Source: https://casetext.com/case/amn-healthcare-inc-v-aya-healthcare-servs-inc
Timestamp: 2019-04-25 02:09:16+00:00

Document:
AMN Healthcare, Inc. v. AYA Healthcare Servs., Inc.
AMN Healthcare, Inc.v.AYA Healthcare Servs., Inc.
AMN HEALTHCARE, INC., Plaintiff, Cross-Defendant, and Appellant, v. AYA HEALTHCARE SERVICES, INC. et al., Defendants, Cross-Complainants, and Respondents.
DLA Piper and Stanley J. Panikowski, for Plaintiff, Cross-defendant, and Appellant. Solomon Ward Seidenwurm & Smith, William V. Whelan, San Diego, Mei-Yin M. Imanaka and Deborah A. Yates, for Defendants, Cross-complainants, and Respondents.
DLA Piper and Stanley J. Panikowski, for Plaintiff, Cross-defendant, and Appellant.
Solomon Ward Seidenwurm & Smith, William V. Whelan, San Diego, Mei-Yin M. Imanaka and Deborah A. Yates, for Defendants, Cross-complainants, and Respondents.
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, Inc. (Aya) (sometimes individual defendants and Aya are collectively referred to as defendants); (2) the injunction preventing AMN from enforcing 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 healthcare professionals, in particular "travel nurses," to medical care facilities throughout the country. Individual defendants were former "travel 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 Non-Disclosure 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. Significant in the instant case, a travel nurse was deemed to be an employee of AMN while on temporary assignment through AMN.
Some versions of AMN's CNDA required former employees to refrain from soliciting AMN employees (i.e., travel nurses) for a period of 18 months, rather than one year.
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 sections 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 Code 2 section 16600; that as such, AMN's contract-based 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.
The trial court agreed with defendants, granted summary judgment against AMN, and granted summary adjudication of defendants' declaratory relief cause of action in their cross-complaint. After granting such relief, the court subsequently enjoined AMN from enforcing the nonsolicitation of employee provision in the CNDA as to any former (California) AMN employee and awarded defendants attorney fees.As we explain, we independently conclude the court properly granted summary judgment of AMN's operative complaint and of defendants' declaratory relief cause of action in their cross-complaint. We further conclude the court properly exercised its discretion when it enjoined AMN from attempting to enforce its nonsolicitation of employee provision with respect to its former employees, including individual defendants, and when it awarded defendants their reasonable attorney fees.
Section 2 of the CNDA set forth the obligations of AMN employees not to disclose AMN's "confidential information" both during and after employment with AMN: "In order to protect the Confidential Information of the Company and the Company Affiliates and to promote and ensure the continuity of the relationships of the Company and the Company Affiliates with their customers, healthcare professionals, agents, brokers, Employee covenants and agrees that Employee will not at any time while Employee is employed by the Company in any capacity (whether pursuant to this Agreement or otherwise), or at any time subsequent to Employee's employment with the Company, (i) divulge, publish, disclose, or communicate, in any fashion, form or manner, either directly or indirectly, Confidential Information of the Company or any Company Affiliate to any person, firm, corporation, partnership, association or other entity, or (ii) otherwise directly or indirectly use any Confidential Information for Employee's own benefit or to the detriment of the Company or any Company Affiliate, except that none of the provisions set forth in this Section 2 shall apply to disclosures made to other employees or to officers or directors of the Company or any Company Affiliate, which are made for valid business purposes, at the direction and with the permission of the Company, in connection with the performance by Employee of Employee's duties and responsibilities hereunder."
In support of summary judgment, defendants argued section 3.2 of the CNDA was an unenforceable restraint on trade under section 16600 and thus void. As such, defendants argued AMN's first cause of action for breach of contract failed as a matter of law.
Defendants also argued that AMN's third, fourth, fifth, sixth, eighth, and tenth causes of action failed as a matter of law because there were no underlying, independent wrongful acts accompanying these alleged interference-based causes of action, which generally alleged "tortious interference, breaches of a ‘duty of loyalty’ by Ms. Wallace, and a generic unfair competition claim." Defendants further argued that there was no liability merely because Aya extended job offers to individual defendants who were all at-will employees of AMN; that individual defendants in turn had the right to recruit, and Aya to hire, travel nurses who had formerly worked for AMN and/or were on assignment, albeit temporarily, with AMN; and that AMN's theory that defendants engaged in wrongful conduct in their recruiting efforts by "using or relying on [‘]confidential information[’] ‘other than’ AMN's trade secrets" failed as a matter of law because the use of such information was legally permitted in California so long as the information was not a protected trade secret.
