SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
PRELIMINARY STATEMENT
Defendant and Cross-Complainant Aurelius Media Americas Inc. ("AMA"), by and through its counsel of record, Calderwood & Harkness LLP (Renata Vasquez, Devon Archer, and Nadia Petrov), hereby responds to Plaintiff Gavin Aldrich's First Set of Special Interrogatories (Nos. 1-25) (the "Interrogatories"), served on or about February 6, 2023.
These responses are made pursuant to California Code of Civil Procedure sections 2030.210 through 2030.310. Each response is based upon information and documents reasonably available to AMA at this time. AMA's investigation and fact discovery in this action are ongoing, and AMA has not yet completed its review and analysis of all potentially relevant documents and information. Accordingly, AMA expressly reserves the right to amend, correct, or supplement any of the responses set forth herein as additional information becomes available through the continuing investigation, document review, depositions, third-party discovery, or otherwise.
The objections set forth below, whether general or specific, do not waive any objections not expressly stated herein, and AMA preserves all objections that may be asserted at trial or in any other proceeding. All responses are made subject to, and without waiving, the General Objections set forth immediately below, which are incorporated by reference into each specific response as if fully restated therein. By responding to any Interrogatory, AMA does not concede the relevance, materiality, or admissibility of the information provided, or the propriety of the Interrogatory propounded.
No incidental or implied admission is intended by any response or objection set forth herein. The fact that AMA has responded or objected to any particular Interrogatory should not be construed as an acknowledgment that the Interrogatory, or any premise contained therein, is accurate or well-founded.
GENERAL OBJECTIONS
AMA asserts the following General Objections, each of which is incorporated by reference into every specific response below:
1. Attorney-Client Privilege and Work Product. AMA objects to each and every Interrogatory to the extent it calls for information, documents, or communications protected by the attorney-client privilege, the attorney work product doctrine (California Code of Civil Procedure section 2018.030), the joint defense or common interest privilege, or any other applicable privilege or immunity from disclosure. AMA will not produce or disclose any such information, and nothing contained in these responses should be construed as a waiver of any applicable privilege or protection.
2. Overbreadth and Undue Burden. AMA objects to each and every Interrogatory to the extent it is overbroad, unduly burdensome, or oppressive, including but not limited to any Interrogatory that is not proportional to the needs of this case given the importance of the issues at stake, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.
3. Relevance. AMA objects to each and every Interrogatory to the extent it seeks information that is not relevant to any party's claims or defenses in this action and is not reasonably calculated to lead to the discovery of admissible evidence.
4. Vagueness and Ambiguity. AMA objects to each and every Interrogatory to the extent it contains terms or phrases that are vague, ambiguous, unintelligible, or otherwise susceptible to multiple reasonable interpretations. Where AMA has responded to such an Interrogatory, AMA has done so based on its own reasonable interpretation, and no response should be construed as an acceptance of any alternative interpretation.
5. Compound, Conjunctive, and Disjunctive. AMA objects to each and every Interrogatory to the extent it is compound, conjunctive, or disjunctive in form, such that it effectively constitutes multiple discrete interrogatories and thereby exceeds the permissible number of specially prepared interrogatories under California Code of Civil Procedure section 2030.030.
6. Premature Expert discovery. AMA objects to each and every Interrogatory to the extent it seeks expert opinions, expert analyses, expert work product, or the identity or opinions of consulting or testifying experts before the designated expert discovery period under the Court's scheduling order or applicable provisions of the Code of Civil Procedure.
7. Third-Party Privacy. AMA objects to each and every Interrogatory to the extent it seeks confidential personnel information, personal identifying information, or other private information of non-party employees or former employees of AMA. AMA will endeavor to provide responsive information consistent with the privacy rights of such individuals and subject to the terms of the Stipulated Protective Order entered in the related action Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214, entered by the Court on February 15, 2023, which the parties have stipulated shall apply to discovery in this action.
AMA incorporates these General Objections into each specific response set forth below without repeating them in full. The assertion of a specific objection in any particular response does not imply that the General Objections are inapplicable to that response or to any other response.
SPECIFIC RESPONSES
INTERROGATORY NO. 1
Identify all persons who participated in or were consulted regarding the decision to terminate Plaintiff's employment on October 14, 2022.
RESPONSE TO INTERROGATORY NO. 1:
Objections: AMA objects to this Interrogatory to the extent the term "consulted" is vague and undefined, and to the extent it is overbroad insofar as it could be construed to encompass any person with whom any aspect of the termination was discussed, regardless of the nature or substance of the communication. AMA further objects to this Interrogatory to the extent it seeks the identification of legal counsel — whether in-house or outside — who were consulted in connection with the termination decision, as such information is protected by the attorney-client privilege. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows:
The following persons participated in the decision to terminate Plaintiff's employment with AMA effective October 14, 2022:
1. Jonathan Mercer, President, Aurelius Media Americas Inc. — Mr. Mercer made the final decision to terminate Plaintiff's employment. Mr. Mercer considered the totality of the circumstances, including the results of the DLP audit, the insubordination, and the recommendations of the individuals listed below.
