Filed 8/26/22 Phonexa Holdings v. O’Connor CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

PHONEXA HOLDINGS, LLC,

Plaintiff and Respondent, 

v.

RACHEL O’CONNOR et al.,

Defendants and Appellants.

 B308548

 (Los Angeles County

 Super. Ct. No. 

20STCV29922)

APPEAL from an order of the Superior Court of Los 

Angeles County, Richard L. Fruin, Jr., Judge. Vacated and 

remanded with directions.

Warren Terzian, Tom Warren, Dan Terzian, and Erick 

Kuylman for Defendants and Appellants.

Law Office of Steven R. Friedman, Steven R. Friedman,

and Michael E. Friedman for Plaintiff and Respondent.
2

Plaintiff Phonexa Holdings, LLC (Phonexa) hired 

defendant Rachel O’Connor (O’Connor) as its chief marketing 

officer in February 2020. Phonexa fired her a few months later,

after she raised concerns about the company’s compliance with

COVID-19 public health measures, and then sued her and her 

husband, Sean Halley (Halley), for copying data from a companyowned computer after she was fired. In a special motion to strike 

pursuant to Code of Civil Procedure section 425.16,1the antiSLAPP statute, O’Connor and Halley contended they copied the 

data in preparation to bring various employment claims against 

Phonexa—claims that O’Connor did in fact assert against the 

company in a cross complaint after Phonexa was the first to file 

suit. In this appeal from the trial court’s order denying the 

special motion to strike, we consider whether Phonexa’s claims 

arise from protected petitioning activity and whether they have 

minimal merit.

I. BACKGROUND

A. Phonexa’s Complaint

Phonexa filed its complaint against O’Connor and Halley in 

August 2020; the gist of the lawsuit is that they stole proprietary 

information from the company. Among other things, Phonexa 

alleged O’Connor’s relationship with senior management at the 

company deteriorated and she took two days off work starting on 

July 20, 2020, during which she “cop[ied] the hard drive of her 

work computer to a series of personal external hard drives and 

thumb drives” with help from her husband, Halley. Phonexa 

1 Undesignated statutory references that follow are to the 

Code of Civil Procedure.
3

terminated O’Connor’s employment on July 22, 2020, and 

Phonexa further alleged O’Connor copied the electronic materials

at the direction of Leslie Rosario (Rosario), vice president of 

human resources at Informa Markets Manufacturing, LLC 

(Informa), to steal Phonexa’s trade secrets.2

Phonexa’s specific causes of action against O’Connor are for 

breaching confidentiality agreements, breach of fiduciary duty, 

violation of the Computer Fraud and Abuse Act (CFAA) (18 

U.S.C. § 1030), violation of California’s analogue of the CFAA 

(Pen. Code, § 502), misappropriation of trade secrets, violation of 

the Unfair Competition Law (Bus. & Prof. Code, § 17200), receipt 

of stolen property (Pen. Code, § 496), and conversion.

B. O’Connor’s Cross Complaint

O’Connor filed a cross complaint asserting multiple

employment claims against Phonexa. O’Connor alleged that 

Phonexa’s chief executive officer, David Gasparyan (Gasparyan), 

initially authorized Phonexa employees to work from home in 

compliance with state-wide stay-at-home orders issued in 

response to COVID-19, but several members of O’Connor’s 

marketing team continued to work from Phonexa’s offices and 

Gasparyan “would question and interrogate employees who were 

working from home.” Gasparyan dismissed COVID-19 as a 

“hoax” and, when O’Connor shared employee concerns regarding 

Phonexa’s return-to-work policy with human resources, 

2 Rosario and Informa are named as defendants in the 

complaint but they were not parties to the motion at issue in this 

appeal.
4

Gasparyan demanded the complaining employees’ names and 

threatened retaliation.

O’Connor’s cross-complaint further alleged that she has

various risk factors making her particularly vulnerable to 

COVID-19 and that she worked remotely during her tenure at 

Phonexa. During a July 20, 2020, phone call, O’Connor alleged 

Gasparyan “berated and belittled” her and “falsely accus[ed] her 

of forcing her direct reports to work from home . . . .” O’Connor 

alleged her termination on July 22, 2020, came only hours after 

she “sent a formal written complaint to [Phonexa] via email,” that 

raised “various health and safety issues, including [Phonexa’s] 

non-compliance with state-mandated rules and regulations” and 

accusing Phonexa of retaliation and harassment.

O’Connor’s specific causes of action against Phonexa are for 

wrongful termination in violation of public policy, retaliation in 

violation of Labor Code sections 1102.5 and 6310, violation of 

Labor Code section 6400, violation of the Unfair Competition 

Law, disability discrimination, failure to accommodate, and 

failure to engage in the interactive process.

C. O’Connor and Halley’s Anti-SLAPP Motion

After O’Connor filed her cross complaint, O’Connor and 

Halley filed a special motion to strike Phonexa’s complaint in its 

entirety or, in the alternative, each of the various claims against 

them. They contended their copying of company data, which 

served as the basis for all of Phonexa’s claims against them, was 

undertaken in anticipation of litigation and qualified as protected 

activity under the anti-SLAPP statute. They further contended 

Phonexa could not demonstrate its claims against them have 

minimal merit because (1) free speech and petition guarantees 
5

are a complete defense; (2) several of Phonexa’s claims are 

superseded by the trade secrets claim, which is itself preempted 

by federal law; and (3) the contract claims fail because the 

relevant agreements are unenforceable.3

O’Connor submitted a declaration detailing the 

circumstances of her departure from Phonexa.

4

 According to her 

declaration, after a July 20, 2020, phone call concerning the 

company’s COVID-19 policies, O’Connor “sense[d] 

that . . . Gasparyan was going to fire [her] over [her] following the 

law and the General Counsel’s directions.” She called her lawyer 

3 We omit arguments O’Connor and Halley have abandoned 

on appeal.

4 This declaration attached several exhibits reflecting 

Gasparyan’s attitude toward COVID-19 precautions and the 

pressure that O’Connor and others felt to return to the office. 

These include, for example, an email Gasparyan sent to O’Connor 

stating that, “when it comes to working from the home or the 

office – I decide that, NO ONE ELSE and that’s not the 

department heads decision or encouragement. [¶] 

Additionally, it should not matter for a department head if the 

employee works from home or the office, as long as they want to 

come to the office. That’s the bottom line so let[’]s make their life 

easier than what they have been facing during the Government’s 

massive control of the population and the entire inconsistency of 

their guidelines. . . . You still can work from home until we hear 

the Government’s next guidelines – once it’s open and all this 

crap is over then I will request you to come to the office on a daily 

basis . . . .” In a similar vein, O’Connor received emails from 

Phonexa’s head of human resources which included messages 

from Gasparyan demanding the names of employees raising 

concerns about Phonexa’s COVID-19 policies so he could “cut[ ] 

the fat.”
6

to discuss a potential unlawful retaliation lawsuit against the 

company. Then, on July 22, 2020, O’Connor sent Gasparyan and 

other senior executives an email that stated, among other things, 

that “[t]he workplace is not safe to return to, with no enforced 

social distancing guidelines, no mandatory mask requirements, 

and the requirement that employees sign a waiver of liability in 

the event they get sick to any degree, including death. The 

workplace is not safe at this time, and there is a mandate that 

those who work from home do so.” Less than two hours later, 

Lilit Davtyan (Davtyan), Phonexa’s executive vice president and 

chief financial officer, fired O’Connor. According to O’Connor’s 

declaration, Davtyan said Phonexa would send a courier to collect 

her company-issued computer, and O’Connor “then copied 

data . . . for [her] lawsuit against Phonexa and . . . Gasparyan.” 