Finally, regarding the second cause of action for misappropriation of a trade secret, and the seventh and ninth causes of action for conspiring and aiding and abetting such misappropriation, respectively, defendants argued that the information allegedly at issue was not a trade secret because such information was not private; and that, in any event, there was no evidence to show any such information had been misappropriated or used by defendants.
AMN argued the nonsolicitation of employee provision in its CNDA was valid and enforceable as it merely prohibited individual defendants from soliciting "current [AMN] employees," namely, travel nurses on temporary assignment with AMN. It also argued at a minimum triable issues of material fact existed regarding whether defendants misappropriated AMN's trade secrets.
AMN argued that because it functioned as an "employment agency," the "names, addresses, and identities of its Travelers ... [were] trade secrets per se by statute," citing to section 16607. AMN also argued the identities, terms, and conditions of employment, assignment histories, and preferences of its travel nurses were trade secrets, even if defendants "may have had access to some of [this] information at issue through independent means." Finally, AMN argued there were triable issues of material fact regarding whether defendants interfered with AMN's prospective and existing contractual relationships and breached their duty of loyalty.
After ruling on various objections to the evidence made by the parties, hearing oral argument, and revisiting the evidence, as noted the court granted summary judgment against AMN and summary adjudication in favor of defendants on their declaratory relief cause of action in their cross-complaint. The court ruled the nonsolicitation of employee provision was an unlawful restraint on trade in violation of section 16600 because it prevented individual defendants from engaging in their lawful trade or profession — soliciting and recruiting travel nurses on temporary assignment with AMN — for at least one-year posttermination. The court also ruled the use of non-trade secret information by a former employee was protected under section 16600.
Finally, the court found no evidence of misappropriation, noting "[w]hen the court digs into the weeds as to each individual defendant, the evidence does not show that the defendants misappropriated trade secrets. After taking the matter under submission, the Court reviewed the evidence with respect to Wallace allegedly forwarding to Meghan Murphy, a recruiting manager for Aya, an email from Theresa [Wilhelm]. The Court has sustained an objection based on foundation .... But even if admissible, the email does not establish a trade secret."
AMN notes in its opening brief that, although the court sustained an objection to the Wilhelm e-mail based on lack of foundation, the e-mail already was in the record as an Aya exhibit and was discussed in declarations of multiple Aya witnesses.
Indeed, the undisputed evidence in the record shows that, if a former AMN recruiter (i.e., individual defendants) was barred for at least one year from "soliciting or recruiting any travel nurse listed in AMN's database, that would [likewise] restrict the number of nurses with whom a recruiter could work with while employed by his or her new staffing agency"; that if a former AMN recruiter was barred from "soliciting or inducing to leave AMN's employment any AMN current travel nurse with whom he or she had worked with as an AMN recruiter, that would [likewise] restrict the number of nurses with whom a recruiter could work with while employed by his or her new staffing agency"; and that "[n]ot being permitted to contact travel nurses who currently work for AMN could limit the amount of compensation a recruiter would receive with his or her new agency after leaving AMN."In addition, the undisputed evidence shows travel nurses typically were assigned by AMN for 13-week periods. Although such assignments were sometimes extended, the point is the assignments were temporary . As such, a one-year, posttermination restriction preventing a former AMN recruiter from contacting and recruiting a travel nurse on a 13-week assignment with AMN at a minimum equates to a period of four such assignments for a given nurse. The undisputed evidence thus shows section 3.2 of the CNDA restricted individual defendants' ability to engage in their "profession, trade, or business."
As discussed post , there is a public group on social media called "The Gypsy Nurse Group" that is comprised of over 30,000 travel nurses. As the name "gypsy" implies, travel nurses tend to move often as a result of their being on temporary assignment.
As noted in footnote 1, ante , some of the AMN recruiters signed a nonsolicitation of employee provision that was for a period of 18 months after termination.
