Superior Court of Santa Clara County, No. CV249279, Mark H.
[Copyrighted Material Omitted]
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D. Schramm and Amy Carlson for Plaintiff and Appellant.
BoyerLittler Mendelson,, Benjamin A. Emmert and Robert J.
Wilger for Defendant and Respondent.
by Má rquez, J., with Rushing, P. J., and Mihara, J.,
Cal.Rptr.3d 305] Plaintiff Dan Popescu sued Apple Inc.
(Apple) for damages after he was fired by his employer,
Constellium Rolled Products Ravenswood, LLC (Constellium). He
alleged [204 Cal.Rptr.3d 306] that between August and October
2011, Apple took affirmative steps to convince Constellium to
terminate him in retaliation for his resistance to
Apple's alleged illegal anticompetitive conduct. The
court sustained Apple's demurrer to Popescu's first
amended complaint (Complaint) without leave to amend.
appeal involves Popescu's claim for intentional
interference with contractual relations (contract
interference) and his claim for intentional interference with
prospective economic advantage (business interference).
Claims for contract interference and business interference
are separate but related torts. The elements of the two
claims are substantially the same, but a plaintiff alleging
business interference must also show that the defendant's
action " was wrongful 'by some measure beyond the
fact of the interference itself.' [Citation.]" (
Della Penna v. Toyota Motor Sales, U.S.A., Inc.
(1995) 11 Cal.4th 376, 393 [45 Cal.Rptr.2d 436, 902 P.2d 740]
( Della Penna ).) As a general rule, this
wrongfulness element is not required in a contract
interference claim because contracts are entitled to greater
protection from interference.
the issues we will address in this appeal are whether (1) an
employee (Popescu) whose at-will employment contract is
terminated as a result of a third party's (Apple's)
interference must allege that the defendant's conduct was
independently wrongful to state a contract interference
claim, and (2) a third party's alleged anticompetitive
conduct may constitute independently wrongful acts to support
a business interference claim, even if the plaintiff is not
directly harmed by the wrongful acts.
review of the sustaining of a demurrer, we must accept as
true all material allegations of fact that are well pleaded
in the complaint ( Blickman Turkus, LP v. MF Downtown
Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 866-867 [76
Cal.Rptr.3d 325]), regardless of how " improbable they
may be. [Citation.]" ( Del E. Webb Corp. v.
Structural Materials Co. (1981) 123 Cal.App.3d 593, 604
[176 Cal.Rptr. 824] ( Del E. Webb Corp. ).) Based
upon this standard and the law applicable to contract and
business interference claims, we conclude the trial court
sustaining the demurrer to the contract interference claim,
the trial court concluded that Popescu had alleged an at-will
employment agreement with Constellium, and that under
Reeves v. Hanlon (2004) 33 Cal.4th 1140 [17
Cal.Rptr.3d 289, 95 P.3d 513] ( Reeves ), Popescu
could not state a contract
interference claim as a matter of law. As to the business
interference claim, the court held that Apple's alleged
anticompetitive conduct did not constitute an independently
wrongful act supporting Popescu's claim because it was
not " designed to, and [did not] actually cause
interference with the economic relationship" between
Popescu and Constellium.
conclude that the trial court correctly found that Popescu
had alleged an at-will employment agreement. But the court
then erroneously interpreted and applied Reeves as
compelling the conclusion that Popescu " cannot state a
claim for intentional interference with contract."
Reeves, however, concerned a type of claim that is
not at issue here--a claim by a former employer whose at-will
employee was hired away by a new employer. Because of the
dual policy concerns of employee mobility and the promotion
of legitimate competition, the California Supreme Court held
in Reeves that the former employer had to show that
the new employer's conduct in recruiting and hiring its
at-will employee was independently wrongful. ( Reeves,
supra, 33 Cal.4th at pp. 1149-1153.) [204 Cal.Rptr.3d
307] Those same policy considerations do not exist here. This
case involves an employee--not his former employer--suing a
third party for interfering with his employment agreement. We
thus hold that Reeves does not require Popescu to
allege or prove as part of his contract interference claim
that Apple's conduct in interfering with his at-will
employment contract was independently wrongful.
hold that Popescu alleged the required elements of a business
interference claim. As part of that claim, Popescu was not
required to allege that he was directly harmed by an
independently wrongful act so long as he alleged (as he did)
that Apple's wrongful act interfered with his economic
relationship with Constellium.
the demurrer to both causes of action should have been
overruled, we need not address Popescu's contention that
the trial court abused its discretion by denying leave to
amend. We will reverse the judgment with directions that the
court vacate its prior order and enter a new order overruling
the demurrer to both causes of action.
9, 2013, Popescu initiated this action against Apple,
alleging contract interference and business interference
claims. Apple filed a demurrer to the initial pleading.
Apple's demurrer was not heard by the court because, in
response to the demurrer, Popescu filed an amended pleading,
the Complaint, that is at issue in this appeal.
an Arizona resident, alleged that he is " an
aluminum engineering manager who developed cutting edge
alloys for high-tech customers." The gist of his action
is that he " objected to Apple's unlawful trade
practices," and that Apple therefore " convinced
[his] employer to terminate him for cause on a trumped up
basis," thereby " blackball[ing] Popescu from his
2000, Popescu was working for Alcoa, Inc. (Alcoa). He was
hired that year by Algroup Alusuisse (Algroup), an aluminum
supplier that is Alcoa's largest competitor. Algroup
hired Popescu because he had expertise " in marketing
value-added aluminum substrates directly to end users in
high-tech industries." Algroup and Popescu entered into
an employment agreement, which included the following
provision for Popescu's benefit: " 'An extended
separation support package (as an exception to current
policy) which would provide you with up to twelve months of
base salary and medical/dental coverage through paid COBRA,
as well as outplacement services, should your employment
terminate for any reason other than misconduct or
resignation.'" Algroup was acquired by Alcan
Corporation (Alcan) in 2001.