2. Gregory Tanaka, Vice President, Legal & Compliance, Aurelius Media Americas Inc. — Mr. Tanaka advised Mr. Mercer on legal and policy compliance aspects of the termination, including the applicability of the "for cause" provisions of Section 7.2(b) of the Employment Agreement. Mr. Tanaka also presented the DLP audit findings to Mr. Mercer on October 13, 2022.
3. Lorraine Okafor, Senior Vice President, Human Resources, Aurelius Media Americas Inc. — Ms. Okafor was consulted regarding the human resources process and documentation associated with the termination, including compliance with AMA's internal termination procedures and applicable California employment law requirements.
4. Dwayne Prescott, Vice President of Unscripted Programming, Aurelius Media Americas Inc. — Mr. Prescott provided factual information to Mr. Mercer and Mr. Tanaka regarding Plaintiff's conduct in the Unscripted Programming Division, including the circumstances surrounding Plaintiff's unauthorized transmission of proprietary materials and the events of October 10-11, 2022.
AMA declines to identify outside legal counsel consulted in connection with the termination decision, as the identity of such counsel, and the fact and substance of any consultations with such counsel, are protected by the attorney-client privilege. AMA does not waive the privilege by providing the foregoing response.
INTERROGATORY NO. 2
State in detail the factual basis for AMA's determination that Plaintiff's termination was "for cause" as that term is defined in § 7.2(b) of the Employment Agreement dated September 5, 2017, as amended August 1, 2020.
RESPONSE TO INTERROGATORY NO. 2:
Objections: AMA objects to this Interrogatory on the ground that it is compound, as it effectively requires AMA to set forth the factual basis for multiple independent grounds supporting the "for cause" determination. AMA further objects to this Interrogatory to the extent it calls for legal conclusions regarding the interpretation of the Employment Agreement in addition to factual contentions. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows:
AMA's determination that Plaintiff's termination was "for cause" within the meaning of Section 7.2(b) of the Employment Agreement dated September 5, 2017, as amended by the First Amendment dated August 1, 2020 (collectively, the "Employment Agreement"), was based on the following two independent grounds, each of which AMA contends constitutes a separately sufficient basis for the "for cause" determination:
Ground 1 — Unauthorized Transmission of Confidential Information (§ 7.2(b)(i), (ii), (v), and (vi)):
Between approximately July 12, 2021 and September 29, 2022, Plaintiff forwarded approximately 340 emails from his AMA corporate email account (galdrich@aureliusmedia.com) to his personal email account (galdrich.private@Northgate Software.com). These emails contained proprietary and confidential AMA information, including, without limitation, show concept documents, audience analytics reports, revenue projections, profit-and-loss summaries, and talent deal terms. These transmissions were not authorized by AMA and were not made in furtherance of Plaintiff's duties to the Company.
In addition, between approximately March 3, 2022 and August 18, 2022, Plaintiff transmitted seven (7) emails from his AMA corporate email account to info@halcyoncreekprod.com, an email address associated with Halcyon Creek Productions LLC ("Halcyon Creek"), a California-based production company operating in the unscripted/reality television space. Halcyon Creek was formed on February 14, 2022, and its registered agent and apparent principal is Nina Castellanos, a former AMA employee who departed the company in approximately January 2022. These seven transmissions included the following materials:
(a) Three (3) unscripted show format bibles for concepts titled "Apex Endurance," "The Remix," and "Untamed West," which were developed by AMA's Unscripted Programming Division at significant cost and constitute proprietary AMA intellectual property;
(b) Two (2) pilot sizzle reels for "Apex Endurance" and "The Remix," transmitted via Larkspur Technologies links generated from Plaintiff's personal Larkspur Technologies account (rather than AMA's approved file-sharing platform); and
(c) A detailed revenue model for AMA's flagship franchise program "Summit Challenge," which generates approximately $42 million in annual revenue. The revenue model contained detailed line-item financial projections including per-episode production costs, network license fees, international distribution revenues, advertising CPM rates, and talent compensation structures.
AMA contends that these transmissions constituted:
(a) A material breach of the Employment Agreement, specifically Section 9.4 (Confidentiality), which prohibits the "disclosure, use, or transmission of Confidential Information to any person or entity other than in furtherance of Employee's duties to the Company," within the meaning of Section 7.2(b)(i);
(b) Misappropriation of proprietary information within the meaning of Section 7.2(b)(ii);
(c) Willful misconduct materially injurious to the Company within the meaning of Section 7.2(b)(v), insofar as Plaintiff's unauthorized disclosure of trade secrets and proprietary materials to a competitor caused competitive harm and diminished the value of AMA's intellectual property; and
(d) A material violation of AMA's Acceptable Use and Confidentiality Policy (last revised March 2021), which Plaintiff acknowledged by signed acknowledgment dated April 12, 2021, within the meaning of Section 7.2(b)(vi). The Policy expressly prohibits employees from "transmitting, forwarding, or copying Company proprietary information, trade secrets, or confidential data to personal email accounts, personal cloud storage, or non-Company-approved third-party recipients."