Moyes was decided several years before Edwards . As AMN notes, however, Edwards did not address the provision of the noncompetition agreement prohibiting the plaintiff from recruiting employees of the defendant employer, as the plaintiff in Edwards had not challenged that particular portion of the noncompetition agreement there at issue. ( Edwards , supra , 44 Cal.4th at p. 946, fn. 4, 81 Cal.Rptr.3d 282, 189 P.3d 285.) AMN thus argues Edwards's conclusion that, under the plain meaning of section 16600, an employer "cannot by contract restrain a former employee from engaging in his or her profession, trade, or business[,] unless the agreement falls within one of the exceptions to the rule" ( Edwards , at pp. 946–947, 81 Cal.Rptr.3d 282, 189 P.3d 285 ), does not apply to section 3.2 at issue in this case. We disagree.
We thus doubt the continuing viability of Moyes post- Edwards . But our decision in the instant case does not rest on that analysis alone. Even if Moyes 's use of a reasonableness standard survived Edwards , we find Moyes factually distinguishable to our case. Unlike the former employee in Moyes, who was an executive officer of the plaintiff employer, in the instant case individual defendants were in the business of recruiting and placing on a temporary basis medical professionals, primarily nurses, in medical facilities throughout the country. If enforced, section 3.2 thus restrained individual defendants from engaging in their chosen profession, even in a "narrow" manner or a "limited" way. (See Edwards , supra , 44 Cal.4th at p. 948, 81 Cal.Rptr.3d 282, 189 P.3d 285.) We thus independently conclude section 3.2 of the CNDA is void under section 16600.
See ¶¶ 51 [third cause of action, alleging Wallace breached her duty of loyalty by misappropriating AMN's "confidential and proprietary information — other than Plaintiff's trade secrets — for the purpose of accessing and using such information to compete with Plaintiff " (italics added) ]; 57 [fourth cause of action, alleging defendants engaged in conduct with the intent to "disrupt Plaintiff's economic relationship with its Travelers ... by using or relying on Plaintiff's confidential and proprietary information, other than Plaintiff's trade secrets"]; and 64 [fifth cause of action, alleging defendants failed to act with reasonable care and engaged in wrongful conduct "by using or relying on Plaintiff's confidential and proprietary information, other than Plaintiff's trade secrets]."
We note that, although AMN claims defendants wrongfully used AMN's "confidential information" as defined in section 1.2 of the CNDA "other than trade secrets" in connection with each of these causes of action, by definition the term "confidential information" was synonymous with the term "confidential trade secrets," as set forth in the CNDA.
CACI No. 4402 defines the term "trade secret" as follows: "To prove that the [select short term to describe, e.g., information ] [was/were] [a] trade secret[s], [name of plaintiff] must prove all of the following: [¶] 1. That the [e.g., information ] [was/were] secret; [¶] 2. That the [e.g., information ] had actual or potential independent economic value because [it was/they were] secret; and [¶] 3. That [name of plaintiff ] made reasonable efforts to keep the [e.g., information ] secret." CACI No. 4403 expands on the "secrecy requirement" as follows: "The secrecy required to prove that something is a trade secret does not have to be absolute in the sense that no one else in the world possesses the information. It may be disclosed to employees involved in [name of plaintiff ]'s use of the trade secret as long as they are instructed to keep the information secret. It may also be disclosed to nonemployees if they are obligated to keep the information secret. However, it must not have been generally known to the public or to people who could obtain value from knowing it."
Under Civil Code section 3426.1, subdivision (d), " ‘Trade secret’ means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: [¶] (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and [¶] (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
The undisputed evidence shows that the identity and contact information of travel nurses that AMN claims to be "secret" for purposes of its trade secret cause of action were already known to Aya before any of individual defendants left AMN and went to work for Aya. AMN in its FAC alleged that Stein improperly solicited and recruited on or about June 22, 2015, AMN travel nurses Morris and Meyer (¶ 23); that Hernandez on or about that same date resigned from AMN, joined Aya, and solicited AMN travel nurse Kym Shay, whom Hernandez had "worked with" at AMN; (¶ 29) and that Ogilvie on or about November 4, 2015, resigned from AMN, joined Aya, and solicited AMN travel nurse Sarah Hennis, with whom Ogilvie had worked with while employed by AMN (¶ 30).