O’Connor did so because she “feared that Phonexa would delete 

the data” and believed it “was critical to [her] consulting with 

lawyers about [her] rights and [her] claims.”

O’Connor’s declaration stated Phonexa’s courier arrived to 

retrieve her computer around 3:30 p.m. Prior to the courier’s 

arrival, O’Connor “had various calls with HR about paperwork” 

and communicated with members of the marketing department 

with whom she “had previously scheduled meetings.” O’Connor 

was paid for the full day and believed she was authorized to 

access company data until the workday ended at 5:00 p.m. 

O’Connor’s company-issued computer was also linked to her 

personal Apple iCloud and iMessage accounts. With these links, 

Phonexa would have been able to see text messages she 

exchanged with Rosario discussing “Gasparyan’s unlawful 

conduct; [O’Connor’s] speaking with a lawyer about a retaliation 

lawsuit against Phonexa; and [her] copying certain data for 
7

proving Phonexa’s unlawful conduct and providing to [her] 

lawyer.”5

Halley submitted a declaration explaining that after 

O’Connor told him “she had just been fired from Phonexa,” he 

helped her “creat[e] a cloned copy of her hard drive.” Halley did 

not review the information on the hard drive. O’Connor’s “sole 

aim was copying email and Skype communications,” and she 

believed that if she and Halley “inadvertently” copied other 

material, “Phonexa’s documents were stored on the cloud” and 

she would no longer be able to open copied hyperlinks when her 

credentials were deactivated. In a supplemental declaration, 

O’Connor acknowledged she “sometimes downloaded local copies 

from the cloud to [her] laptop.”

Both O’Connor and Halley averred they gave the copied 

data only to O’Connor’s attorneys. The only Phonexa materials 

O’Connor reviewed following her termination were 

communications relating to her termination.

D. Phonexa’s Opposition to the Anti-SLAPP Motion

Phonexa argued O’Connor and Halley did not satisfy their 

initial burden of demonstrating Phonexa’s claims arose from 

protected activity because (1) Phonexa’s complaint did not 

mention activity taken in anticipation of litigation and (2) the 

relevant conduct was illegal as a matter of law. In the 

alternative, Phonexa contended its claims had minimal merit.

Davtyan (the executive who fired O’Connor) stated in a 

declaration that O’Connor gave “instructions to employees which 

5

 O’Connor attached excerpts of these communications to 

her declaration.
8

[Davtyan] and the CEO [Gasparyan] viewed as contrary to 

Phonexa’s established policies and the chain of command.” 

Following the July 20, 2020, call during which “Gasparyan 

attempted to clear up with the marketing team the confusion 

created by O’Connor regarding the work from home policy,” 

Davtyan and Gasparyan reviewed O’Connor’s computer usage 

and became concerned that she was researching how to export 

data. Davtyan stated the discovery that O’Connor “was exploring 

how to export Phonexa information[ ] contributed significantly to 

her termination.” Davtyan called O’Connor at approximately 

9:00 a.m. on July 22, 2020, to tell her “that her employment at 

Phonexa was terminated immediately” and she no longer had 

permission to access Phonexa data. Phonexa’s general counsel, 

Michael Cordova (Cordova), sent O’Connor an email the same 

morning reiterating these points.6 (Cordova’s email is not 

included as an exhibit to Davtyan’s declaration and it is not 

discussed in Cordova’s declaration.) Davtyan asserted Phonexa 

was not aware O’Connor was contemplating a lawsuit against 

Phonexa when she was terminated.

A consultant hired to perform a forensic examination of 

O’Connor’s computer, Michael Garlie (Garlie), stated someone 

using O’Connor’s credentials installed (and later deleted) 

software used to clone the hard drive after 9:00 a.m. on July 22, 

2020. Garlie prepared a list of the files that were on O’Connor’s 

6

In a declaration filed with her reply brief, O’Connor stated 

that Davtyan “left [her] with a task to complete at Phonexa later 

that day” and did not revoke her permission to access data on her 

Phonexa-issued computer. O’Connor further stated Cordova’s 

email was sent at 10:50 a.m. and she did not see it for several 

hours.
9

computer, including both “program or system files and other files 

which do not contain Phonexa data” and “at least 

300 . . . files . . . [were] easily identifiable as Phonexa data 

because they . . . contain a regular language descriptive name 

and are PDF, Word, Excel, or PowerPoint files . . . .” Garlie billed 

Phonexa $9,883.30 for his work.

Davtyan and another employee in Phonexa’s marketing 

department reviewed Garlie’s list of files and identified several 

that included sensitive business information unrelated to 

Phonexa’s COVID-19 policies. These include, for example, a 

spreadsheet listing Phonexa’s clients, a marketing budget 

spreadsheet, marketing strategy materials, and passwords to 

various marketing and social media accounts.

E. The Trial Court’s Ruling on O’Connor and Halley’s

Anti-SLAPP Motion

The trial court denied O’Connor and Halley’s anti-SLAPP 

motion based on its conclusion that Phonexa’s claims against 

O’Connor and Halley do not arise from protected activity because 

the complaint “makes no mention of [O’Connor and Halley’s] 

allegedly using the information copied from [Phonexa’s] computer 

in connection with the preparation of a lawsuit.” The trial court 

emphasized this was “particularly true” with respect to Halley 

because he was not a plaintiff in O’Connor’s action against 

Phonexa.

The trial court further found, in the alternative, that even 

if O’Connor and Halley could meet their burden to show 

Phonexa’s claims arise from protected activity, Phonexa’s claims 

have minimal merit. The court concluded O’Connor and Halley’s

actions are not protected free speech or petitioning conduct 
10

because “‘self-help’ theft of data under the pretext of fear that 

such data may be lost isn’t protected” and, in any case, the 

“grav[a]men of this action is essentially property theft.” The 

court further found the claims that O’Connor and Halley argued 

were superseded by statute are not in fact superseded and there 

was no need to address the breach of contract claim because 

O’Connor and Halley’s motion “asks the Court to strike the 

Complaint—it does NOT ask that any particular causes of action 

be stricken.”

