit reporting legal violations in the manner permitted by

Code section 17200 does not justify striking the entire Confidentiality Agreement.

CONCLUSION
r. Kitchen’s Motion fails to provide any valid basis for

striking either the Confidentiality Agreement in its entirety or any part thereof, or CGI’s claims

for exemplary damages and attorneys’ fees, from CGI’s Complaint

HOPKINS & CARLEY
A Law Corporation

Jennifer S. Coleman
Christopher A. Hohn
Attorneys for Plaintiff
CONTROLLER’S GROUP, INC.

OPKINS ARLEY
TTORNEYS 692\3211184.6
ANOSE ALO
PLAINTIFF CONTROLLER’S GROUP, INC.’S OPPOSITION TO DEFENDANT’S MOTION TO STRIKE
I, Diana L. Hodges, declare:

I am a citizen of the United States and employed in Santa Clara County, California. I am

over the age of eighteen years and not a party to the within-entitled action. My business address

is The Letitia Building, 70 South First Street, San Jose, Calif

2019, I served a copy of the within document:

PLAINTIFF CONTROLLER’S

Case Info

Judge

Theodore C. Zayner Track Judge’s New Case

Case No.

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Document Filed Date

February 27, 2019

Case Filing Date

November 20, 2018

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Motion-Secondary: Controller's Group, Inc. vs Daniel Kitchen et al

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