Aya employee Anna King, who managed Aya's databases and software, declared under penalty of perjury that Morris first applied for employment with Aya on July 15, 2014, or almost a year before she was recruited by Stein; that Meyer first applied for employment with Aya on May 23, 2012, or about three years before Meyer was recruited by Stein; and that Hennis first applied for employment with Aya on October 14, 2014, or more than a year before being recruited by Ogilvie. Thus, with respect to Morris, Meyer, and Hennis, the undisputed evidence in the record shows there was nothing secret about their identities and contact information, as these nurses were already known to, and had sought employment with, Aya, before each individual defendant left AMN and joined Aya.
Aya had no record in its database of traveler Shay ever working for or being contacted by any Aya employee. The undisputed evidence instead shows Shay initiated contact with Hernandez through personal cell phone messages. Hernandez, however, did not place Shay on any assignment with Aya, or submit Shay for any future placement at Aya, or otherwise enter Shay's information into Aya's database.
For this same reason, we reject AMN's contention that its "customer list" was a protected trade secret pursuant to section 16607. Subdivision (a) of this statute provides a customer list, including the "names, addresses and identity of all employer customers who have listed job orders with an employment agency within a period of 180 days prior to the separation of an employee from the agency ... shall constitute a trade secret and confidential information of, and shall belong to, the employment agency."
Even assuming the AMN travel nurses qualify as "customers" within the meaning of section 16607, subdivision (a), as opposed to "employees" of AMN for purposes of section 3.2 of the CNDA, as AMN aggressively argued throughout the litigation; and even assuming that AMN qualifies as an "employment agency" within the meaning of this statute, AMN has no legal basis for claiming the names and contact information of Morris, Meyer, and Hennis in Aya's database were somehow AMN's trade secret, when the undisputed evidence shows each of these travel nurses already was known to Aya and was in its database, long before each individual defendant left AMN and went to work for Aya.
Our conclusion that as a matter of law the identity and contact information of AMN travel nurses known to Aya, including the three travel nurses named in the FAC, were not "secret" for purposes of Civil Code section 3426.1, subdivision (d) is further supported by the undisputed evidence that "[i]n the travel nurse and healthcare staffing industry, some travel nurses work with many different healthcare recruitment firms in order to increase the likelihood that they will be placed in assignments which fit their needs"; that "[s]ome travel nurses attempt to simultaneously seek placement through several different healthcare staffing agencies before finally accepting a placement"; that "[s]ome travel nurses disclose to their recruiters the terms of the pay packages and offers presented by competing agencies"; that "[s]ome travel nurses have their contact information listed in the database of AMN, Aya, and other staffing agencies at the same time"; that individual defendants "got to know some travel nurses and other AMN employees on a personal level ... [¶] [and] became personal friends with several travel nurses with whom each worked with while at AMN"; that "[r]ecruiters sometimes initiate contact with nurses, and nurses sometimes initiate contact with recruiters"; that "[s]ome recruiters, including some of the individual defendants, sometimes have used their knowledge of the names of travel nurses with whom they worked at AMN in order to find that person in Aya's database"; that there "are tens of thousands of names in Aya's database"; and that travel nurses are employed on a temporary basis and as the name travel nurse implies, they move around frequently, including not only by location, but from employer to employer.
What's more, many travel nurses — including Hennis — belong to a public social media group called the "Gypsy Nurse Group," as noted ante. This group is comprised of over 30,000 travel nurses/members. "Because it is a public group, anyone with a[n] ... account, is, at a minimum, [able to] access ... the profile names of all 30,000 members as a means of trying to ‘friend’ or message them." Thus, for example, Ogilvie in December 2015 saw that Hennis had "posted to The Gypsy Nurse Group page, complaining about her assignment with AMN. On Gypsy Nurse, travel nurses exchange information and share experiences regarding different jobs and agencies and other issues relating to travel nursing." Ogilvie in response checked Aya's database, saw Hennis's "information" was in that database, and sent Hennis a message through social media, as they were "friends."
This additional, undisputed evidence further supports our conclusion that the identities of AMN travel nurses on temporary assignment with AMN, and their placement and contact information, are not "secret," such that they "[d]erive[ ] independent economic value, actual or potential," for purposes of Civil Code section 3426.1, subdivision (d).