Ground 2 — Insubordination (§ 7.2(b)(iv) and (v)):
On October 10, 2022, AMA President Jonathan Mercer directed Plaintiff to restructure the Unscripted Programming Division by consolidating two underperforming show units and reducing divisional headcount by approximately fifteen percent (15%). This restructuring directive was issued as a legitimate business decision in response to declining advertising revenues experienced by AMA in the third quarter of 2022 and was consistent with strategic priorities communicated by AGMG's senior leadership.
Plaintiff refused to comply with the restructuring directive. On October 10, 2022, Plaintiff sent an email to Mr. Mercer stating, in relevant part, that the directive was "creatively bankrupt and commercially idiotic" and that he would "not participate in dismantling [his] division." This email constituted a direct and explicit refusal to comply with a lawful directive from AMA's President.
On October 11, 2022, Mr. Mercer issued a formal written warning to Plaintiff, directing Plaintiff to comply with the restructuring directive and advising that continued refusal could result in further disciplinary action, up to and including termination of employment.
Later on October 11, 2022, rather than complying with the directive or acknowledging the written warning, Plaintiff forwarded the email chain — including his refusal email and the restructuring directive — to six (6) subordinates within the Unscripted Programming Division, including three show-runners and two division heads. Plaintiff included the following comment in the forwarded email: "For your awareness — the London suits are gutting our operation." This dissemination constituted willful misconduct undermining the organizational authority and chain of command of the Company, within the meaning of Section 7.2(b)(v), and was intended to foment opposition to a legitimate management decision.
The termination decision was based on the totality of the circumstances — both the DLP audit findings regarding the confidentiality violations (Ground 1) and the insubordination (Ground 2). AMA contends that each ground independently constitutes a sufficient basis for the "for cause" determination under Section 7.2(b) of the Employment Agreement.
INTERROGATORY NO. 3
State the specific subsection(s) of § 7.2(b) of the Employment Agreement upon which AMA relies for the "for cause" determination, and for each subsection, identify the specific acts or omissions attributed to Plaintiff.
RESPONSE TO INTERROGATORY NO. 3:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
AMA relies upon the following subsections of Section 7.2(b) of the Employment Agreement, and identifies the specific acts or omissions attributed to Plaintiff as to each:
Section 7.2(b)(i) — Material Breach of Agreement: Plaintiff's violation of Section 9.4 (Confidentiality) of the Employment Agreement by transmitting approximately 340 emails containing proprietary AMA information to his personal email account (galdrich.private@Northgate Software.com) and by transmitting seven (7) emails containing proprietary materials — including three show format bibles, two pilot sizzle reels, and the Summit Challenge revenue model — to Halcyon Creek Productions LLC (info@halcyoncreekprod.com), as described in detail in AMA's Response to Interrogatory No. 2, incorporated herein by reference.
Section 7.2(b)(ii) — Misappropriation: Plaintiff's unauthorized transmission of the show format bibles for "Apex Endurance," "The Remix," and "Untamed West," the pilot sizzle reels for "Apex Endurance" and "The Remix," and the Summit Challenge revenue model to Halcyon Creek Productions LLC, a competitor in the unscripted/reality television space. These materials constitute proprietary AMA intellectual property and trade secrets, and Plaintiff's transmission thereof without authorization constitutes misappropriation.
Section 7.2(b)(iv) — Willful Failure to Perform Duties After Written Notice: Plaintiff's refusal to comply with the restructuring directive issued by AMA President Jonathan Mercer on October 10, 2022, which continued after Mr. Mercer issued a formal written warning on October 11, 2022 directing compliance.
Section 7.2(b)(v) — Willful Misconduct Materially Injurious to the Company: Plaintiff's dissemination of the restructuring refusal email chain to six subordinates, accompanied by the disparaging commentary "the London suits are gutting our operation," which undermined the chain of command and organizational authority of the Company. Additionally, Plaintiff's transmission of proprietary trade secrets and confidential materials to a competitor (Halcyon Creek Productions LLC), which caused competitive harm and diminished the value of AMA's intellectual property, constitutes willful misconduct materially injurious to the Company.
Section 7.2(b)(vi) — Material Violation of Written Policies: Plaintiff's violation of AMA's Acceptable Use and Confidentiality Policy (last revised March 2021) by transmitting proprietary information to his personal email account and to a non-Company-approved third-party recipient (Halcyon Creek Productions LLC). Plaintiff acknowledged receipt, review, and understanding of this Policy by signed acknowledgment dated April 12, 2021.
INTERROGATORY NO. 4
Describe in detail the data loss prevention ("DLP") audit referenced in AMA's Cross-Complaint, including: (a) the date the audit was initiated; (b) the person(s) who initiated the audit; (c) the reason the audit was initiated; (d) the dates on which findings were reported and to whom; and (e) the date on which the audit was completed.