II. DISCUSSION

Under our Supreme Court’s decision in Wilson v. Cable 

News Network, Inc. (2019) 7 Cal.5th 871 (Wilson), O’Connor and 

Halley’s declarations suffice to make a prima facie showing that 

they copied data from O’Connor’s company-issued computer in 

connection with litigation contemplated seriously and in good 

faith. Contrary to Phonexa’s contention, the record does not 

establish O’Connor and Halley’s conduct was criminal as a 

matter of law, and thus, there is no concern that they are

ineligible for anti-SLAPP protection under the rule announced in 

Flatley v. Mauro (2006) 39 Cal.4th 299 (Flatley). That means 

O’Connor and Halley satisfy the first step of anti-SLAPP 

analysis, i.e., a prima facie showing that the claims asserted 

against them arise from activity protected by the anti-SLAPP 

statute. We accordingly proceed to the second step of the antiSLAPP inquiry and conclude some—but not all—of Phonexa’s 

claims satisfy the anti-SLAPP “minimal merit” (Baral v. Schnitt

(2016) 1 Cal.5th 376, 385, 391) threshold. We will therefore 

vacate the trial court’s order and remand with directions.
11

A. Legal Framework

The anti-SLAPP statute “authorizes a special motion to 

strike a claim ‘arising from any act of [the moving party] in 

furtherance of [the party’s] right of petition or free speech under 

the United States Constitution or the California Constitution in 

connection with a public issue.’ (§ 425.16, subd. (b)(1).)” (Wilson, 

supra, 7 Cal.5th at 884.) The statute “‘does not insulate 

defendants from any liability for claims arising from the 

protected rights of petition or speech. It only provides a 

procedure for weeding out, at an early stage, meritless claims 

arising from protected activity.’” (Monster Energy Co. v. 

Schechter (2019) 7 Cal.5th 781, 788 (Monster Energy).)

“‘Resolution of an anti-SLAPP motion involves two steps. 

First, the defendant must establish that the challenged claim 

arises from activity protected by section 425.16. [Citation.] If the 

defendant makes the required showing, the burden shifts to the 

plaintiff to demonstrate the merit of the claim by establishing a 

probability of success. [Our Supreme Court has] described this 

second step as a “summary-judgment-like procedure.” [Citation.]

The court does not weigh evidence or resolve conflicting factual 

claims. Its inquiry is limited to whether the plaintiff has stated a 

legally sufficient claim and made a prima facie factual showing 

sufficient to sustain a favorable judgment. It accepts the 

plaintiff's evidence as true, and evaluates the defendant’s 

showing only to determine if it defeats the plaintiff's claim as a 

matter of law. [Citation.] “[C]laims with the requisite minimal 

merit may proceed.”’ [Citation.]” (Monster Energy, supra, 7 

Cal.5th at 788.)

Our review of the denial of an anti-SLAPP motion is de 

novo. (Monster Energy, supra, 7 Cal.5th at 788.)
12

B. First Prong: Phonexa’s Claims Against O’Connor and 

Halley Arise from Anti-SLAPP Protected Activity

“The defendant’s first-step burden is to identify the activity 

each challenged claim rests on and demonstrate that that activity 

is protected by the anti-SLAPP statute. A ‘claim may be struck 

only if the speech or petitioning activity itself is the wrong 

complained of, and not just evidence of liability or a step leading 

to some different act for which liability is asserted.’ [Citation.] 

To determine whether a claim arises from protected activity, 

courts must ‘consider the elements of the challenged claim and 

what actions by the defendant supply those elements and 

consequently form the basis for liability.’ [Citation.] Courts then 

must evaluate whether the defendant has shown any of these 

actions fall within one or more of the four categories of ‘“act[s]”’

protected by the anti-SLAPP statute. [Citations.]” (Wilson, 

supra, 7 Cal.5th at 884.)

Courts “have adopted a fairly expansive view of what 

constitutes litigation-related activities within the scope of section 

425.16” (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 908), 

including “the prelitigation investigation of a potential claim.” 

(Tichinin v. City of Morgan Hill (2009) 177 Cal.App.4th 1049, 

1069 (Tichinin) [“we can think of few better ways to burden [the 

right of petition] than to make it difficult and perhaps legally 

risky for people to investigate and find evidence to support 

potential claims”].) Significantly for Halley, a defendant moving 

to strike under section 425.16 need not demonstrate their 
13

petitioning activity was “on [their] own behalf.”7 (Briggs v. Eden 

Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1115-

1116 [holding a defendant tenant counseling organization was 

engaged in protected petitioning activity under anti-SLAPP 

statute when, among other things, it provided advice to the

landlord plaintiffs’ tenant “in anticipation of litigation”] (Briggs); 

accord, MMM Holdings, Inc. v. Reich (2018) 21 Cal.App.5th 167, 

179 [“Nothing in subdivision (e)(4) limits the protected activity to 

petitioning or speech on behalf of a particular client”] (MMM 

Holdings); White v. Lieberman (2002) 103 Cal.App.4th 210, 221 

[holding that Briggs’ “reasoning applies to an attorney acting on 

behalf of his clients”].)

The trial court determined Phonexa’s claims against 

O’Connor and Halley do not arise from petitioning activity 

because the complaint “makes no mention of [O’Connor and 

Halley] allegedly using the information copied from [Phonexa’s] 

computer in connection with the preparation of a lawsuit” and

instead accuses them of illegally accessing Phonexa’s data “as 

part of a conspiracy with [Informa] and [Rosario] . . . .” Crucially, 

the trial court believed it must “accept[ ] [Phonexa’s] allegations” 

at the first step of the anti-SLAPP analysis.

As our Supreme Court explained in Wilson, however, “[t]his 

is not how the anti-SLAPP statute works. In deciding an antiSLAPP motion, a court must at the second step ‘“accept as true 

the evidence favorable to the plaintiff.”’ [Citation.] But [the 

Supreme Court has] never insisted that the complaint’s 

7 Phonexa’s suggestion that Halley did not contend his

conduct was protected under section 425.16, subdivision (e) in the 

trial court is incorrect.
14

allegations be given similar credence in the face of contrary 

evidence at the first step. Such conclusive deference would be 

difficult to reconcile with the statutory admonition that courts 

must look beyond the pleadings to consider any party evidentiary 

submissions as well. (§ 425.16, subd. (b)(2).)” (Wilson, supra, 7 

Cal.5th at 887.) Courts do not defer to the complaint in assessing 

the legal character of a defendant’s actions because “[w]hether it 

is unlawful for a person to perform a particular action or engage 

in a particular activity often depends on whether the person has 

a good reason for doing it—or, at least, has no bad reason for 

doing it.”

8

 (Id. at 886 [rejecting the proposition that if a plaintiff 

alleges their former employer’s actions were prompted by 

discriminatory or retaliatory motives, “the plaintiff’s allegation of 

illicit motive will defeat any argument for anti-SLAPP 

protection”].)

As we shall discuss when addressing the second (minimal 

merit) stage of anti-SLAPP analysis, it is unclear whether 

O’Connor and Halley will ultimately be able to make out a 

successful free speech and petition defense to Phonexa’s claims. 

