United States District Court, S.D. California
ROBERT HALF INTERNATIONAL, INC., a Delaware corporation, Plaintiff,
ERIC SHANE AINSWORTH, an individual; LISA LYNN ALDAVA, an individual; SERENA MAI GREENWOOD, an individual; RUBEN D. HERNANDEZ, an individual; DEANA H. SCHWEITZER, an individual; CATHERINE S. SHERMAN, an individual; and DOES 1 through 20, Defendants
For Robert Half International Inc., a Delaware corporation, Plaintiff: Roland M. Juarez, LEAD ATTORNEY, Hunton & Williams, LLP, Los Angeles, CA.
For Eric Shane Ainsworth, an individual, Lisa Lynn Aldava, an individual, Serena Mai Greenwood, an individual, Ruben D. Hernandez, an individual, Deana H. Schweitzer, an individual, Catherine S. Sherman, an individual, Defendants: Clayton J. Hix, LEAD ATTORNEY, Hill, Farrer & Burrill, LLP, Los Angeles, CA.
WILLIAM Q. HAYES, United States District Judge.
The matter before the Court is the Motion to Dismiss Complaint for Failure to State a Claim filed bye all Defendants. (ECF No. 6).
On September 23, 2014, Plaintiff Robert Half International Inc. (" RHI" ) commenced this action by filing a Complaint in San Diego County Superior Court. (ECF No. 1-1). On October 17, 2014, Defendants Eric Ainsworth, Lisa Aldava, Serena Greenwood, Ruben Hernandez, Jr., Deana Schweitzer, and Catherine Sherman removed the action to this Court on the basis of federal question jurisdiction. (ECF No. 1). On October 23, 2014, Defendants filed the Motion to Dismiss Complaint for Failure to State a Claim, seeking dismissal of Plaintiff's first, second, sixth, eighth, ninth, tenth, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, seventeenth, and twenty-second claims for relief. (ECF No. 6). On November 10, 2014, Plaintiff filed an opposition. (ECF No. 7). On November 17, 2014, Defendants filed a reply. (ECF No. 9).
II. Allegations of the Complaint
" RHI is a professional staffing services firm founded in 1948, specializing in recruiting and placing temporary and permanent employees with clients or customers of RHI. RHI has branch offices located throughout North America, including in California." (ECF No. 1-1 at 8). " RHI's success as an industry leader and its competitive advantage are directly related to its ability to hire, train, develop, and retain top talent in whom it invests significant resources and who are entrusted with key confidential business information, including RHI's procedures, financial and personnel plans, objectives and strategies, compensation and bonus structures, training platforms and technology, and information about existing and prospective clients, candidates, and employees." Id. " RHI expends considerable time and resources in these efforts, which provides RHI with a distinct competitive advantage." Id.
" RHI also expends much effort to maintain and cultivate its existing client and candidate relationships and to develop new relationships. To keep its competitive advantage, RHI invests substantial time, effort, and expense into organizing, analyzing, using, and maintaining confidential and proprietary business information. All of the Defendants had access to this information, including RHI's valuable database, the tool that RHI uses to successfully operate its business and to maintain its competitive advantage over competitors and others." Id.
" As a result, as a condition of their employment, RHI requires its employees to sign documents to safeguard RHI's confidential business and personnel information, which create a duty not to disclose or use this information outside of their employment with RHI, including after the termination of their employment." Id. " RHI also enters into employment agreements
with its employees, including each of the defendants here, which prohibit former RHI employees from using RHI's name and their prior employment experience at RHI to market a competing business." Id.
Defendants each signed employment agreements with RHI that prohibited them from " render[ing] services to or enter[ing] into the employment of any person, firm, corporation or other business entity other than one of the RHI Companies without the Employer's written consent." Id. at 12. The employment agreements also prohibited Defendants from using " confidential information ... including, without limitation, information with respect to the name, address, contact persons or requirements of any customer, client, applicant, candidate or employee of any of the RHI Companies ... and information with respect to the procedures advertising, finances, organization, personnel, plans, objectives or strategies of the RHI Companies." Id. at 12-13. The employment agreements further provide at Paragraph Eleven: " Employee agrees that Employee shall not, directly or indirectly, Solicit any Other Employee to either leave the employ of the RHI Companies or to become connected in any way with any Competitor." Id. at 13. Paragraph Thirteen of the employment agreements provides:
After termination of Employee's employment with Employer, Employee shall not indicate on any stationary, business card, advertising, solicitation or other business materials that Employee is or was formerly an employee of Employer, any of its divisions, or any of the RHI Companies except in the bona fide submission of resumes and the filling out of applications in the course of seeking employment.
Id. at 14. The employment agreements further provide that Paragraphs Eleven and Thirteen are " 'reasonable and necessary in order to protect and maintain the proprietary and other legitimate business interests' of RHI and that these restrictions would not prevent them from earning a livelihood." Id.