Cotton is factually distinguishable from the instant case because the employee information there consisted largely of databases containing lists, compilations, and a unique per diem program. ( Cotton , supra , 126 Cal.App.4th at p. 1018, 24 Cal.Rptr.3d 720.) Here, in contrast, the AMN travel information of Morris, Meyer, and Hennis was already known to Aya before individual defendants left AMN to join Aya. In addition, this information was, in any event, "very general" in nature ( Metro Traffic , supra , 22 Cal.App.4th at p. 861, 27 Cal.Rptr.2d 573 ); was readily ascertainable on social media and by word of mouth, as evidenced by The Gypsy Nurse Group consisting of 30,000 members; and was acquired by individual defendants, not by accessing proprietary databases such as was the case in Cotton , but rather as a result of them working with, and in some cases, becoming personal friends with, travel nurses who, in any event, tended to seek employment with multiple employers, as was the case here with respect to the nurses named in the FAC. Cotton thus does not inform our decision on this issue.
Another category of trade secret information AMN contends was misappropriated related to the alleged confidential Wilhelm e-mail she prepared on or about September 1, 2015. Wallace in turn forwarded this e-mail to an Aya recruiter while she was still an employee of AMN.
The short e-mail provided: "We're seeing an increase in Aya competitives [sic ] lately. Looks like they are not quoting per diem daily but per shift, making it seem like more per work, but is not. They also have lower the [sic ] hourly rates. Additionally, we aren't seeing anything about benefits. [¶] To help poke holes, make sure you are asking the following: [¶] 1. [¶] Is Aya quoting you that you will only be taxed at 20%? [¶] 2. [¶] Is Aya saying the per diem is more but are they quoting your per diem per shift or daily? [¶] 3. [¶] Is your housing stipend being quoted per shift or daily? [and] [¶] 4. [¶] Are they offering you[ ] benefits? [¶] Hope this is helpful!"We conclude as a matter of law that the information in this e-mail is not a protectable trade secret, as it merely addressed information about Aya and some of the terms it used in competing with AMN to recruit travel nurses. In addition, the information in the e-mail is "very general" (see Metro Traffic , supra , 22 Cal.App.4th at p. 861, 27 Cal.Rptr.2d 573 ), as it merely suggested a series of questions that AMN recruiters should consider asking in attempting to "poke holes" in its competitor's efforts to recruit travel nurses, information that, in any event, was routinely shared by travel nurses and was publicly available, as summarized ante .
Moreover, there is no evidence Aya ever "obtain[ed] economic value" from the disclosure of such information. (See Civ. Code, § 3426.1, subd. (d)(1).) Indeed, the evidence is undisputed that Aya did not make any changes to its hiring practices as a result of the September 1 Wilhelm e-mail, and that Aya did not believe the information in the e-mail held any value, other than being "amus[ing]." For this separate reason, we conclude the contents of the e-mail was not a protectable trade secret of AMN.
The last potential trade secret at issue is the TOA list Wallace forwarded to her personal e-mail account while employed by AMN, shortly before she accepted employment with Aya. The list included the names and e-mail addresses of some of the travel nurses placed by Wallace. She testified at deposition that it was "foolish" of her to send the list to her home e-mail account. However, in her declaration in support of summary judgment, Wallace testified that she never used any of the information on that list to contact or place a travel nurse, but instead relied on "leads originating from information contained on Aya's databases, from posts on public travel nursing blogs or websites, from referrals from other [t]ravel [n]urses, or from [t]ravel [n]urses directly contacting [her]."
In its separate statement in opposition to summary judgment, AMN "disputed" the material fact that Wallace never used or referred to the TOA list in placing candidates for Aya, noting, "Wallace has acknowledged, under oath, that the information she took, including the list of Travelers on Assignment ... was confidential and that her actions were wrong." AMN also "disputed" this material fact by citing to Wallace's testimony that she targeted an AMN traveler "she located in Aya's database ... because she remembered information she had learned about her while employed by AMN."
Assuming, without deciding, the TOA list was a protected trade secret of AMN and was subject to the common law trade-secret exception to section 16600, we conclude the undisputed evidence shows AMN was neither harmed by such disclosure nor was such disclosure a "substantial factor" in causing AMN any (presumed) harm. (See Altavion , supra , 226 Cal.App.4th at pp. 41–43, 171 Cal.Rptr.3d 714.) That is, while it may have been "wrong" for Wallace to send this information to her home e-mail account, there is no evidence she or Aya ever used or relied on such information to recruit, or attempt to recruit, any of the travel nurses on that list.