But for purposes of the prima facie showing that must be made at 

the first (protected activity) stage of analysis, the evidence 

submitted by O’Connor and Halley satisfied their burden to show

they accessed and copied Phonexa’s data in furtherance of 

protected petitioning rights and that this conduct supplies an 

element of each of the claims against them. (Wilson, supra, 7 

8 Phonexa’s contention that the “gravamen” of its complaint 

is O’Connor and Halley’s theft of data rather than petitioning 

activity relies on a now disfavored mode of analysis. (Bonni v. St. 

Joseph Health System (2021) 11 Cal.5th 995, 1010.)
15

Cal.5th at 887.) The trial court therefore erred in concluding 

Phonexa’s allegations (or the absence thereof) barred O’Connor 

and Halley from making the requisite showing of protected 

activity. (Id. at 892 [“If conduct that supplies a necessary 

element of a claim is protected, the defendant’s burden at the 

first step of the anti-SLAPP analysis has been carried, regardless 

of any alleged motivations that supply other elements of the 

claim”].)

Phonexa responds by citing established law that the 

protection afforded to pre-litigation investigation activity does 

not give prospective litigants carte blanche to engage in unlawful 

conduct. Our Supreme Court held in Flatley, supra, 39 Cal.4th 

299, that “where a defendant brings a motion to strike under 

section 425.16 based on a claim that the plaintiff’s action arises 

from activity . . . in furtherance of the defendant’s exercise of 

protected speech or petition rights, but either the defendant 

concedes, or the evidence conclusively establishes, that the 

assertedly protected speech or petition activity was illegal as a 

matter of law, the defendant is precluded from using the antiSLAPP statute to strike the plaintiff’s action.” (Id. at 320, italics 

added; accord, City of Montebello v. Vasquez (2016) 1 Cal.5th 409, 

423-424.) Thus, in Flatley, our Supreme Court held that an 

attorney defendant could not invoke the anti-SLAPP statute in 

an action concerning a purported pre-litigation settlement 

demand that amounted to criminal extortion as a matter of law. 

(Flatley, supra, at 332.) Similarly, in Gerbosi v. Gaims, Weil, 

West & Epstein, LLP (2011) 193 Cal.App.4th 435, a defendant 

law firm could not invoke the anti-SLAPP statute because there 

was “no factual scenario” under which its “wiretapping in the 

course of representing a client” would be “protected by the 
16

constitutional guarantees of free speech and petition.” (Id. at 

446.)

Several courts have held, and we agree, that the Flatley

rule is limited to conduct that is criminal as a matter of law. As 

the Court of Appeal reasoned in Mendoza v. ADP Screening & 

Selection Services, Inc. (2010) 182 Cal.App.4th 1644, “a reading of 

Flatley to push any statutory violation outside the reach of the 

anti-SLAPP statute would greatly weaken the constitutional 

interests which the statute is designed to protect. . . . [A] 

plaintiff’s complaint always alleges a defendant engaged in illegal 

conduct in that it violated some common law standard of conduct 

or statutory prohibition, giving rise to liability, and we decline to 

give plaintiffs a tool for avoiding the application of the antiSLAPP statute merely by showing any statutory violation.” (Id.

at 1654; accord, Towner v. County of Ventura (2021) 63 

Cal.App.5th 761, 771; Klem v. Access Ins. Co. (2017) 17 

Cal.App.5th 595, 610; Finton Construction, Inc. v. Bidna & Keys, 

APLC (2015) 238 Cal.App.4th 200, 210; Bergstein v. Stroock & 

Stroock & Lavan LLP (2015) 236 Cal.App.4th 793, 806-807.)

Here, O’Connor and Halley vigorously dispute Phonexa’s 

allegations that their actions were criminal. As to Phonexa’s 

contention that they received stolen property (Pen. Code, § 496), 

O’Connor and Halley correctly contend there is a factual dispute 

as to whether the data was stolen because there is no evidence 

they intended to permanently deprive Phonexa of this property. 

(MMM Holdings, supra, 21 Cal.App.5th at 185 [holding that the 

defendant attorney, who received documents taken from the 

plaintiff company by a former employee, was not liable for

receiving stolen property because there was no “evidence that 
17

[the former employee] intended to do anything with the 

documents other than to use them in litigation”].)

O’Connor and Halley also dispute that they engaged in 

criminal hacking under federal or state law. (18 U.S.C. § 1030; 

Pen. Code, § 502.) As pertinent here, the CFAA criminalizes 

accessing a computer without authorization or in excess of 

authorization to obtain information (18 U.S.C. § 1030(a)(2)), to 

fraudulently obtain anything of value (18 U.S.C. § 1030(a)(4)), or, 

with varying mental states, to cause damage or loss (18 

U.S.C. § 1030(a)(5)). The California analogue criminalizes 

knowingly accessing and without permission using a computer in 

specified ways (Pen. Code, § 502, subds. (c)(1)-(4)), “[k]nowingly 

and without permission” providing access in violation of the 

statute (Pen. Code, § 502, subd. (c)(6)), and “[k]nowingly and 

without permission” accessing any computer (Pen. Code, § 502, 

subd. (c)(7)).

For purposes of both the CFAA and the California statute, 

a person who is permitted to access a computer system in the 

course of their employment does not exceed authorization or 

permission solely by violating conditions on that authorization or 

permission. (Van Buren v. United States (2021) ___ U.S. ___, ___ 

[141 S.Ct. 1648, 1652-1653] [holding the CFAA’s “‘exceeds 

authorized access’” clause applies “only to those who obtain 

information to which their computer access does not extend, not 

to those who misuse access that they otherwise have”] (Van 

Buren); Chrisman v. City of Los Angeles (2007) 155 Cal.App.4th 

29, 36 [construing Penal Code section 502, subdivision (h)’s 

provision that subdivision (c) “does not apply to punish any acts 

which are committed by a person within the scope of [their]
18

lawful employment” to include conduct that “violate[s] an 

employer’s rules”] (Chrisman).)

Here, there is a factual dispute as to whether O’Connor was 

authorized to access data on her Phonexa-issued computer after 

Davtyan fired her on the phone on the morning of July 22, 2020. 

Phonexa maintains Davtyan verbally revoked this access and 

Cordova confirmed the revocation in writing shortly thereafter; 

O’Connor denies Davtyan’s account of their call, says she did not 

see Cordova’s email until after she and Halley cloned the hard 

drive, and claims her employment did not terminate until the end 

of the day. On this record, the Flatley rule does not apply with 

respect to O’Connor. (Flatley, supra, 39 Cal.4th at 316 [“If . . . a 

factual dispute exists about the legitimacy of the defendant’s 

conduct, it cannot be resolved within the first step but must be

raised by the plaintiff in connection with the plaintiff’s burden to 

show a probability of prevailing on the merits”].)

Unlike O’Connor, Halley was not arguably authorized or 

permitted to access or use Phonexa’s computer as an employee. 

