Contract analysis

I. INTRODUCTION Plaintiff Gavin Aldrich ("Aldrich") moves to strike from the Cross-Complaint filed by Defendant and Cross-Complainant Aurelius Media Americas Inc. ("AMA") on January 20, 2023, all references to and allegations based upon Section 9.1 of the Employment Agreement dated September 5, 2017 (as amended August 1, 2020) — an eighteen-month non-competition clause prohibiting Aldrich from working for any "Compet

II. STATEMENT OF RELEVANT FACTS A. Aldrich's Employment and the Employment Agreement Gavin Aldrich was employed by AMA as Senior Vice President of Original Content and Executive Producer from September 5, 2017, through October 14, 2022. (Cross-Complaint ("CC") ¶ 8.) During his tenure at AMA, Aldrich occupied a senior leadership role within the company's content development and production division, overseeing the crea

Section 9 of the Employment Agreement contains four distinct restrictive covenant provisions, each serving a different protective purpose:

Section 9.1 — Non-Competition. This provision prohibits Aldrich, for a period of eighteen (18) months following the termination of his employment for any reason, from accepting employment with, consulting for, or otherwise providing services to any "Competing Enterprise." The Employment Agreement defines "Competing Enterprise" as any entity deriving twenty-five percent (25%) or more of its revenue from the production

Section 9.2 — Non-Solicitation of Employees. This provision prohibits Aldrich, for a period of twenty-four (24) months following the termination of his employment, from directly or indirectly soliciting, recruiting, or inducing any employee of AMA to leave AMA's employ. (CC ¶ 14(b); Exh. A to CC, § 9.2.)

Section 9.3 — Non-Solicitation of Business Relationships. This provision prohibits Aldrich, for a period of twenty-four (24) months following the termination of his employment, from soliciting or interfering with AMA's business relationships with its clients, vendors, talent, distributors, or network partners. (CC ¶ 14(c); Exh. A to CC, § 9.3.)

Section 9.4 — Confidentiality. This provision imposes an indefinite obligation on Aldrich to maintain the confidentiality of all proprietary and confidential information of AMA, including but not limited to proprietary content, show formats, format bibles, pilot materials, sizzle reels, revenue data, financial projections, talent agreements, distribution agreements, and strategic plans. Section 9.4 expressly prohibit

III. LEGAL STANDARD FOR A MOTION TO STRIKE A motion to strike is governed by Code of Civil Procedure sections 435 and 436. Section 435 authorizes a party to move to strike "any irrelevant, false, or improper matter inserted in any pleading" or to strike "all or any part of any pleading not drawn or filed in conformity with the laws of this state." (Code Civ. Proc. § 435, subd. (b)(1).)

Section 436 provides the court's authority to act on such a motion: "The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the c

IV. ARGUMENT A. AMA's Cross-Complaint Does Not Seek to Enforce the Non-Competition Clause as an Independent Cause of Action Aldrich's motion rests on a fundamental conflation of two distinct concepts: references to a contractual provision and enforcement of that provision. These are not the same thing, and Aldrich's failure to distinguish between them is fatal to his motion. AMA's Cross-Complaint contains four causes

1. Relevance to Aldrich's Knowledge and Intent. The existence and scope of the restrictive covenant provisions in Section 9 of the Employment Agreement — including the non-competition clause — are directly relevant to demonstrate Aldrich's awareness that his Employment Agreement contained broad restrictions on his post-employment conduct, including restrictions on the disclosure of confidential information. Aldrich w

2. Relevance to AMA's Trade Secret Protections (CUTSA). Under CUTSA, a "trade secret" is defined, in relevant part, as information that "[i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy." (Cal. Civ. Code § 3426.1, subd. (d)(2).) The "reasonable efforts" element is a required component of AMA's CUTSA claim, and the burden of establishing it rests on AMA as the party asser

3. Relevance to Aldrich's Own Declaratory Relief Claim. Aldrich has placed the enforceability of the restrictive covenant provisions — including Section 9.1 — Squarely at issue in this litigation by asserting a cause of action for declaratory relief in his own Complaint. Aldrich's Fourth Cause of Action expressly seeks a judicial declaration that the non-competition clause (Section 9.1), the non-solicitation of emplo

Section 16600 of the California Business and Professions Code provides: "Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void." (Bus. & Prof. Code § 16600.) The statute renders non-competition agreements unenforceable as restrictions on an individual's ability to engage in his or her chosen professi

1. Removal of Section 9.1 from the Caption of the First Cause of Action. The First Cause of Action would be re-captioned as "Breach of Employment Agreement (Sections 9.2, 9.3, and 9.4)" or, alternatively, "Breach of Employment Agreement (Section 9.4 — Confidentiality)," eliminating any suggestion that AMA is seeking to enforce Section 9.1 as a standalone basis for its breach of contract claim.

2. Express Disclaimer of Relief Based on Enforcement of Section 9.1. The Amended Cross-Complaint would include an express statement — in the First Cause of Action and in the Prayer for Relief — that AMA does not seek injunctive or monetary relief based on enforcement of the non-competition clause set forth in Section 9.1 of the Employment Agreement.

3. Retention of References to Section 9.1 as Factual Context. The Amended Cross-Complaint would retain references to Section 9.1 solely as factual context relevant to AMA's claims under Section 9.4, CUTSA, and fiduciary duty — specifically, to demonstrate Aldrich's awareness of the comprehensive restrictive covenant framework, AMA's reasonable efforts to maintain trade secret secrecy, and the scope of the contractual

V. CONCLUSION AMA's Cross-Complaint does not seek to enforce the non-competition clause (Section 9.1) as an independent basis for relief. AMA does not seek to enjoin Aldrich from competing or working in the unscripted television industry. AMA does not seek monetary damages measured by Aldrich's competitive activities. The references to Section 9.1 in the Cross-Complaint are included as relevant factual context for AM

II. STATEMENT OF RELEVANT FACTS | 3 A. Aldrich's Employment and the Employment Agreement | 3 B. Aldrich's Conduct and AMA's Cross-Claims | 5 C. AMA's Cross-Complaint (Filed January 20, 2023) | 7 D. Aldrich's Complaint and Declaratory Relief Claim | 8

III. LEGAL STANDARD FOR A MOTION TO STRIKE | 9

IV. ARGUMENT | 10 A. AMA's Cross-Complaint Does Not Seek to Enforce the Non-Competition Clause as an Independent Cause of Action | 10 B. References to § 9.1 Are Relevant to AMA's Properly Pled Causes of Action | 12

1. Relevance to Aldrich's Knowledge and Intent | 12

2. Relevance to AMA's Trade Secret Protections (CUTSA) | 14

3. Relevance to Aldrich's Own Declaratory Relief Claim | 16 C. Cal. Bus. & Prof. Code § 16600 Does Not Prohibit All References to Non-Competition Agreements in Pleadings | 17 D. A Motion to Strike Is Not the Appropriate Vehicle for Aldrich's Challenge | 19 E. In the Alternative, AMA Requests Leave to Amend | 21

V. CONCLUSION | 22 Page(s) Ajaxo Inc. v. ETrade Group, Inc.* (2005) 135 Cal.App.4th 21 | 13 Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739 | 21 Clauson v. Superior Court (1998) 67 Cal.App.4th 1253 | 10 Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937 | 17, 18 FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270 | 14, 15 Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514 | 15 PH II, Inc. v. Superior Court (