RESPONSE TO INTERROGATORY NO. 4:
Objections: AMA objects to this Interrogatory to the extent responses concerning the DLP audit implicate communications with, or activities undertaken at the direction of, legal counsel, as such information is protected by the attorney-client privilege. AMA further objects to this Interrogatory to the extent the DLP audit, or any portion thereof, was conducted in anticipation of litigation, as such information may be protected by the work product doctrine. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows:
(a) Date Initiated: The DLP audit was initiated in approximately August 2022. AMA is continuing to investigate the specific date on which the audit commenced and will supplement this response when the specific date has been confirmed. The DLP audit was a routine, calendar-driven security audit conducted as part of AMA's ongoing information security program, and was not an audit triggered by any specific dispute, grievance, or personnel issue involving Plaintiff.
(b) Person(s) Who Initiated: The DLP audit was initiated by AMA's internal IT security team under the general direction of Gregory Tanaka, Vice President, Legal & Compliance. The specific IT security team member(s) who conducted the audit will be identified in supplemental responses, subject to third-party privacy protections and the terms of the applicable Stipulated Protective Order.
(c) Reason Initiated: The DLP audit was a routine data loss prevention audit. AMA conducts periodic DLP audits of email forwarding activity, external data transmissions, and other potential data exfiltration vectors as part of its comprehensive information security program. The audit was not initiated in response to Plaintiff's dispute with Jonathan Mercer regarding the restructuring directive, which occurred in October 2022 — approximately two months after the DLP audit was already underway. The audit was not targeted at Plaintiff specifically but encompassed a broader review of email forwarding activity across multiple AMA accounts.
(d) Dates Findings Reported:
• Preliminary DLP findings were reported to Gregory Tanaka on approximately September 6, 2022. These preliminary findings identified anomalous email forwarding activity from Plaintiff's AMA corporate email account, including a high volume of emails forwarded to an external personal email address.
• Following the preliminary findings, a more detailed forensic review of Plaintiff's AMA-issued laptop and corporate email account was initiated. That forensic review was completed on approximately October 3, 2022. The forensic review identified the specific transmissions to Halcyon Creek Productions LLC (info@halcyoncreekprod.com) and the Larkspur Technologies links created from Plaintiff's personal account containing AMA proprietary files.
• Mr. Tanaka presented a summary of the DLP audit findings — including both the email forwarding to Plaintiff's personal account and the transmissions to Halcyon Creek — to AMA President Jonathan Mercer on October 13, 2022, one day before the termination decision.
(e) Date Completed: The forensic review was substantially complete by October 3, 2022. Additional analysis, documentation, and preservation activities continued through the termination date (October 14, 2022) and thereafter in connection with the preparation and filing of AMA's Cross-Complaint in this action. To the extent that post-termination analysis was conducted in anticipation of or in preparation for litigation, AMA asserts work product protection over such activities and their work product.
INTERROGATORY NO. 5
Identify the specific documents, files, or materials that AMA contends Plaintiff transmitted to Halcyon Creek Productions LLC, including the title, date of transmission, and method of transmission for each.
RESPONSE TO INTERROGATORY NO. 5:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
AMA has identified the following transmissions from Plaintiff's AMA corporate email account (galdrich@aureliusmedia.com) to info@halcyoncreekprod.com, an email address associated with Halcyon Creek Productions LLC:
AMA's investigation into whether additional proprietary materials were transmitted by Plaintiff to Halcyon Creek Productions LLC or other unauthorized recipients — including through methods other than AMA's corporate email system — is ongoing. AMA expressly reserves the right to supplement this response as its investigation continues and as additional information is obtained through discovery in this action.
INTERROGATORY NO. 6
Identify all persons at AMA who were aware of, authorized, or directed any communications between Plaintiff and Halcyon Creek Productions LLC or Nina Castellanos.
RESPONSE TO INTERROGATORY NO. 6:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
AMA is not aware of any AMA employee, officer, or agent who authorized, directed, or was aware of Plaintiff's communications with Halcyon Creek Productions LLC or Nina Castellanos during the period of the transmissions (approximately March 2022 through August 2022).
The transmissions identified in AMA's Response to Interrogatory No. 5 were not authorized by AMA. Under AMA's established policies and procedures, all external transmissions of development materials — including transmissions to potential co-production partners, networks, platforms, or other third parties — require prior written approval from the President of AMA or the Vice President of Business Affairs. No such approval was sought or obtained by Plaintiff with respect to any of the transmissions to Halcyon Creek Productions LLC.
The first AMA personnel to become aware of the transmissions to Halcyon Creek were members of AMA's IT security team and Gregory Tanaka, Vice President, Legal & Compliance, in connection with the DLP audit findings reported in approximately September through October 2022, as described in AMA's Response to Interrogatory No. 4.
INTERROGATORY NO. 7
Describe in detail the "Acceptable Use and Confidentiality Policy" referenced in AMA's Cross-Complaint, including: (a) the date of the version applicable to Plaintiff; (b) the manner in which the policy was communicated to Plaintiff; and (c) whether Plaintiff acknowledged receipt of the policy.
RESPONSE TO INTERROGATORY NO. 7:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
(a) Date of Applicable Version: The version of AMA's Acceptable Use and Confidentiality Policy applicable to Plaintiff was last revised in March 2021. This revision updated and superseded prior versions of the Policy.