We are not persuaded, however, as a matter of law, that 

O’Connor was not entitled to extend her authorization to Halley, 

and there is no evidence that Halley did anything O’Connor did 

not ask him to do.9 Nothing in the text of either the California 

statute or the CFAA indicates that authorization to access or use 

a computer must come directly from the owner—at least to the 

extent that the party delegating authority does not delegate more 

9

It is true that Phonexa’s computer usage policy prohibits 

“permitting someone to use another’s computer account,” but we 

construe this as a condition on O’Connor’s authorized use—not a 

limitation on the data or information to which that authorization 

extended. (Van Buren, supra, ___ U.S. at ___ [141 S.Ct. at 1653].)
19

than they personally possess.10 The CFAA makes no reference to 

the source of authorization, but the Ninth Circuit has 

emphasized that a scenario in which “former employees whose 

computer access was categorically revoked . . . surreptitiously 

access[ ] data owned by their former employer” using another 

employee’s credentials “bears little resemblance to asking a 

spouse to log in to an email account to print a boarding pass.” 

(United States v. Nosal (9th Cir. 2016) 844 F.3d 1024, 1038; see 

also Wachter, Inc. v. Cabling Innovations, LLC (M.D. Tenn. 2019) 

387 F.Supp.3d 830, 839, fn.4 [declining to address the theory that 

“an entity that allegedly used the plaintiff’s employee as its agent 

while the employee was still employed with the plaintiff . . . can 

be liable under the CFAA[ ] even if its agent personally avoids 

liability because he or she did not exceed his or her authorized 

access” because it was “not develop[ed]” by the plaintiff, but 

noting “the Court . . . searched and found no authority to support 

this particular argument”].)

A contrary reading of these statutes would make a criminal 

of every person who takes control of the mouse while helping 

their partner apply a formula to a spreadsheet on a work-issued 

computer. Courts have routinely and sensibly rejected 

interpretations that “would attach criminal penalties to a 

breathtaking amount of commonplace computer activity.” (Van 

Buren, supra, ___ U.S. at ___ [141 S.Ct. at 1661]; Chrisman, 

supra, 155 Cal.App.4th at 37 [rejecting the view “that an 

10 Indeed, the California statute specifies that permission 

must come from “the owner of the information” only with respect 

to the installation of a “computer contaminant,” which is not 

alleged in this case. (Pen. Code, § 502, subd. (b)(12).)
20

employer’s disapproval” places conduct outside the scope of 

employment because “virtually any misstep, mistake, or 

misconduct by an employee involving an employer’s computer

would . . . be criminal”].)

Because Phonexa’s claims against O’Connor and Halley 

arise from protected activity and O’Connor and Halley’s conduct 

was not criminal as a matter of law, we proceed to the second 

prong of the anti-SLAPP analysis and consider whether 

Phonexa’s claims have minimal merit.

C. Second Prong: Some, Not All, of Phonexa’s Claims 

Have Minimal Merit

1. Computer Fraud and Abuse Act

As we have already discussed, the CFAA subjects to 

criminal liability any person who intentionally accesses a 

computer without authorization or exceeds authorized access and 

performs certain actions. (18 U.S.C. § 1030(a).) To prevail on a 

civil action under the CFAA, a plaintiff must prove the 

defendant’s violation caused damages or losses of at least $5,000 

over any one-year period. (18 U.S.C. §§ 1030(g), 

1030(c)(4)(A)(i)(I), 1030(c)(2)(B)(iii).) Losses include, among other 

things, “the cost of responding to an offense[ and] conducting a 

damage assessment.” (18 U.S.C. § 1030(e)(11).)

The factual dispute that we found to preclude application of 

the Flatley rule in the first stage of our analysis cuts in the 

opposite direction and establishes the minimal merit of Phonexa’s 

CFAA claim at this second stage of anti-SLAPP analysis. 

Phonexa’s evidence that O’Connor and Halley were not permitted 

to access data on the Phonexa-issued computer when they cloned 

the hard drive, in combination with Garlie’s statement that 
21

Phonexa paid over $9,000 to respond to the allegedly 

unauthorized access, suffices to show a potential CFAA violation.

O’Connor and Halley contend, as an affirmative defense, 

that their conduct is protected under the First Amendment. They 

rely on case law analyzing the issue under the framework of the 

Noerr11-Pennington12 doctrine, “a broad rule of statutory 

construction[ ] under which laws are construed so as to avoid 

burdening the constitutional right to petition.” (Tichinin, supra, 

177 Cal.App.4th at 1064, citing Sosa v. DIRECTV, Inc. (9th Cir. 

2006) 437 F.3d 923, 929-931.) The doctrine “immunizes conduct 

encompassed by the petition clause—i.e., legitimate efforts to 

influence a branch of government—from virtually all forms of 

civil liability.” (Tichinin, supra, at 1065.) This includes “conduct 

incidental to a petition or litigation,” i.e. “conduct normally and 

reasonably necessary to an effective exercise of the right to 

petition and not necessarily conduct incidental to actual 

litigation.” (Id. at 1066.)

Here, though, disputed factual issues preclude a finding 

that O’Connor and Halley’s conduct was protected as a matter of 

law. Most significant, it is not clear whether the scope of the 

material copied by O’Connor and Halley “went beyond what was 

reasonably necessary to permit [O’Connor’s] attorneys to prepare 

and prosecute” her action against Phonexa. (Fox Searchlight 

Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 315.) 

Phonexa submitted evidence that at least some of the copied files 

11 Eastern Railroad Presidents Conference v. Noerr Motor

Freight, Inc. (1961) 365 U.S. 127.

12 United Mine Workers of America v. Pennington (1965) 381 

U.S. 657.
22

are unlikely to have any relationship to Phonexa’s COVID-19 

policies. Without additional evidence addressing, for example, 

the relative numbers of relevant and irrelevant files included on 

the cloned hard drive, we cannot conclude as a matter of law that 

O’Connor and Halley’s conduct is protected.