alleged that he was " a stellar and highly valued
employee [who] survived a series of corporate
transactions" that resulted in his employment by
Constellium. In a June 2009 written employment agreement,
Constellium reaffirmed Popescu's severance provision in
his prior agreement with Algroup: " 'Algroup
Severance Plan: Provisions of the Algroup severance, offered
to you at the time of your employment with Algroup, will
continue to be [204 Cal.Rptr.3d 308] honored, up to one
year's severance pay while unemployed, COBRA benefits (if
not eligible elsewhere), outplacement services and unused
alleged that he received performance reviews from Alcan and
Constellium that were " exemplary." His employer
used a scoring system that rated him as " 'Very
Successful' or 'Exceptional.'" During his
last review in February 2011, Constellium designated Popescu
as being in " the very highest 'Critical
Resource' category." The next month, it designated
him as the lead employee in pursuing a relationship with
Apple in which it was looking " to expand the aluminum
look and design of the MacBook and iPad to its iPhone.
Popescu performed superbly."
early 2011, Apple had determined it would " replace the
stainless steel iPhone body with a thinner and lighter
extruded, anodized aluminum alloy."
Apple approached Constellium to develop an alloy with "
specifications [that] were very demanding and required state
of the art expertise and technology." In March 2011, the
business unit president of Constellium Global ATI (of which
Constellium is a subdivision) designated Popescu to lead in
the pursuit of a relationship with Apple in the latter's
goal of using an aluminum alloy for its iPhone products.
Popescu was designated the project lead because of his "
expertise and performance."
and a team of engineers from Constellium commenced work on
the Apple custom alloy project. Between April and August
2011, Popescu oversaw the project, which involved Apple
engineers and managers in California, Constellium's
research and development center in France, and
Constellium's Swiss-based manufacturing unit. Apple
sought and obtained a large degree of information from
Constellium, including its trade secrets regarding aluminum
alloy manufacturing formulas and processes. Constellium,
through Popescu, also gave Apple samples of its extruded
custom alloy and other non-custom alloys.
development was progressing, Apple insisted that Constellium
sign a " 'Development Agreement'"
containing " restrictive terms," including
provisions that (a) Apple was not obligated to purchase any
developed products or to use Constellium as its supplier, and
(b) Constellium, for an effective period of five years,
" would [be] precluded ... from supplying alloy to any
manufacturer of consumer electronics." Apple advised
Constellium that Constellium's competitors (other elite
aluminum alloy suppliers) had already signed such an
agreement. Popescu objected to the agreement and refused to
sign it on Constellium's behalf.
alleged that he subsequently attended a meeting with Apple in
Cupertino on August 30, 2011. The Apple engineers with whom
Popescu had worked for months were silent, while their
superiors, who were new to the project, led the meeting and
" were visibly upset that the nearly complete custom
alloy had outpaced the execution of the development agreement
(Development Agreement)." Apple representatives insisted
that Constellium sign the Development Agreement, which
included an additional restrictive term that required
Constellium to transfer its intellectual property interests
in the custom aluminum alloy to Apple. Popescu again refused
to sign the agreement on behalf of Constellium.
alleged that Apple wanted to use the executed Development
Agreement to restrict competition in the smartphone market.
He alleged that by " lock[ing] up [the elite aluminum]
suppliers with the [R]estrictive Development Agreement, Apple
would be free to develop ... its own extruded alloy body for
the iPhone 5," and to prevent its competitors from
[204 Cal.Rptr.3d 309] a smartphone with a comparable aluminum
alloy body. " Apple saw Popescu as an obstacle to the
Development Agreement, so he was an obstacle to the larger
scheme to restrict competition in smartphones."
also alleged that, during the August 30 meeting, he had
inadvertently activated the recording feature of his
Livescribe Smartpen (the recording incident). Apple's
attorney noticed that the meeting was being recorded,
confiscated the Smartpen, and the meeting continued. After
the meeting, Apple insisted that Constellium commence an
investigation into the recording incident. Apple also
requested that Constellium terminate Popescu, but his
supervisors resisted. Apple then appealed to the executive
management of the private equity firm that owned Constellium,
after which Popescu was terminated for cause. Popescu alleged
that Apple " used the recording incident to leverage
both [his] termination and Constellium's execution of the
Development Agreement." Apple's action allegedly
prevented Popescu from obtaining other employment in the
aluminum alloy industry. At the time he was terminated on
October 28, 2011, Popescu earned more than $200,000 per year,
and he intended to work at Constellium for at least 10 more
years, until he retired.
Popescu was terminated, Constellium signed the Development
Agreement. Constellium was " the last of the elite
aluminum suppliers to sign the Development Agreement and,
thus, the last supplier capable of producing an extruded
alloy case equal or superior to Apple's extruded ...
iPhone 5 case." Popescu alleged that as a result of his
termination and Constellium's execution of the
Development Agreement, Apple was able to misappropriate
Constellium's aluminum alloy trade secrets. He alleged
that the Development Agreements signed by Constellium and
other elite aluminum suppliers--which agreements were "
naked output contracts ... in which a firm bargains for
another's entire output on the condition that the seller
does not deal with the firm's rivals" --had
anticompetitive effects in the global marketplace because
" Apple's competitors [were] denied a potentially
efficiency-increasing resource while the public [was] denied