(b) Manner of Communication: The Acceptable Use and Confidentiality Policy (March 2021 revision) was communicated to all AMA employees, including Plaintiff, through the following means: (i) distribution through AMA's internal human resources portal (accessible to all employees via the company intranet); (ii) email notification to all employees upon revision, informing employees of the updated Policy and directing them to review it; and (iii) an individual acknowledgment requirement, whereby each employee was required to sign a written acknowledgment confirming receipt, review, and understanding of the Policy.
(c) Plaintiff's Acknowledgment: Yes. Plaintiff signed a written acknowledgment of the Acceptable Use and Confidentiality Policy on April 12, 2021. The signed acknowledgment confirms that Plaintiff received, read, and understood the Policy, including the express prohibition on "transmitting, forwarding, or copying Company proprietary information, trade secrets, or confidential data to personal email accounts, personal cloud storage, or non-Company-approved third-party recipients." The acknowledgment form was signed by Plaintiff and retained in Plaintiff's personnel file maintained by AMA's Human Resources department.
A true and correct copy of Plaintiff's signed acknowledgment of the Acceptable Use and Confidentiality Policy is being produced in response to Plaintiff's concurrently served First Set of Requests for Production of Documents.
INTERROGATORY NO. 8
Identify each provision of the Employment Agreement or any AMA policy that Plaintiff allegedly violated, and for each provision, state the specific acts or omissions constituting the alleged violation.
RESPONSE TO INTERROGATORY NO. 8:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, and incorporating by reference AMA's Responses to Interrogatory Nos. 2 and 3, AMA responds as follows:
Employment Agreement § 9.4 (Confidentiality): Section 9.4 prohibits the "disclosure, use, or transmission of Confidential Information to any person or entity other than in the furtherance of Employee's duties to the Company." Plaintiff violated this provision by: (i) transmitting approximately 340 emails containing proprietary and confidential AMA information from his AMA corporate email account to his personal email account (galdrich.private@Northgate Software.com) between approximately July 2021 and September 2022; and (ii) transmitting show format bibles for "Apex Endurance," "The Remix," and "Untamed West," pilot sizzle reels for "Apex Endurance" and "The Remix," and the Summit Challenge revenue model to Halcyon Creek Productions LLC between approximately March 2022 and August 2022.
Employment Agreement § 9.1 (Non-Competition): AMA notes the existence of the non-competition provision in Section 9.1 of the Employment Agreement, which imposes a post-termination non-competition period of eighteen (18) months. AMA acknowledges that the enforceability of this provision under California law is subject to dispute. AMA does not seek injunctive relief or monetary damages based on enforcement of Section 9.1 as a standalone provision and references it solely as factual context for the overall restrictive covenant framework and AMA's trade secret protection efforts. This position is consistent with AMA's Amended Cross-Complaint filed April 5, 2023.
Employment Agreement § 9.2 (Non-Solicitation of Employees): AMA reserves the right to identify specific violations of Section 9.2 if evidence of post-termination solicitation of AMA employees by Plaintiff is discovered through ongoing investigation and discovery. AMA has not yet identified specific post-termination violations.
Employment Agreement § 9.3 (Non-Solicitation of Business Relationships): AMA reserves the same right as stated with respect to Section 9.2.
Acceptable Use and Confidentiality Policy (March 2021 Revision): The Policy expressly prohibits employees from "transmitting, forwarding, or copying Company proprietary information, trade secrets, or confidential data to personal email accounts, personal cloud storage, or non-Company-approved third-party recipients." Plaintiff violated this Policy by the same conduct described above with respect to Section 9.4 of the Employment Agreement — namely, the transmission of proprietary materials to his personal email account and to Halcyon Creek Productions LLC.
INTERROGATORY NO. 9
State whether AMA contends that the restructuring directive issued by Jonathan Mercer in October 2022 was a legitimate business decision, and if so, describe the business reasons for the directive.
RESPONSE TO INTERROGATORY NO. 9:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
Yes. AMA contends that the restructuring directive issued by Jonathan Mercer to Plaintiff in October 2022 was a legitimate business decision issued in the ordinary course of AMA's operations. The directive was consistent with strategic priorities communicated by the senior leadership of Aurelius Global Media Group ("AGMG"), AMA's parent company.
The business reasons for the restructuring directive were as follows: AMA experienced declining advertising revenues in the third quarter of 2022, consistent with broader industry trends affecting the unscripted/reality television segment. These revenue declines necessitated cost-efficiency measures across multiple divisions, including the Unscripted Programming Division led by Plaintiff. Specifically, the directive called for the consolidation of two underperforming show units within the Unscripted Programming Division and a reduction of divisional headcount by approximately fifteen percent (15%). These measures were designed to align the division's cost structure with its revised revenue projections while preserving the division's core programming capabilities.
The restructuring was not, as Plaintiff has alleged in his Complaint, an effort to misclassify employees or reduce overtime costs through improper means. The restructuring involved consolidation of show units and headcount reductions — standard organizational measures within the media industry — and did not involve the reclassification of any employee's exempt or non-exempt status.