O’Connor and Halley’s various arguments that 

indiscriminate copying of data was reasonably necessary to 

prepare O’Connor’s lawsuit lack merit. The fact that they only 

shared the documents with O’Connor’s attorneys does not render 

the copying of Phonexa’s client list, for instance, reasonably 

necessary to preparing a lawsuit on her behalf. Relatedly, 

O’Connor’s claim that she could not possibly have identified the 

documents relevant to her claims is undermined by her selective 

forwarding of emails. The argument that cloning the hard drive 

was warranted by the risk that Phonexa would not fulfill its 

discovery obligations incorrectly assumes O’Connor would be left 

with no remedy in that scenario. And even if authorities 

condemning “self-help” discovery do not govern pre-litigation 

investigation (see, e.g., Pillsbury, Madison & Sutro v. Schectman

(1997) 55 Cal.App.4th 1279, 1289), O’Connor and Halley’s 

argument that “[c]opying a hard drive ensures that prospective 

plaintiffs satisfy their preservation obligations” (italics added) is 

misplaced with respect to data owned by and to be returned to 

the prospective defendant.13

13 None of the cases O’Connor and Halley cite in relation to 

this point present the scenario we confront in this case. Instead, 

they deal with parties’ failure to preserve data on their personal 

computers (Olney v. Job.com (E.D. Cal., Oct. 24, 2014, No. 1:12-

cv-01724-LJO-SKO), 2014 WL 5430350), the affirmative deletion 

of data from employer-issued computers (Leon v. IDX Systems 

Corp. (9th Cir. 2006) 464 F.3d 951, 956; Postle v. SilkRoad 
23

Although the law is unsettled as to which party bears the 

burden of proof regarding affirmative defenses in the anti-SLAPP 

context, “we need not resolve the dispute here. What is 

important is that, regardless of the burden of proof, the court 

must determine whether [a] plaintiff can establish a prima facie 

case of prevailing, or whether [a] defendant has defeated [the] 

plaintiff’s evidence as a matter of law.” (Dickinson v. Cosby

(2017) 17 Cal.App.5th 655, 683 (Dickinson).) Because there is 

evidence that O’Connor and Halley copied data beyond what was 

reasonably necessary to prepare O’Connor’s lawsuit, their First 

Amendment defense does not defeat Phonexa’s CFAA claim—or 

any of its other claims—as a matter of law.

2. Misappropriation of trade secrets

CUTSA, California’s trade secrets law, “has been 

characterized as having a ‘comprehensive structure and 

breadth . . . .’ [Citation.]”14 (K.C. Multimedia, Inc. v. Bank of 

Technology, Inc. (D. N.H., Feb. 19, 2019, No. 18-cv-224-JL) 2019 

WL 692944; ActionLink, LLC v. Sorgenfrei (N.D. Oh., Jan. 27, 

2010, No. 5:08CV2565), 2010 WL 395243, *5), and the failure to 

preserve evidence owned by third parties (Silvestri v. General 

Motors Corp. (4th Cir. 2001) 271 F.3d 583, 591; Cognate 

BioServices, Inc. v. Smith (D. Md., Aug. 31, 2005, No. WDQ-13-

1797), 2015 WL 5158732, *3-*4).

14

“Trade secret misappropriation occurs [under CUTSA] 

whenever a person: (1) acquires another’s trade secret with 

knowledge or reason to know ‘that the trade secret was acquired 

by improper means’ ([Civ. Code, ]§ 3426.1, subd. (b)(1)); (2) 

discloses or uses, without consent, another’s trade secret that the 

person ‘[u]sed improper means to acquire knowledge of’ (id., subd. 

(b)(2)(A)); (3) discloses or uses, without consent, another’s trade 
24

America Technology & Operations, Inc. (2009) 171 Cal.App.4th 

939, 954 (K.C. Multimedia).) “That breadth suggests a legislative 

intent to preempt the common law. [Citations.] At least as to 

common law trade secret misappropriation claims, ‘[C]UTSA 

occupies the field in California.’ [Citation.]” (Ibid.)

Civil Code section 3426.7 describes CUTSA’s impact on 

other claims. As pertinent here, CUTSA generally “does not 

affect (1) contractual remedies, whether or not based upon 

misappropriation of a trade secret, (2) other civil remedies that 

are not based upon misappropriation of a trade secret, or (3) 

criminal remedies, whether or not based upon misappropriation 

of a trade secret.” (Civ. Code, § 3426.7, subd. (b).) Civil Code 

section 3426.7 “thus ‘expressly allows contractual and criminal 

remedies, whether or not based on trade secret misappropriation.’ 

[Citation.] ‘At the same time, [it] implicitly preempts alternative 

civil remedies based on trade secret misappropriation.’ 

[Citation.]” (K.C. Multimedia, supra, 171 Cal.App.4th at 954.) 

secret that the person, ‘[a]t the time of disclosure or use, knew or 

had reason to know that his or her knowledge of the trade secret 

was’ (a) ‘[d]erived from or through a person who had utilized 

improper means to acquire it’ (id., subd. (b)(2)(B)(i)), (b) 

‘[a]cquired under circumstances giving rise to a duty to maintain 

its secrecy or limit its use’ (id., subd. (b)(2)(B)(ii)), or (c) ‘[d]erived 

from or through a person who owed a duty to the person seeking 

relief to maintain its secrecy or limit its use’ (id., subd. 

(b)(2)(B)(iii)); or (4) discloses or uses, without consent, another's 

trade secret when the person, ‘[b]efore a material change of his or 

her position, knew or had reason to know that it was a trade 

secret and that knowledge of it had been acquired by accident or 

mistake’ (id., subd. (b)(2)(C)).” (DVD Copy Control Assn., Inc. v. 

Bunner (2003) 31 Cal.4th 864, 874.)
25

“As reflected in case law decided under [CUTSA], the 

determination of whether a claim is based on trade secret 

misappropriation is largely factual. [Citations.]” (Ibid.)

Phonexa does not dispute that its common law trade 

secrets claim is superseded by CUTSA. Instead, relying on the 

principle that a complaint is sufficient so long as it states a cause 

of action under any possible legal theory (Prakashpalan v. 

Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1120), 

Phonexa contends it demonstrated a probability of success under 

CUTSA. But Phonexa has failed to reckon with O’Connor and 

Halley’s contention that federal law immunizes them from 

liability under CUTSA.

The Defense of Trade Secrets Act provides, in pertinent 

part, that “[a]n individual shall not be held criminally or civilly 

liable under any Federal or State trade secret law for the 

disclosure of a trade secret that— [¶] (A) is made— [¶] (i) in 

confidence . . . to an attorney; and [¶] (ii) solely for the purpose of 

reporting or investigating a suspected violation of law . . . .” (18 

U.S.C. § 1833(b)(1)(A).) “[T]he plain language of [18 

U.S.C. § 1833(b)(1)] explicitly provides immunity from liability 

under state trade secret laws.” (Gatti v. Granger Medical Clinic, 

P.C. (D. Ut. 2021) 529 F.Supp.3d 1242, 1266; accord, FirstEnergy 

Corp. v. Pircio (N.D. Oh. 2021) 524 F.Supp.3d 732, 738 

[dismissing claims under federal and state trade secrets statutes 

based on immunity conferred by 18 U.S.C. § 1833(b)].)

Here, Phonexa alleged O’Connor and Halley provided 

Phonexa data not only to O’Connor’s attorney, but also to Rosario

at Phonexa’s competitor, Informa. Phonexa failed, however, to 

provide any substantiation for this claim in its opposition to 

O’Connor and Halley’s special motion to strike. O’Connor and 
26

Halley, by contrast, stated they did not share any of Phonexa’s 

trade secrets with Rosario or Informa. Excerpts of the 

communications between O’Connor and Rosario filed by O’Connor 

indicate that she communicated with Rosario—a human 

resources professional—solely to solicit advice regarding her 

anticipated termination and lawsuit.15 Nothing in the record 

indicates O’Connor or Halley shared trade secrets as defined in 

either the state or federal trade secrets statutes with anyone 

other than O’Connor’s attorney.

