Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_16-cv-07186/USCOURTS-cand-5_16-cv-07186-18/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1332 Diversity-Injunctive &amp; Declaratory Relief

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

JOHN BARKER,

Plaintiff,

v.

INSIGHT GLOBAL, LLC, et al.,

Defendants.

Case No. 16-cv-07186-BLF 

ORDER GRANTING PLAINTIFF’S 

MOTION FOR RECONSIDERATION 

OF COURT’S ORDER AT ECF 176

[Re: ECF 189]

Before the Court is Plaintiff’s Motion for Reconsideration of the Court’s Order Granting 

with Leave to Amend in Part and without Leave to Amend in Part and Denying in Part 

Defendants’ Motion to Dismiss (ECF 176). See Motion, ECF 189. Based on new case authority, 

Plaintiff seeks to pursue two claims previously dismissed by the Court without leave to amend. 

See Motion at 1. Defendants oppose the Motion. Opp’n, ECF 190. For the reasons stated below, 

the Court hereby GRANTS Plaintiff’s Motion for Reconsideration. 

I. BACKGROUND

The underlying facts of this case are well-known1to the Court and the parties and are not 

fully recited here. Plaintiff John Barker brings this action against his former employer Insight 

Global, LLC (“Insight Global”) and Insight Global’s employee benefit plan, Second Amended and 

Restated Insight Global, LLC 2013 Incentive Unit Plan (the “Plan”) (collectively, “Defendants”). 

Barker asserts that Insight Global enforces an unlawful employment agreement, denied him 

benefits under the employee benefit plan, and wrongfully deprived him of his employment 

benefits upon termination. See generally Fourth Amended Complaint (“4AC”), ECF 180. 

 

1 For example, see the Court’s prior orders at ECF 176 and ECF 191. 

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The instant Motion concerns the first two claims in Plaintiff’s Third Amended Complaint 

(“TAC”) (ECF 162). The TAC asserted eight causes of action: (1) declaratory relief; (2) violation 

of California’s Unfair Competition Law; (3) claim for benefits under ERISA plan, 29 U.S.C. § 

1132(a)(1)(B); (4) interference with right under ERISA plan, 29 U.S.C. § 1140; (5) breach of 

fiduciary duty under ERISA, 29 U.S.C. §§ 1109 and 1132(a)(3); (6) waiting time penalties, 

California Labor Code § 203; (7) failure to pay unused vested time off at termination, California 

Labor Code § 227.3; and (8) defamation. See generally TAC, ECF 162, 

The first two causes of action were brought on behalf of a purported class against Insight 

Global. Id. ¶¶ 42–53. The TAC defined the class as follows:

All persons employed at any time by Insight [Global] in California 

during the period from December 15, 2012 to the present who signed 

an employment agreement with Insight [Global] or received an offer 

letter from Insight [Global] that contained a non-solicitation of 

customers and/or non-solicitation of employees provision.

Id. ¶ 33. 

Barker brought the remaining causes of action as individual claims. See TAC ¶¶ 54–82. 

Defendants moved to dismiss the first, second, fourth, and fifth causes of action. See Motion to 

Dismiss TAC, ECF 164. 

On July 24, 2018, the Court granted2 Defendants’ motion to dismiss the first and second 

claims with respect to the non-solicitation of employees provision for failure to state a claim under 

Rule 12(b)(6) without leave to amend. See Order Granting with Leave to Amend in Part and 

without Leave to Amend in Part and Denying in Part Defendants’ Motion to Dismiss (“TAC 

Order”), ECF 176. The Court also granted Defendants’ motion to dismiss the second claim with 

respect to the non-solicitation of employees provision for lack of standing under Rule 12(b)(1) 

without leave to amend; however, this ruling was without leave to amend only because the second 

claim was also dismissed without leave to amend pursuant to Rule 12(b)(6). See TAC Order at 12. 

Plaintiff subsequently filed his 4AC which has been subject to additional motion practice not 

relevant to the instant Motion. See ECF 191. 

 

2 Additional rulings in the Court’s order at ECF 176 are not discussed herein. 

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On November 14, 2018, the Court granted Plaintiff leave to file a motion for 

reconsideration based on a newly decided case which Plaintiff argued changes the law. See ECF 

188. On November 20, 2018, Plaintiff filed the instant Motion seeking to pursue the first and 

second claims of the TAC with respect to the non-solicitation of employees provision that were 

previously dismissed without leave to amend. See Motion at 1, ECF 189. 

II. LEGAL STANDARD

Under Civil Local Rule 7-9, a party may request leave to file a motion for reconsideration 

before a judgment has been entered. Civ. L.R. 7-9(a). A motion for reconsideration may be made 

on three grounds: (1) a material difference in fact or law exists from that which was presented to 

the court, which, in the exercise of reasonable diligence, the moving party did not know at the time 

of the order for which reconsideration is sought; (2) the emergence of new material facts or a 

change of law occurring after the time of such order; or (3) a manifest failure by the court to 

consider material facts or dispositive legal arguments. Civ. L.R. 7-9(b)(1)-(3). The moving party 

may not reargue any written or oral argument previously asserted to the court. Civ. L.R. 7-9(c). 