INTERROGATORY NO. 10
Describe the written warning issued by Jonathan Mercer to Plaintiff on or about October 11, 2022, including the specific performance deficiencies or conduct identified and the cure period, if any, provided.
RESPONSE TO INTERROGATORY NO. 10:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
On October 11, 2022, AMA President Jonathan Mercer issued a formal written warning to Plaintiff via email. The written warning advised Plaintiff that his refusal to comply with a direct instruction from the President of the Company — specifically, the restructuring directive issued on October 10, 2022 — constituted a violation of AMA's policies and procedures and could result in further disciplinary action, up to and including termination of employment for cause. The warning expressly directed Plaintiff to comply with the restructuring directive and to refrain from further insubordinate conduct.
The written warning identified the following specific conduct: (i) Plaintiff's October 10, 2022 email to Mr. Mercer in which Plaintiff characterized the restructuring directive as "creatively bankrupt and commercially idiotic" and stated that he would "not participate in dismantling [his] division"; and (ii) Plaintiff's express refusal to implement the restructuring plan as directed.
Regarding the cure period: AMA acknowledges that Section 7.2(b)(iv) of the Employment Agreement provides for "a cure period of not less than fifteen (15) business days" for "willful failure to perform duties" after written notice. AMA further acknowledges that the period between the issuance of the written warning (October 11, 2022) and the termination of Plaintiff's employment (October 14, 2022) was three (3) calendar days, which is less than the fifteen (15) business-day cure period specified in Section 7.2(b)(iv).
However, AMA contends that the termination was not based solely on the insubordination under Section 7.2(b)(iv). Rather, the termination was based on the totality of the circumstances, including — and primarily — the independent and separately sufficient ground of the confidentiality violations under Sections 7.2(b)(i), 7.2(b)(ii), 7.2(b)(v), and 7.2(b)(vi), none of which require a cure period under the terms of the Employment Agreement. The DLP audit findings regarding the unauthorized transmissions to Plaintiff's personal email and to Halcyon Creek Productions LLC were presented to Mr. Mercer on October 13, 2022, and constituted the principal basis for the termination decision. The insubordination provided additional support for the "for cause" determination but was not the sole or even primary basis.
INTERROGATORY NO. 11
State whether AMA contends that the Employment Agreement is governed by New York law pursuant to § 14.3, and if so, state the factual and legal basis for that contention.
RESPONSE TO INTERROGATORY NO. 11:
Objections: AMA objects to this Interrogatory to the extent it calls for legal conclusions and the articulation of fully developed legal contentions before the completion of discovery and briefing. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows:
Section 14.3 of the Employment Agreement provides: "This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles."
AMA contends that the parties voluntarily agreed to the New York choice-of-law provision in a negotiated Employment Agreement. The Employment Agreement was the product of arm's-length negotiation between Plaintiff — who was at all relevant times represented by independent legal counsel — and AGMG and AMA. New York has a substantial relationship to the parties and the transaction, as AGMG, AMA's parent company, maintains its principal corporate offices in New York, and the Employment Agreement was drafted by AGMG's New York-based outside employment counsel.
AMA acknowledges that the enforceability of the New York choice-of-law clause as applied to the restrictive covenant provisions (particularly Section 9.1, the non-competition clause) is subject to challenge under California's conflict of laws framework. Specifically, AMA is aware of the analysis under Restatement (Second) of Conflict of Laws section 187(2), which permits a court to disregard a contractual choice-of-law provision where application of the chosen state's law would be contrary to a fundamental policy of a state that has a materially greater interest in the determination of the issue. California's fundamental public policy against non-competition agreements, as expressed in California Business and Professions Code section 16600 and as interpreted in Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937, may be implicated by this analysis.
AMA's position on the choice-of-law issue is more fully set forth in its legal contentions and will be developed through motion practice and briefing at the appropriate stage of this litigation. AMA reserves the right to supplement this response as its legal position is further developed.
INTERROGATORY NO. 12
For each of the restrictive covenant provisions in § 9 of the Employment Agreement (§§ 9.1, 9.2, 9.3, and 9.4), state whether AMA contends the provision is enforceable, and if so, state the legal basis for enforceability.
RESPONSE TO INTERROGATORY NO. 12:
Objections: AMA objects to this Interrogatory on the ground that it calls for legal conclusions regarding the enforceability of contractual provisions, which is a question of law to be determined by the Court. AMA further objects to this Interrogatory as premature to the extent it seeks AMA's fully developed legal contentions before the completion of fact discovery and the opportunity for dispositive briefing. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows:
Section 9.1 — Non-Competition (18-month post-termination period): AMA acknowledges that the enforceability of the non-competition clause under California law is subject to serious challenge under California Business and Professions Code section 16600 and the California Supreme Court's decision in Edwards v. Kraft Quill CPAs LLP (2008) 44 Cal.4th 937, which held that Section 16600 prohibits non-competition agreements except in limited statutory exceptions not applicable here. AMA does not seek injunctive relief or monetary damages based on enforcement of Section 9.1 as a standalone provision in this action. AMA references Section 9.1 solely as factual context for the broader restrictive covenant framework and AMA's efforts to protect its trade secrets and confidential information. This position is consistent with AMA's Amended Cross-Complaint filed April 5, 2023.
