Judge: Kevin C. Brazile, Case: 23STCV06143, Date: 2024-03-14 Tentative Ruling

Hearing Date: March 14, 2024

Case Name: Miller, et al. v. United Investexusa 7 Inc, et al.

Case No.: 20STCV22215 

Matter: Motion for Leave to File Fourth Amended Complaint

Moving Party: Plaintiffs/Cross-Defendants Matthew Miller, Donald Bake, Saad Khan, 

Mark Iroha, Joey Keane, Nathan Abebe, Christian Merchain, and Adam Stone

Responding Party: Defendants/Cross-Complainants Manpow, LLC, United Investexusa 7, 

Inc., and Investexusa 11, Inc.

Notice: OK

Ruling: The Motion is granted.

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On August 10, 2021, Plaintiffs Matthew Miller, Donald Bake, Saad Khan, Mark Iroha, Joey Keane, Nathan Abebe, Christian Merchain, and Adam Stone filed their Third Amended Complaint (“TAC”) for (1) declaratory judgment, (2) violation of the UCL, (3) violation of Pen. Code § 502, and (4) invasion of privacy.  

On August 11, 2020,  Defendants Manpow, LLC, United Investexusa 7, Inc., and United Investexusa 11, Inc. filed their Cross-Complaint for (1) breach of confidentiality agreement, (2) breach of employment agreements against Bake, Khan, and Miller, (3) breach of employment agreements against Abebe, Iroha, Keane, Merchain, and Stone, (4) misappropriation of trade secrets, (5) breach of loyalty, (6) breach of fiduciary duty, (7) violation of the UCL, and (8) concealment.

Plaintiffs now seek leave to file a fourth amended complaint (“4AC”) that primarily adds a new cause of action under Civ. Code § 16600.5, which is new legislation.  

Defendants oppose the amendment because they argue that Civ. Code §§ 16600.1, 16600.5 were not meant to be applied retroactively and there is a strong presumption in California against the retroactive application of a new statute.  

Civ. Code § 16600.1 states:

“(a) It shall be unlawful to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter.

(b) (1) For current employees, and for former employees who were employed after January 1, 2022, whose contracts include a noncompete clause, or who were required to enter a noncompete agreement, that does not satisfy an exception to this chapter, the employer shall, by February 14, 2024, notify the employee that the noncompete clause or noncompete agreement is void.

(2) Notice made under this subdivision shall be in the form of a written individualized communication to the employee or former employee, and shall be delivered to the last known address and the email address of the employee or former employee.

(c) A violation of this section constitutes an act of unfair competition within the meaning of Chapter 5 (commencing with Section 17200).”

Civ. Code § 16600.5 states: 

“(a) Any contract that is void under this chapter is unenforceable regardless of where and when the contract was signed.

(b) An employer or former employer shall not attempt to enforce a contract that is void under this chapter regardless of whether the contract was signed and the employment was maintained outside of California.

(c) An employer shall not enter into a contract with an employee or prospective employee that includes a provision that is void under this chapter.

(d) An employer that enters into a contract that is void under this chapter or attempts to enforce a contract that is void under this chapter commits a civil violation.

(e) (1) An employee, former employee, or prospective employee may bring a private action to enforce this chapter for injunctive relief or the recovery of actual damages, or both.

(2) In addition to the remedies described in paragraph (1), a prevailing employee, former employee, or prospective employee in an action based on a violation of this chapter shall be entitled to recover reasonable attorney’s fees and costs.”

The Court believes that the amendment is proper because Civ. Code § 16600.5 plainly states that it applies “regardless of where and when the contract was signed” and that a “former employee” may bring a private action.  There is nothing to indicate that the time period for former employees from Civ. Code § 16600.1 applies to § 16600.5.

Thus, the Motion is granted.  The Court orders that the 4AC be filed separately.

Moving parties to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.