III. DISCUSSION

Plaintiff argues that reconsideration of the Court’s TAC Order is warranted under 

Civ. L.R. 7-9(b)(2) due to an intervening “material change in law” as set forth in AMN Healthcare, 

Inc. v. Aya Healthcare Services, Inc., 28 Cal. App. 5th 923 (Ct. App. 2018). See Motion at 7. In 

the prior order the Court determined that employee nonsolicitation agreements were valid under 

Loral Corp. v. Moyes, 174 Cal. App. 3d 268 (1985) and later case law, finding that the California 

Supreme Court’s holding in Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008) did not 

overrule Loral. See TAC Order at 12–13. At the time the Court issued the Order, no California 

appellate court had squarely addressed this issue post-Edwards. That has since changed with the 

November 1, 2018 decision AMN Healthcare, Inc. 

The California Court of Appeal held that the nonsolicitation of employees provision at 

issue was void under California Business & Professions Code § 16600. AMN, 28 Cal. App. 5th at 

936. The Court of Appeal expressly rejected Loral based on the California Supreme Court’s 

decision in Edwards. 

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In AMN, all employees of AMN Healthcare, Inc. were required to sign a Confidentiality 

and Non-Disclosure Agreement (“CNDA”) as a condition of their employment. 28 Cal. App. 5th 

at 927. The CNDA included a nonsolicitation of employees provision “preventing [former AMN 

employees] from soliciting any employee of AMN to leave the service of AMN for at least a oneyear period.” Id. The AMN court held that “the nonsolicitation of employee provision in the 

CNDA is void under section 16600 [of the Cal. Bus. & Prof. Code].” Id. at 936. The AMN court 

further found that the plain meaning of § 16600 applied to the nonsolicitation of employees 

provision in the CNDA. Id. at 938. In other words, the AMN court held that a nonsolicitation of 

employees provision “restrain[s] a former employee from engaging in his or her profession, trade 

or business[,] unless the agreement falls within one of the exceptions to [§ 16600].” Id. at 938 

(internal quotation and citation omitted). 

In its analysis, the AMN court departed from the reasoning of Loral Corp. v. Moyes, 174 

Cal. App. 3d 268 (1985). In Loral, a company sued its former employee for breaching a nonsolicitation of employees agreement. 174 Cal. App. 3d at 273–74. The agreement was “a former 

employee’s agreement not to disrupt, damage, impair or interfere with his former employer by 

‘raiding’ its work-staff.” See id. at 275. Loral concluded that the non-solicitation of employees 

agreement did not create a severe restraint on trade, because the company’s employees were free 

to seek employment with a competitor and those employees only lost the option of being first 

contacted by the defendant former employee. Id. at 279–80. As such, Loral held that the nonsolicitation of employees agreement was not void under § 16600. Id. at 280. The AMN court

analyzed Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008), and explicitly noted that 

Loral’s “use of a reasonableness standard in analyzing the nonsolicitation clause there at issue [] 

appears to conflict with Edwards’s interpretation of section 16600, which, under the plain 

language of the statute, prevents a former employer from restraining a former employee from 

engaging in his or her ‘lawful profession, trade, or business of any kind.’” AMN, 28 Cal. App. 5th 

at 938 (quoting Edwards, 44 Cal. 4th at 945) (emphasis in original). 

In its TAC Order, the Court concluded that “Loral is good law” and relied on Loral to 

dismiss Plaintiff’s first and second claims with respect to the non-solicitation of employees 

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provision without leave to amend. See TAC Order at 13–15. However, as discussed above, the 

Court’s conclusion in its TAC Order that “Loral is good law” is further informed by the AMN

decision. Having considered the AMN decision and reviewed Loral and Edwards, the Court is 

convinced by the reasoning in AMN that California law is properly interpreted post-Edwards to 

invalidate employee nonsolicitation provisions. 

Thus, whether as Plaintiff claims, there is an intervening change in law material to the 

Court’s dismissal of Plaintiff’s first and second claims with respect to the non-solicitation of 

employees provision, or whether the Court sua sponte reconsiders its prior order in light of AMN, 

there is a change in law warranting a fresh look and changed outcome. 

The Court has considered Defendants’ Opposition brief (ECF 190) and finds it 

unpersuasive. Indeed, the Court previously recognized that a published Court of Appeal decision 

addressing this precise issue post-Edwards would be important to this Court in its final decision. 

See TAC Order at 14–15; Transcript of May 31, 2018 Hearing at 34:1-7, ECF 179. Thus, even if 

AMN is not controlling or new law which is a necessary prerequisite for Plaintiff’s Motion for 

Reconsideration, the Court retains the discretion to sua sponte reconsider its order and chooses to 

do so here. Second, the Court is not persuaded that the secondary ruling in AMN finding the 

nonsolicitation provision invalid under Loral based upon those employees’ particular job duties 

abrogates or limits the primary holding. Third, the Court finds the analysis in AMN to be 

persuasive. And, finally, the Court will not hold on to a ruling it no longer believes is correct in 

order to avoid complicating this case. That said, the Court is making no ruling on whether 

Plaintiff is a proper class representative for injunctive relief. That issue is more properly 

addressed in a subsequent motion. Accordingly, the Court hereby GRANTS Plaintiff’s Motion for 

Reconsideration. 

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IV. CONCLUSION 

For the foregoing reasons, Plaintiff’s Motion for Reconsideration at ECF 189 is hereby 

GRANTED. Plaintiff is permitted to file a fifth amended complaint that includes the TAC’s first 

and second claims with respect to the non-solicitation of employees provision that were previously 

dismissed without leave to amend. Any such fifth amended complaint shall be filed no later than 

February 1, 2019. 

IT IS SO ORDERED.

Dated: January 11, 2019

______________________________________

BETH LABSON FREEMAN

United States District Judge

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