16

 (Civ. Code, § 3426.1, subd. (d); 

18 U.S.C. § 1839(3).) On this record, O’Connor and Halley have 

accordingly defeated Phonexa’s CUTSA claim as a matter of law. 

(Dickinson, supra, 17 Cal.App.5th at 683.)

3. Receipt of stolen property

Phonexa does not dispute that civil claims for receipt of 

stolen property are subject to supersession by CUTSA. (ATS 

15 Phonexa emphasizes Rosario directed O’Connor to take 

“everything” and suggests this indicates a purpose beyond 

litigation. Phonexa relies, however, on a string of messages that 

is expressly addressed to O’Connor’s employment claims. Rosario 

advised O’Connor not to send an email to Gasparyan “until 

[O’Connor was] certain [she had] sent [her]self copies of emails 

[she] . . . sent to [her] team re: working remotely,” “[e]mails from 

the shitty lawyer with the voluntary in office forms and no mask 

bullshit from before,” and, more generally, “[e]verything.” 

Rosario subsequently referred O’Connor to an attorney, 

suggested she “definitely ha[d] a good case on multiple points,” 

and commented on the attorney’s advice.

16 Phonexa does not allege O’Connor violated CUTSA by 

providing its trade secrets to Halley.
27

Products, Inc. v. Champion Fiberglass, Inc. (N.D. Cal., Jan. 15, 

2015, No. 13-cv-02403-SI), 2015 WL 224815, *2; New Show 

Studios LLC v. Needle (C.D. Cal., June 30, 2014, No. 2:14-cv01250-CAS(MRWx)), 2014 WL 2988271, *9-*10.) Instead, 

Phonexa contends its claim for receipt of stolen property has a 

basis independent of misappropriation of trade secrets.

Phonexa makes no effort to distinguish the factual bases 

for its trade secrets and stolen property claims, however. 

Phonexa’s fourth cause of action for misappropriation of trade 

secrets alleges “O’Connor and Halley . . . acquired substantial 

trade secrets by their unauthorized copying of Phonexa’s data 

from O’Connor’s work computer onto external hard drives and by 

the forwarding of emails to O’Connor’s personal email and by the 

downloading of data from the Phonexa Skype account assigned to 

O’Connor for work by Phonexa.” Phonexa’s sixth cause of action

for receipt of stolen property alleges O’Connor and Halley stole 

Phonexa’s “trade secrets and other valuable and confidential data 

and methods.” Because the complaint sweeps all of the allegedly 

stolen data into the category of trade secrets—and does not allege 

any other basis for its property interest in these data—there is no

substance to the nominal distinction between “trade secrets” and 

“other valuable confidential data and methods” in the stolen 

property claim. (Civ. Code, § 3426.1, subd. (d) [defining “trade 

secret,” in pertinent part, to “mean[ ] information, including 

a . . . method . . . that: [¶] (1) [d]erives independent economic 

value . . . from not being generally known to the public or to other 

persons who can obtain economic value from its disclosure or use; 

and [¶] (2) [i]s the subject of efforts that are reasonable under the 

circumstances to maintain its secrecy”]; see also Silvaco Data 

Systems v. Intel Corp. (2010) 184 Cal.App.4th 210, 239, fn. 22 
28

[“emphatically reject[ing]” the proposition that CUTSA was not 

intended to supersede claims “‘based on the taking of information 

that, though not a trade secret, was nonetheless of value to the 

claimant’”] (Silvaco), disapproved on other grounds in Kwikset 

Corp. v. Superior Court (2011) 51 Cal. 4th 310.) Because these 

claims are based on “the same nucleus of facts,” the stolen 

property claim is superseded by CUTSA. (K.C. Multimedia, 

supra, 171 Cal.App.4th at 962.)

4. Breach of fiduciary duty

Phonexa does not dispute that claims for breach of 

fiduciary duty are subject to supersession by CUTSA. (See, e.g., 

Anokiwave, Inc. v. Rebeiz (S.D. Cal., Sept. 17, 2018, No. 18-cv-629

JLS (MDD)), 2018 WL 4407591, *3-*4; Mattell, Inc. v. MGA 

Entertainment, Inc. (C.D. Cal., Mar. 28, 2011, No. CV 04–9049 

DOC (RNBx)), 2011 WL 8427611, *3.) Phonexa contends, 

however, that its claim for breach of fiduciary duty is not based 

on the same facts as its trade secrets claim. Phonexa argues, for 

instance, that O’Connor breached her fiduciary duty by “fail[ing]

to disclose that she was spending company time seeking to figure 

out how to unlawfully export (steal) Phonexa’s data.” This 

characterization of Phonexa’s fiduciary duty claim is at odds with 

the complaint, which alleges “O’Connor breached all of these 

fiduciary duties to [Phonexa] when she . . . copied and stole 

Phonexa’s data, refused to return that data to Phonexa, secreted 

her unlawful activity from Phonexa, and continue[d] to 

deliberately attempt to deceive Phonexa. The taking of 

Phonexa’s data and property, in and of itself, constitutes a breach 

of O’Connor’s fiduciary duties to [Phonexa].” Because this claim, 
29

as pled, is based on the taking of protected data, it too is 

superseded by CUTSA.

5. Conversion

Phonexa does not dispute that conversion claims are 

subject to supersession by CUTSA. (See, e.g., SunPower Corp. v. 

SolarCity Corp. (N.D. Cal., Dec. 11, 2012, No. 12-CV-00694-

LHK), 2012 WL 6160472, *4-*9.) Its conclusory argument that 

“this claim is not premised upon the data stolen being a trade 

secret” is contradicted by the complaint, which alleges O’Connor 

and Halley “misappropriated [Phonexa’s] trade secrets and 

converted [Phonexa’s] property.” Although the complaint further 

alleges, “[i]n the alternative, to the extent, if any, any of the

misappropriated material is not trade secret, [Phonexa] is 

informed and believes . . . [O’Connor and Halley] are using 

[Phonexa’s] valuable confidential and proprietary data, 

information and methods for their own benefit,” Phonexa offers 

no argument that “any property interest [it] may have in its nontrade secret proprietary information is qualitatively . . . different 

from the grounds upon which its trade secrets are considered 

property.” (Id. at *10.) The conversion claim is therefore 

superseded as well.

6. Penal Code section 502 (California’s CFAA 

analogue)

As O’Connor and Halley concede in their reply brief, they 

“[do not] attack the elements” of Phonexa’s claim under Penal 

Code section 502. They contend, however, that this claim is 

superseded by CUTSA. No published California case has

addressed whether CUTSA supersedes a claim brought under 
30

this statute, and federal courts are divided on the issue. 

(Compare Henry Schein, Inc. v. Cook (N.D. Cal., Mar. 1, 2017, No. 