Section 9.2 — Non-Solicitation of Employees (24-month post-termination period): AMA contends that Section 9.2 is enforceable under California law. Employee non-solicitation clauses have generally been upheld by California courts as not running afoul of Section 16600. See Loral Corp. v. Moyes (1985) 174 Cal.App.3d 268. AMA contends that employee non-solicitation provisions are narrowly tailored protections of an employer's legitimate business interest in the stability of its workforce and do not constitute restraints on trade within the meaning of Section 16600. AMA acknowledges that the continued viability of Loral in the wake of Edwards has been the subject of academic and judicial commentary, but contends that Loral remains good law.
Section 9.3 — Non-Solicitation of Business Relationships (24-month post-termination period): AMA contends that Section 9.3 is enforceable under California law, though AMA acknowledges that the scope and enforceability of customer and client non-solicitation clauses under California law is subject to greater uncertainty than employee non-solicitation clauses. AMA contends that Section 9.3 is a narrow, reasonable restriction that protects AMA's legitimate business relationships and goodwill without imposing a broad restraint on Plaintiff's ability to engage in his profession.
Section 9.4 — Confidentiality (indefinite duration): AMA contends that Section 9.4 is fully enforceable under California law. Confidentiality obligations are legally and conceptually distinct from non-compete provisions and are generally enforceable under California law. The obligation not to disclose, misappropriate, or misuse an employer's confidential information and trade secrets is well-established and does not implicate the policy concerns underlying Section 16600. Additionally, AMA's trade secrets — including the show format bibles, sizzle reels, and financial models at issue in this case — are independently protectable under the California Uniform Trade Secrets Act, California Civil Code section 3426 et seq.
INTERROGATORY NO. 13
State whether Plaintiff was provided with any severance or separation payment upon termination, and if not, state the reason.
RESPONSE TO INTERROGATORY NO. 13:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
No. Plaintiff was not provided with any severance payment, separation payment, or other post-termination compensation upon his termination on October 14, 2022. The reason is that Plaintiff's termination was designated as "for cause" under Section 7.2(b) of the Employment Agreement.
Under Section 7.3 of the Employment Agreement, severance benefits — specifically, twenty-four (24) months of base salary continuation, a pro-rata bonus for the fiscal year in which termination occurs, and a COBRA health insurance premium subsidy — are payable only upon a termination "without cause" as defined in Section 7.2(a) of the Employment Agreement. A "for cause" termination under Section 7.2(b) does not trigger any severance obligation or entitle the employee to any post-termination compensation beyond accrued and unpaid base salary and accrued but unused vacation time through the date of termination. AMA paid Plaintiff all accrued and unpaid base salary and accrued vacation time through October 14, 2022, in accordance with California's final pay requirements under Labor Code sections 201 and 202.
INTERROGATORY NO. 14
State the status of Plaintiff's restricted stock units ("RSUs") at the time of termination, including the total number granted, the number vested, the number unvested, and AMA's contention regarding the treatment of unvested RSUs.
RESPONSE TO INTERROGATORY NO. 14:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
During the course of his employment, Plaintiff was granted a total of 42,500 restricted stock units ("RSUs") in Aurelius Global Media Group plc ("AGMG"), AMA's parent company, pursuant to the AGMG Restricted Stock Unit Plan and individual RSU award agreements.
At the time of Plaintiff's termination on October 14, 2022, a total of 27,200 RSUs had vested in accordance with the applicable vesting schedule, and 15,300 RSUs remained unvested.
Under the terms of the AGMG Restricted Stock Unit Plan and the applicable individual award agreements, unvested RSUs are automatically forfeited upon a termination of employment for cause. AMA contends that because Plaintiff was terminated "for cause" within the meaning of Section 7.2(b) of the Employment Agreement, the 15,300 unvested RSUs were properly forfeited upon the effective date of Plaintiff's termination, in accordance with the RSU plan terms.
The estimated value of the 15,300 forfeited unvested RSUs at the time of termination was approximately £287,625 (approximately $332,200 USD), based on the AGMG share price of approximately £18.79 per share as of October 14, 2022, and an exchange rate of approximately $1.155 per £1.00. AMA notes that this valuation is approximate and based on publicly available market data. AMA does not concede that Plaintiff is entitled to the value of the forfeited RSUs.
INTERROGATORY NO. 15
Identify all documents, communications, or evidence that AMA contends support the "for cause" determination.
RESPONSE TO INTERROGATORY NO. 15:
Objections: AMA objects to this Interrogatory as overbroad to the extent it seeks identification of "all" documents, communications, or evidence supporting the "for cause" determination, as AMA's investigation and discovery are ongoing and not all potentially relevant evidence has been identified. AMA will identify key categories of evidence and specific documents but reserves the right to supplement this response as discovery continues and additional evidence is identified. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows:
The key categories of documents, communications, and evidence that AMA contends support the "for cause" determination include, without limitation, the following:
1. The Employment Agreement dated September 5, 2017, and the First Amendment thereto dated August 1, 2020 (including, without limitation, Sections 7.2(b), 9.1, 9.2, 9.3, 9.4, and 14.3).