In light of the foregoing analysis, we independently conclude summary judgment was properly granted on AMN's second cause of action for misappropriation of trade secrets.
By virtue of our decision in this case that defendants as a matter of law did not misappropriate any trade secrets of AMN, we further conclude AMN's seventh and ninth causes of action against Aya also fail because each of these causes of action was based on the existence of a viable trade secret that was allegedly misappropriated by Wallace. As such, summary judgment was properly granted as to both of these causes of action.
These causes of action allege Aya wrongfully participated under a conspiracy (eighth cause of action) and an aider and abettor (ninth) theory in Wallace's breach of duty of loyalty to AMN when she sent Aya the September 1 Wilhelm e-mail. However, unlike AMN's seventh and ninth causes of action, which alleged the September 1 e-mail was a protected trade secret of AMN, the eighth and tenth causes of action alleged the e-mail was "confidential information" of AMN "other than trade secrets." As noted ante , however, the term "confidential information" in section 1.2 of the CNDA by definition included trade secrets.
Furthermore, alleging the existence of a conspiracy or aiding and abetting activity does not turn a garden-variety contract cause of action (against Wallace) into a derivative tort cause of action (against Aya). (See Applied Equipment , supra , 7 Cal.4th at pp. 510–511, 28 Cal.Rptr.2d 475, 869 P.2d 454 [noting a "[c]onspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration," and further noting a " ‘ "civil conspiracy, however atrocious, does not per se give rise to a cause of action unless a civil wrong has been committed resulting in damage" ’ "], quoting Doctors' Co.v. Superior Court (1989) 49 Cal.3d 39, 44, 260 Cal.Rptr. 183, 775 P.2d 508 ; see also Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1144, 26 Cal.Rptr.3d 401 [noting "California has adopted the common law rule for subjecting a defendant to liability for aiding and abetting a tort " and noting " ‘ "[l]iability may ... be imposed on one who aids and abets the commission of an intentional tort if the person (a) knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person's own conduct, separately considered, constitutes a breach of duty to the third person" ’ " (italics added) ] ).
As noted, defendants filed a cross-complaint against AMN asserting causes of action for declaratory relief and unfair competition. With respect to the declaratory relief cause of action, defendants (as cross-complainants) alleged an "actual controversy" existed between them and AMN "concerning their respective rights and obligations, if any, under the [CNDA] between AMN and [the] four individual Cross-Complainants" with respect to the enforceability of section 3.2. The UCL claim was similarly premised on AMN's conduct in attempting to enforce section 3.2. Defendants in their cross-complaint sought injunctive relief and an award of attorney fees, among other relief.
The court subsequently held a hearing based on stipulated facts regarding AMN's continued use and enforcement of section 3.2. Defendants argued section 3.2 already had been the subject of a separate litigation brought by AMN against a former employee shortly before AMN filed the instant case against defendants. (See AMN Services LLC. v. Caitlan Grubaugh (San Diego County, Super. Ct. case No. 37-2014-00024257-CU-CO-CTL (Grubaugh ).) In Grubaugh , a different court had granted summary judgment in favor of the former employee, after separately finding that section 3.2 was unenforceable under section 16600 and that the former employee had not misappropriated any AMN trade secrets when she copied for herself a list of travel nurses' e-mail information that she had worked with in the year prior to her leaving AMN, which information she had compiled mostly through social media.
Although the order granting summary judgment in Grubaugh was included in the record in the instant case, we have not relied on that order or otherwise considered it in affirming summary judgment against AMN and summary adjudication in favor of defendants.
Defendants further argued that during the pendency of the instant case, other former AMN recruiters had sought employment with Aya only to receive from AMN's in-house counsel "cease and desist letters" referencing section 3.2. As such, defendants argued AMN should be enjoined from attempting to enforce this provision not just with respect to individual defendants, but as to all former AMN recruiters (in California) who had signed such a provision. Absent such an injunction, defendants argued AMN would continue to file lawsuits against former employees who left AMN and went to work for a competitor.
