Contract analysis

I. Summary and Introduction This memorandum provides an internal analysis of the Reply Brief filed on March 15, 2023, by Gavin Aldrich ("Aldrich") in support of his pending Motion to Strike references to Section 9.1 — the eighteen-month post-termination non-competition clause — from the Cross-Complaint of Aurelius Media Americas Inc. ("AMA"). Aldrich is represented by Cameron Whitfield and Julia Nazarian of Whitfield

II. Argument A — Chilling Effect on Aldrich's Right to Pursue Employment A. Summary of Aldrich's Argument Aldrich's first and most forcefully presented argument is that any reference to Section 9.1 of the Employment Agreement in AMA's pleadings — even when characterized as mere "factual context" and even when AMA expressly disclaims enforcement — has a chilling effect on Aldrich's constitutional and statutory right t

Section 9.1 of the Employment Agreement, as executed on September 5, 2017, and as amended on August 1, 2020, provides that for a period of eighteen (18) months following the termination of Aldrich's employment with AMA, Aldrich shall not directly or indirectly render services to, or become employed by, any "Competing Enterprise." The Employment Agreement defines "Competing Enterprise" as any entity that derives twent

III. Argument B — Section 9.1 Cannot Be Used as "Factual Context" for CUTSA Claims A. Summary of Aldrich's Argument Aldrich's second argument focuses on the relationship between Section 9.1 and AMA's Second Cause of Action for Misappropriation of Trade Secrets under the California Uniform Trade Secrets Act, California Civil Code Section 3426 et seq. Aldrich contends that Section 9.1 is legally irrelevant to AMA's CUT

IV. Argument C — SB 699 and AB 1076 as Further Grounds for Striking Section 9.1 References A. Summary of Aldrich's Argument Aldrich's third argument invokes pending California legislation — specifically Senate Bill 699 ("SB 699") and Assembly Bill 1076 ("AB 1076") — as further grounds for striking all references to Section 9.1 from AMA's Cross-Complaint. SB 699, which upon enactment will be codified as California Bus

V. Additional Observations on Aldrich's Reply In addition to the three principal arguments analyzed above, we note several additional observations regarding Aldrich's Reply Brief that are relevant to our preparation for the hearing. A. Aldrich's Own Declaratory Relief Claim A significant and, in our view, underexploited point is that Aldrich himself has placed the enforceability of the Section 9 restrictive covenants

VI. Predicted Outcome Based on our analysis of Aldrich's three principal arguments, AMA's Opposition and alternative proposal, and the relevant legal authorities, we predict the following outcome at the hearing: Most likely result: The Court will grant the Motion to Strike in part and deny it in part. Grant in part: The Court will likely require AMA to remove Section 9.1 from the caption of the First Cause of Action

VII. Recommendations Based on the foregoing analysis, we recommend the following actions in preparation for and following the hearing on Aldrich's Motion to Strike:

1. Prepare Amended Cross-Complaint. We should have a draft Amended Cross-Complaint prepared and ready for immediate filing in the event the Court grants the Motion to Strike in whole or in part. The amended pleading should incorporate the following modifications: (a) Remove Section 9.1 (non-competition) from the caption of the First Cause of Action (Breach of Employment Agreement), so that the claim is expressly limi

2. Preparation for the Hearing. If the Court questions AMA's position at the hearing, AMA's counsel should be prepared to emphasize the following points: (a) AMA's voluntary offer to amend the Cross-Complaint — removing Section 9.1 from the First Cause of Action caption and adding an express enforcement disclaimer — demonstrates good faith and a willingness to address Aldrich's legitimate concerns about the chilling

3. Strategic Note on Going-Forward Restrictive Covenant Posture. Consistent with our prior analysis set forth in the memorandum dated December 20, 2022, AMA should not attempt to enforce Section 9.1 in any context — whether in this litigation, in settlement discussions, or in communications with third parties. AMA's litigation posture is strongest when it focuses on protectable interests that California law recognize