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AMN Healthcare, Inc. v. Aya Healthcare Services, Inc.

Court of Appeal of California, Fourth Appellate District, Division One

November 1, 2018, Opinion Filed

D071924

Opinion

 [**580]  BENKE, J.—Plaintiff AMN Healthcare, Inc. (AMN), appeals (1) the judgment in favor of defendants Kylie Stein, Robin Wallace, Katherine Hernandez, Alexis Ogilvie (sometimes collectively, individual defendants) and Aya Healthcare Services, Inc. (Aya) (sometimes individual defendants and Aya are collectively referred to as defendants); (2) the injunction preventing AMN from enforcing [*927]  its nonsolicitation of employee provision against individual defendants and its other former employees; and (3) the award of attorney fees in favor of defendants.

AMN and Aya are competitors in the business of providing on a temporary basis health care professionals, in particular  [**581]  “travel nurses,” to medical care facilities throughout the country. Individual defendants were former “travel [***2]  nurse recruiters” of AMN who, for different reasons and at different times, left AMN and joined Aya, where they also worked as travel nurse recruiters.

As a condition of employment with AMN, individual defendants each signed a confidentiality and nondisclosure agreement (CNDA), which, as discussed post, included a provision preventing individual defendants from soliciting any employee of AMN to leave the service of AMN for at least a one-year period.1 Significant in the instant case, a travel nurse was deemed to be an employee of AMN while on temporary assignment through AMN.

AMN sued defendants, asserting various causes of action including breach of contract and misappropriation of confidential information, including trade secrets as set forth in the Uniform Trade Secrets Act, Civil Code section 3426 et seq. (UTSA). Defendants filed a cross-complaint for declaratory relief and unfair business competition.

Defendants moved for summary judgment of AMN's operative complaint and of their own cross-complaint. Defendants claimed that the nonsolicitation of employee provision in the CNDA was an improper restraint on individual defendants' ability to engage in their profession, in violation of Business and Professions Code2 section 16600; that as such, AMN's contract-based [***3]  causes of action failed as a matter of law; and that AMN's tort-based causes of action also failed as a matter of law because the information allegedly used by defendants to recruit travel nurses was not protected.

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28 Cal. App. 5th 923 *; 239 Cal. Rptr. 3d 577 **; 2018 Cal. App. LEXIS 989 ***; 2018-2 Trade Cas. (CCH) P80,576; 2018 WL 5669154

AMN HEALTHCARE, INC., Plaintiff, Cross-defendant, and Appellant, v. AYA HEALTHCARE SERVICES, INC., et al., Defendants, Cross-complainants, and Respondents.

Prior History:  [***1] APPEAL from a judgment of the Superior Court of San Diego County, No. 37-2015-00033229-CU-BT-CTL, Joel M. Pressman, Judge.

Disposition: Affirmed.

CORE TERMS

travel, trade secret, nurses, cause of action, recruiting, individual defendant, employees, e-mail, soliciting, former employee, confidential information, misappropriated, secret, summary judgment, matter of law, confidential, profession, database, nonsolicitation, customers, injunction, restrained, void, competitor, instant case, healthcare, temporary assignment, undisputed evidence, breach of duty, contractual

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Burdens of Proof, Movant Persuasion & Proof, Nonmovant Persuasion & Proof, Appeals, Summary Judgment Review, Standards of Review, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Business & Corporate Compliance, Contracts Law, Breach, Breach of Contract Actions, Torts, Business Torts, Business Torts, Commercial Interference, Trade Secrets Law, Misappropriation Actions, Elements of Misappropriation, Multiple Defendants, Concerted Action, Civil Aiding & Abetting, Civil Conspiracy, Elements, Antitrust & Trade Law, Trade Practices & Unfair Competition, State Regulation, Scope, Standards of Review, Abuse of Discretion, Remedies, Injunctions, Substantial Evidence, Sufficiency of Evidence, Attorney Fees & Expenses, Basis of Recovery, Statutory Awards