After hearing oral argument, considering the parties' trial briefs, the stipulated facts and exhibits, and its earlier ruling finding section 3.2 void under section 16600, the court granted injunctive relief. The court enjoined AMN and its employees and agents "from using, enforcing, or attempting to enforce any contract or employment agreement in the State of California which purports to restrain its former employees from directly or indirectly soliciting or inducing, or causing others to solicit or induce, any employee of AMN to leave the service of AMN."
In a subsequent hearing, the court awarded defendants attorney fees under both Civil Code section 3426.4 and Code of Civil Procedure section 1021.5 in the amount of about $169,000. With respect to the latter statute, the court found the enforcement of California's anticompetition law was an "important right affecting the public interest and that a ‘significant benefit’ [was] conferred on the general public" as a result. The court also found that "AMN's practices affected not only competitors but private individuals (employees and former recruiters) who were restrained in employment. Thus, the award is appropriate in the interests of justice."
The court also awarded defendants about $7,000 in costs that was not challenged by AMN in the trial court (or on appeal).
On appeal, AMN contends that the injunction issued by the court is overbroad because it made no allowance for contractual restrictions on employee solicitation using AMN's trade secrets; and that the court erred as a matter of law in awarding fees under either Civil Code section 3426.4 or Code Civil Procedure section 1021.5.
Here, we conclude the court properly exercised its broad discretion in enjoining AMN from attempting to enforce section 3.2 against individual defendants and others similarly situated. As we have noted, section 3.2 is void under section 16600 as applied to former employees of AMN, whose "profession, trade, or business" is recruiting and placing nurses (and other professionals) on temporary assignment.
Moreover, the evidence in the record supports the court's exercise of its discretion, as it shows that AMN had previously brought a suit similar to the instant one against former AMN employee Grubaugh, who, like individual defendants in the instant case, had left the company and joined a competitor; and that AMN was continuing in its efforts to enforce section 3.2 against other former employees as well, as demonstrated by the "cease and desist" letters AMN sent their former employees after they accepted new employment with a competitor. We thus reject AMN's contention that the injunction was overbroad or otherwise imprudently granted.
It is axiomatic that parties in litigation generally pay their own attorney fees. ( Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504, 198 Cal.Rptr. 551, 674 P.2d 253.) Code of Civil Procedure section 1021.5 is an exception to this rule, as it codifies the private attorney general doctrine and acts as an incentive to pursue " ‘ "public interest-related litigation that might otherwise have been too costly to bring." ’ " ( Save Our Heritage Organisation v. City of San Diego (2017) 11 Cal.App.5th 154, 159, 217 Cal.Rptr.3d 360 ( Save Our Heritage ).) Code of Civil Procedure section 1021.5 provides in part: "[A] court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit ... has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement ... are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any."
Here, we conclude the court properly exercised its discretion in awarding defendants their attorney fees under Code of Civil Procedure section 1021.5. Defendants clearly were successful parties within the meaning of the statute, as they prevailed on summary judgment against AMN and on their declaratory relief cause of action in their own cross-complaint. Moreover, as the court found, the instant action involved an important issue affecting the public interest, namely the enforceability of section 3.2, which was included in the CNDA that AMN employees were required to sign as a condition of employment with the company. This posttermination, nonsolicitation of employee provision, if enforced, prevented former AMN employees from recruiting travel nurses and similar professionals who were on temporary assignment with AMN, even if those same travel nurses had applied to, were known by, and/or had previously been placed by, a competitor of AMN, as the instant case aptly shows.
Based on our decision, we need not decide whether attorney fees were also properly awarded defendants under Civil Code section 3426.4, the other statute relied on by the court.
The instant action also conferred a significant benefit on a large class of persons, as the court also recognized: namely, all current and former AMN California employees who had signed a CNDA containing a nonsolicitation of employee provision similar to section 3.2, which restrained their employment for at least one year after leaving AMN; and all California-based competitors of AMN who wanted to hire such former employees (within one year, or 18 months, of their leaving AMN), but were concerned about, or refrained from doing so because of, section 3.2 and the potential risk of litigation resulting from its enforcement.
The judgment, including the injunction against AMN and award of attorney fees in favor of defendants, is affirmed. Defendants are awarded their costs on appeal.

References: v. 
 v. 
 V. 
 V. 
 § 3426
 v. 
 v. 
 v. 
 v.