A. The La Jolla Office
On or about July 25, 2014, Defendants Aldava, Greenwood, and Sherman resigned from their employment with RHI's La Jolla Office and joined Ledgent Staffing, a subsidiary of Plaintiff's competitor, Roth Staffing Companies, L.P. (" Roth" ). " Aldava coordinated the group defection and used RHI's confidential business information to assist Ledgent in making successful offers of employment to Greenwood and Sherman." Id. at 9. On her last day, Defendant Aldava " admitted that she had contacted almost every one of RHI's clients and candidates she had worked with to tell them that she was leaving." Id. Defendant Aldava falsely told a representative of the La Jolla Office's biggest client that " RHI had instructed Aldava that her Permanent Services group should not perform any more work for that client and that RHI was no longer interested in doing business with that client." Id. Defendants Aldava, Sherman, and Greenwood have continued to call clients and candidates with whom they worked at RHI to obtain business for Ledgent.
In the month prior to their resignations, Defendants Aldava, Sherman, and Greenwood took excessive time off. Following their resignations, RHI received emails on Defendant Aldava, Sherman, and Greenwood's former email accounts from candidates seeking positions with RHI's clients.
B. The Carlsbad Office
On or about February 28, 2014, Defendant Ainsworth resigned from RHI's Carlsbad Office to join Ultimate Staffing, a subsidiary of Roth. " Ainsworth exploited
RHI's confidential information after leaving RHI to benefit Ultimate Staffing. Ainsworth has unfairly and illegally solicited numerous current clients that Ainsworth met through RHI." Id. at 10.
In the months after he left, for example, Ainsworth pretended he still worked for RHI to deceive clients into doing business with him and Ultimate Staffing. Ainsworth contacted an RHI client to check the status of a candidate he had placed on behalf of RHI. When the client mentioned that another replacement was needed to be hired, Ainsworth took on the assignment to fill that position, all without telling the client that he no longer worked for RHI. A few days later, the client learned of the deception during a conversation with the RHI contact who had replaced Ainsworth, and expressed shock and surprise about Ainsworth's misrepresentations.
Id. at 10-11. " Ainsworth has exploited RHI's name and goodwill to boost his business. He advertises his RHI experience and the awards he received from RHI on LinkedIn, and he solicits RHI candidates to view his page and recommend his services, all in violation of his contract." Id. at 11. " Ainsworth has also continued soliciting RHI's clients using RHI's confidential business information to gain an unfair competitive advantage. At least two RHI clients are now working with Ainsworth on behalf of Ultimate Staffing, as he, upon information and belief, was able to exploit his knowledge of RHI's confidential and proprietary business information to craft his offers to the clients." Id. " Ainsworth has also sent blast solicitation e-mails to RHI's temporary employee lists, in violation of his contract and the law." Id.
On or about March 24, 2014, Defendant Hernandez resigned from RHI to join Ultimate Staffing. " He too continues to advertise his RHI experience on LinkedIn to gain business for Ultimate Staffing." Id. " Over the course of his employment with RHI, Hernandez printed a lot of RHI's confidential business materials and put them in a training binder. That binder has not been seen at RHI's Carlsbad office since Hernandez left." Id.
Defendants Ainsworth and Hernandez have attempted to solicit a current RHI employee, Danielle Healis.
C. The Orange Office
In July 2014, Defendant Schweitzer resigned from RHI to work at Ledgent. Defendant Schweitzer has contacted and attempted to solicit business from an RHI client without disclosing that she no longer worked for RHI. " Schweitzer's LinkedIn profile also represents that she is currently employed by both Ledgent and RHI." Id. at 12.
Plaintiff asserts twenty-two claims for relief: (1) breach of fiduciary duty against Defendant Aldava; (2) breach of written contract against Defendant Aldava; (3) breach of the implied covenant of good faith and fair dealing against Defendant Aldava; (4) tortious interference with contract against Defendant Aldava; (5) tortious interference with prospective economic advantage against Defendant Aldava; (6) tortious interference with prospective economic advantage against Defendant Aldava; (7) violation of the Lanham Act, 15 U.S.C. section 1125, against Defendant Ainsworth; (8) breach of written contract against Defendant Ainsworth; (9) breach of the implied covenant of good faith and fair dealing against Defendant Ainsworth; (10) tortious interference with prospective economic advantage against Defendant Ainsworth; (11) violation of the Lanham Act, 15 U.S.C. section 1125, against Defendant Schweitzer; (12) breach of written contract against Defendant Schweitzer; (13) breach of the implied covenant of good faith and fair dealing against Defendant
Schweitzer; (14) breach of written contract against Defendant Hernandez; (15) breach of the implied covenant of good faith and fair dealing against Defendant Hernandez; (16) breach of fiduciary duty against Defendant Sherman; (17) breach of written contract against Defendant Sherman; (18) breach of the implied covenant of good faith and fair dealing against Defendant Sherman; (19) breach of written contract against Defendant Greenwood; (20) breach of the implied covenant of good faith and fair dealing against Defendant Greenwood; (21) violation of California Business & Professions Code sections 17200 et seq. (" UCL" ) against all Defendants; and (22) unfair competition against all Defendants.
Plaintiff requests restitution, compensatory damages, consequential damages, punitive damages, exemplary damages, injunctive relief, ...