16-cv-03166-JST), 2017 WL 783617, *5 [“Because [the plaintiff’s] 

section 502 claim cannot survive after the trade secrets facts are 

removed, the Court agrees that the claim is preempted”], Western 

Air Charter, Inc. v. Schembari (C.D. Cal., Oct. 6, 2017, No. CV 17-

00420-AB (KSx)), 2017 WL 10638759, *6 [same], and C&H Travel 

& Tours, Inc. v. Chow (C.D. Cal., Sept. 26, 2018, No. 2:18-cv06690-RGK-MRW), 2018 WL 6427369, *2 [same], with Heieck v. 

Federal Signal Corp. (C.D. Cal., Nov. 4, 2019, No. SACV 18-

02118 AG (KESx)), 2019 WL 6873869, *4 [holding that because 

CUTSA is a “criminal statute,” it falls within CUTSA’s provision 

that it does not supersede “criminal remedies”].) We need not 

decide the issue, however, because Phonexa’s claim does not 

depend on misappropriation of trade secrets.

Phonexa alleges violations of Penal Code section 502, 

subdivision (c)(1)(B), addressing unpermitted use to “wrongfully 

control or obtain money, property, or data”; (c)(2), addressing the 

unpermitted taking, use, or copying of data; (c)(3), addressing 

unpermitted use of computer services; (c)(4), addressing the 

unpermitted “add[ition], alter[ation], damage[ to], delet[ion], or 

destr[uction of] any data, computer software, or computer 

programs”; (c)(6), addressing the unpermitted “provi[sion] or 

assist[ance] providing a means of accessing a computer”; and 

(c)(7), addressing unpermitted access to a computer. None of 

these subdivisions requires that the relevant data or access 

involve trade secrets or other proprietary information. (TMX 

Funding, Inc. v. Impero Technologies, Inc. (N.D. Cal., June 17, 

2010, No. C 10-00202 JF (PVT)), 2010 WL 2509979, *7; see also 

Pen. Code, § 502, subd. (a) [“The Legislature . . . finds and 
31

declares that protection of the integrity of all types and forms of 

lawfully created . . . computer data is vital to the protection of the 

privacy of individuals as well as to the well-being of financial 

institutions, business concerns, governmental agencies, and 

others . . .”], italics added.) Accordingly, regardless of whether 

CUTSA might supersede claims under Penal Code section 502 in 

other circumstances, it does not do so here. There is accordingly 

nothing undermining Phonexa’s showing that its Penal Code 

section 502 claim has minimal merit.

7. Unfair Competition Law

To prevail on an unfair competition law claim, a plaintiff 

must prove the defendant engaged in an “unlawful, unfair or 

fraudulent business act or practice.” (Bus. & Prof. 

Code, § 17200.) As predicates for this claim, Phonexa alleges

violation of CUTSA, the CFAA, and CFAA’s California analogue. 

Although an unfair competition law claim may be superseded by 

CUTSA if it “sound[s] in misappropriation of trade secrets and 

state[s] no basis for relief outside of CUTSA” (Silvaco, supra, 184 

Cal.App.4th at 241), the computer-related claims do not depend 

on misappropriation of trade secrets. Because Phonexa’s claims 

under the CFAA and its California analogue have minimal merit, 

its claim under the unfair competition law does as well.

8. Breach of contract

Phonexa’s complaint alleges O’Connor breached two 

similarly-named contracts: a “Nondisclosure and Confidentiality 

Agreement” and an “Employee Confidentiality, Nondisclosure 

and Nonrecruiting Agreement.” With respect to the first of these 

agreements, the complaint alleges O’Connor breached a provision 
32

under which she was bound “not to copy[ or] 

reproduce . . . any . . . Confidential Information without the prior 

written consent of Phonexa” and “not to remove, copy, or transfer 

Confidential Information from Phonexa computers and/or servers 

without prior express permission from Phonexa.” With respect to 

the second agreement, the complaint alleges O’Connor breached 

provisions under which she was bound not to “use, publish or 

disclose [Phonexa’s] Trade Secrets or Confidential Information.” 

The complaint also alleges O’Connor breached the second 

agreement’s provisions requiring that she, among other things, 

deliver to Phonexa “all records, files, electronic data, 

documents, . . . and the like in [her] possession . . . that pertain in 

any way to the business of [Phonexa] and that [she] prepared, 

used, or came in contact with while employed by [Phonexa].”

O’Connor does not dispute the existence of these 

agreements, Phonexa’s performance, her alleged breach, or 

damages.17 (Oasis West Realty, LLC v. Goldman (2011) 51 

Cal.4th 811, 821 [listing elements of claim for breach of 

contract].) Rather, she contends these provisions amount to

unenforceable agreements not to compete because the

agreements define “confidential information” to include

information other than trade secrets. (Bus. & Prof. Code, § 16600

[subject to specific exceptions, “every contract by which anyone is

restrained from engaging in a lawful profession, trade, or

business of any kind is to that extent void”].) O’Connor cites

17 One caveat: O’Connor contends her alleged breach of an 

agreement to notify Phonexa of data she retained at termination 

did not result in damages. This issue ultimately does not impact 

our analysis.
33

several cases involving employment agreements with sweeping

confidentiality provisions that effectively prevented employees

from continuing to work in their chosen fields. (See, e.g., Brown

v. TSG Management Co., LLC (2020) 57 Cal.App.5th 303, 316-

317, 319 [contract term requiring employee to “keep all

Confidential Information in strictest confidence and trust,” where

“confidential information” was defined to include information

usable in “all aspects of working in the securities industry at

large,” void because it would “plainly bar [the employee] in

perpetuity from doing any work in the securities field”] (Brown);

Dowell v. Biosense Webster, Inc. (2009) 179 Cal.App.4th 564, 577-

578 [agreement prohibiting salespeople from using confidential

information, defined to include “the names of customers,

customer preferences, needs, requirements, purchasing histories

or other customer-specific information,” was “so broadly worded

as to restrain competition”] (Dowell).)

Assuming without deciding the contract provisions similar

to those discussed in Brown and Dowell (e.g., prohibitions against

use and disclosure of broadly-defined confidential information)

are void, these are not the sole basis of Phonexa’s claim for

breach of contract. O’Connor’s alleged breach of her agreement to

return company data in her possession upon termination is not

comparable to terms broadly restricting the use of information

essential to all work within a particular field. Whatever the

merits of O’Connor’s affirmative defense as to specific theories

supporting Phonexa’s contract claim, Phonexa’s claim has

minimal merit under at least one such theory.
34

DISPOSITION

The order denying O’Connor and Halley’s special motion to 

strike is vacated and the matter is remanded with directions to 

grant the motion as to Phonexa’s claims for misappropriation of 

trade secrets, receipt of stolen property, breach of fiduciary duty, 

and conversion, and to deny the motion in all other respects. 

O’Connor and Halley are awarded costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

BAKER, J.

We concur:

RUBIN, P. J.

MOOR, J.