2. AMA's Acceptable Use and Confidentiality Policy (March 2021 revision).
3. Plaintiff's signed acknowledgment of the Acceptable Use and Confidentiality Policy, dated April 12, 2021.
4. The DLP audit report and findings generated by AMA's internal IT security team, including the preliminary findings reported in approximately September 2022 and the detailed forensic review completed in approximately October 2022.
5. The forensic review of Plaintiff's AMA-issued laptop, including analysis of email forwarding activity, file access history, and external transmission logs.
6. Email transmission logs showing approximately 340 emails forwarded from Plaintiff's AMA corporate email account (galdrich@aureliusmedia.com) to Plaintiff's personal email account (galdrich.private@Northgate Software.com) between approximately July 12, 2021 and September 29, 2022.
7. Email transmission logs showing seven (7) emails transmitted from Plaintiff's AMA corporate email account to info@halcyoncreekprod.com between approximately March 3, 2022 and August 18, 2022.
8. The three show format bibles for "Apex Endurance," "The Remix," and "Untamed West."
9. The Summit Challenge revenue model (Excel spreadsheet).
10. The pilot sizzle reels for "Apex Endurance" and "The Remix," transmitted via Larkspur Technologies links from Plaintiff's personal Larkspur Technologies account.
11. Jonathan Mercer's restructuring directive email to Plaintiff (October 10, 2022).
12. Plaintiff's refusal email to Jonathan Mercer, dated October 10, 2022, containing the statements "creatively bankrupt and commercially idiotic" and "not participate in dismantling [his] division."
13. Plaintiff's email to six subordinates, dated October 11, 2022, forwarding the restructuring email chain with the comment "For your awareness — the London suits are gutting our operation."
14. Jonathan Mercer's formal written warning to Plaintiff, dated October 11, 2022.
15. Halcyon Creek Productions LLC formation records filed with the California Secretary of State on February 14, 2022, listing Nina Castellanos as registered agent.
16. Plaintiff's personnel file maintained by AMA's Human Resources department.
17. Declarations of Jonathan Mercer and Dwayne Prescott filed in support of AMA's Cross-Complaint on January 18, 2023.
18. Additional documents responsive to Plaintiff's First Set of Requests for Production of Documents, which are being produced concurrently with these Interrogatory responses.
AMA reserves the right to identify and rely upon additional documents, communications, and evidence as they are identified through ongoing investigation and discovery.
INTERROGATORY NO. 16
Describe the nature and scope of AMA's relationship with NovaPay Solutions Inc. and state whether NovaPay conducted or participated in the DLP audit.
RESPONSE TO INTERROGATORY NO. 16:
Objections: AMA incorporates by reference its General Objections.
Response: Subject to and without waiving the General Objections, AMA responds as follows:
NovaPay Solutions Inc. ("NovaPay"), headquartered at 2200 Powell Street, Suite 600, Emeryville, California 94608, is AMA's payroll processor and electronic timekeeping system provider. AMA has utilized NovaPay's services since approximately January 1, 2019, pursuant to a master services agreement between the parties.
NovaPay provides the "TimeTrack Pro" electronic timekeeping system used by AMA for its non-exempt, hourly employees in California. NovaPay also processes payroll for AMA's California-based employees, including computation of wages, tax withholding, and issuance of paychecks and direct deposits.
NovaPay did not conduct or participate in the DLP audit referenced in AMA's Cross-Complaint. The DLP audit was conducted entirely by AMA's internal IT security team. NovaPay's systems and data were not involved in the DLP audit, which focused exclusively on AMA's corporate email system (Strathmore Data Systems/Ashbury Software) and Plaintiff's AMA-issued laptop. NovaPay does not have access to AMA's corporate email system or to AMA employee devices.
NovaPay is a relevant third party in the related class action, Fuentes v. Aurelius Media Americas Inc., Case No. 22STCV38214 (the "Fuentes Action"), which concerns allegations relating to AMA's timekeeping and payroll practices for non-exempt employees. NovaPay is not a party to the instant Aldrich individual action, except to the extent that NovaPay's payroll data may be relevant to Plaintiff's expense reimbursement claim asserted in the Third Cause of Action of Plaintiff's Complaint.
INTERROGATORY NO. 17
Identify the person(s) who conducted the forensic analysis of Plaintiff's AMA-issued laptop, and describe the scope and methodology of the analysis.
RESPONSE TO INTERROGATORY NO. 17:
Objections: AMA objects to this Interrogatory to the extent the forensic analysis was conducted at the direction of, or in consultation with, legal counsel, as the identity of persons involved in such analysis and the methodology employed may implicate the attorney-client privilege and/or the work product doctrine. AMA further objects to this Interrogatory to the extent it seeks the disclosure of the specific technical methodology used in the forensic analysis, as such methodology may constitute attorney work product to the extent it was developed or refined in anticipation of litigation. AMA also incorporates by reference its General Objections.
Response: Subject to and without waiving the foregoing objections and the General Objections, AMA responds as follows: