filed-answer-aldrich.docx

1017-00004 · Entities. Aurelius Global Media Group · Pleadings/Aldrich

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RENATA VASQUEZ (SBN 224578) DEVON ARCHER (SBN 301462) CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201

Email: rvasquez@calderwoodharkness.com

Email: darcher@calderwoodharkness.com

Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES — CENTRAL DISTRICT

DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT

I. INTRODUCTION

Defendant Aurelius Media Americas Inc. ("AMA" or "Defendant"), a Delaware corporation, by and through its attorneys of record, Calderwood & Harkness LLP, hereby answers the Complaint of Plaintiff Gavin Aldrich ("Plaintiff" or "Aldrich"), filed on December 9, 2022, in the above-captioned action. AMA responds to each and every allegation in the Complaint as set forth below. To the extent that any allegation in the Complaint is not expressly admitted herein, it is denied. AMA further asserts the affirmative defenses set forth in Section IV below.

II. GENERAL DENIAL

Pursuant to California Code of Civil Procedure Section 431.30(d), Defendant generally denies each and every allegation contained in the Complaint and denies that Plaintiff has been damaged in any amount whatsoever, or is entitled to any relief of any kind, whether compensatory, consequential, special, general, punitive, or otherwise. Without waiving or limiting the foregoing general denial, and in the interest of clarity and completeness, Defendant specifically responds to certain key allegations of the Complaint as set forth below.

III. SPECIFIC RESPONSES TO KEY ALLEGATIONS

A. Paragraphs 1 Through 10 (Background and Employment)

1. Responding to Paragraphs 1 through 10 of the Complaint, AMA admits that Plaintiff Gavin Aldrich was employed by AMA from approximately September 5, 2017 through October 14, 2022.

2. AMA admits that, at the time of his termination, Aldrich held the title of Senior Vice President of Original Content & Executive Producer within AMA's Unscripted Programming Division.

3. AMA admits that the parties entered into a written Employment Agreement dated September 5, 2017 (the "Employment Agreement"), and that the Employment Agreement was subsequently amended by the First Amendment to Employment Agreement dated August 1, 2020 (the "First Amendment"). AMA avers that the Employment Agreement and the First Amendment speak for themselves and are the best evidence of their terms, and AMA denies any characterization of those documents that is inconsistent with their actual language.

4. AMA admits that Aldrich's annual base salary at the time of his termination was Four Hundred Eighty-Five Thousand Dollars ($485,000) per year, as set forth in the First Amendment.

5. AMA admits that Aldrich received a discretionary annual bonus for fiscal year 2021 in the amount of Two Hundred Twenty-Five Thousand Dollars ($225,000). AMA avers that such bonus was discretionary in nature, as expressly provided in Section 4.2 of the Employment Agreement, and that the payment of any bonus in a prior fiscal year did not create any entitlement to a bonus in any subsequent fiscal year.

6. AMA admits that, pursuant to the terms of a Restricted Stock Unit Award Agreement between Aldrich and Aurelius Global Media Group, Inc. ("AGMG"), AMA's parent corporation, Aldrich was granted 42,500 AGMG restricted stock units ("RSUs"), subject to the vesting schedule and other terms and conditions set forth in the RSU Award Agreement and the AGMG 2016 Omnibus Equity Incentive Plan (the "Plan"). AMA further admits that approximately 15,300 RSUs remained unvested at the time of Aldrich's termination on October 14, 2022.

7. Except as expressly admitted herein, AMA denies each and every remaining allegation in Paragraphs 1 through 10 of the Complaint to the extent such allegations are inconsistent with the terms of the Employment Agreement dated September 5, 2017, as amended by the First Amendment dated August 1, 2020, or are otherwise inaccurate, misleading, or incomplete. AMA avers that the Employment Agreement and First Amendment are integrated written instruments and that their terms cannot be varied, supplemented, or contradicted by Plaintiff's characterizations in the Complaint.

B. Paragraphs 11 Through 18 (Termination)

8. Responding to Paragraphs 11 through 18 of the Complaint, AMA admits that it terminated Aldrich's employment on October 14, 2022.

9. AMA admits that the termination was designated as a termination "for cause" under Section 7.2(b) of the Employment Agreement. AMA avers that Section 7.2(b) sets forth the definition of "Cause" as that term is used in the Employment Agreement, and that the Employment Agreement speaks for itself with respect to the grounds constituting "Cause."

10. AMA denies that the "for cause" designation was pretextual, retaliatory, or otherwise improper. AMA denies that the termination was motivated by any unlawful purpose, discriminatory animus, or retaliatory intent. AMA denies that the termination was designed to deprive Aldrich of any compensation, benefits, or contractual entitlements to which he would otherwise have been entitled.

11. AMA affirmatively alleges that the termination of Aldrich's employment "for cause" was based on two independent grounds, each of which independently constitutes "Cause" within the meaning of Section 7.2(b) of the Employment Agreement:

(i) Violation of AMA's Acceptable Use and Confidentiality Policy and Breach of Section 9.4 of the Employment Agreement (Confidentiality). Between approximately July 2021 and September 2022, Aldrich transmitted approximately 340 emails containing proprietary and confidential AMA information — including, without limitation, show concepts, audience analytics and viewership data, revenue projections, internal programming strategy memoranda, and talent deal terms and compensation structures — from his AMA corporate email account (galdrich@aureliusmedia.com) to his personal email account (galdrich.private@Northgate Software.com), in violation of AMA's Acceptable Use and Confidentiality Policy (revised January 2020) and in material breach of Section 9.4 of the Employment Agreement. Additionally, and of particular significance, Aldrich transmitted three complete unscripted show format bibles (for concepts titled "Apex Endurance," "The Remix," and "Untamed West"), two pilot sizzle reels, and a detailed revenue model for AMA's "Summit Challenge" franchise to an email address associated with Halcyon Creek Productions LLC (info@halcyoncreekprod.com), a California-based production company operating in the unscripted/reality television space. These transmissions were unauthorized by AMA, were not made in furtherance of any legitimate AMA business purpose, and constituted a material breach of the Employment Agreement and a material violation of AMA's written policies. The "Summit Challenge" franchise is one of AMA's most commercially valuable properties, and the unauthorized dissemination of its revenue model to a competing production company posed a direct and substantial threat to AMA's competitive position and business interests.

(ii) Insubordination. In October 2022, Aldrich refused to comply with a direct and lawful instruction from AMA President Jonathan Mercer regarding the restructuring of the Unscripted Programming Division. Specifically, on or about October 7, 2022, Mercer issued a written directive to Aldrich regarding the consolidation of certain production teams and the reallocation of budgetary resources within the Unscripted Programming Division. Rather than comply with this directive or raise his objections through appropriate internal channels, Aldrich responded to Mercer in writing, characterizing the directive as "creatively bankrupt and commercially idiotic," and subsequently disseminated his written refusal and disparaging characterization to multiple subordinates within the Unscripted Programming Division in a manner calculated to undermine the chain of command and to foment opposition to a legitimate management decision. This conduct constituted insubordination and a material breach of Aldrich's obligations under the Employment Agreement, including his duty of loyalty to AMA as a senior officer of the company.

12. AMA specifically denies Aldrich's allegation that the restructuring directive issued by President Jonathan Mercer was an effort to misclassify employees or to reduce overtime costs through improper or unlawful means. The restructuring was a legitimate cost-efficiency measure necessitated by declining advertising revenues affecting AMA and the broader media industry, and was consistent with AMA's authority to manage its business operations as it deemed appropriate. The restructuring directive was reviewed and approved by AMA's General Counsel and Human Resources Department prior to its issuance.

13. AMA denies Aldrich's characterization of the circumstances of his termination as set forth in Paragraphs 11 through 18 of the Complaint. AMA denies all allegations of wrongful motive, pretext, retaliation, or bad faith in connection with the termination.

C. Paragraphs 19 Through 26 (Restrictive Covenant Provisions)

14. Responding to Paragraphs 19 through 26 of the Complaint, AMA admits that Section 9 of the Employment Agreement contains restrictive covenant provisions, including the following:

(a) Section 9.1 — Non-Competition. Section 9.1 provides that, for a period of eighteen (18) months following the termination of Aldrich's employment (for any reason), Aldrich shall not, directly or indirectly, engage in, be employed by, provide consulting or advisory services to, or have any ownership interest in (except for passive ownership of not more than two percent (2%) of the outstanding equity securities of a publicly traded company) 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, licensing, or distribution of unscripted/reality television content in North America.

(b) Section 9.2 — Non-Solicitation of Employees. Section 9.2 provides that, for a period of twenty-four (24) months following the termination of Aldrich's employment, Aldrich shall not, directly or indirectly, solicit, recruit, hire, or induce, or attempt to solicit, recruit, hire, or induce, any employee of AMA or any of its affiliates to leave the employ of AMA or any of its affiliates, or to accept employment with any other person or entity.

(c) Section 9.3 — Non-Solicitation of Business Relationships. Section 9.3 provides that, for a period of twenty-four (24) months following the termination of Aldrich's employment, Aldrich shall not, directly or indirectly, solicit, divert, or appropriate, or attempt to solicit, divert, or appropriate, any business, client, customer, talent, vendor, or business relationship of AMA or any of its affiliates for the benefit of any person or entity other than AMA.

(d) Section 9.4 — Confidentiality. Section 9.4 provides that Aldrich shall not, at any time during or after his employment with AMA, disclose, use, copy, transfer, or disseminate any Confidential Information (as defined in Section 9.4(a) of the Employment Agreement) for any purpose other than the performance of his duties on behalf of AMA. The confidentiality obligation is indefinite in duration and covers, among other things, proprietary content, show formats and format bibles, revenue data, financial projections, audience analytics, programming strategy, and talent agreements and compensation terms.

15. AMA denies Aldrich's allegations that any of the restrictive covenant provisions set forth in Section 9 of the Employment Agreement are void, unenforceable, unconscionable, or otherwise invalid.

16. AMA affirmatively alleges that the restrictive covenant provisions contained in Section 9 of the Employment Agreement are reasonable in scope, duration, and geographic reach, are narrowly tailored to protect AMA's legitimate business interests — including its trade secrets, confidential information, client and talent relationships, and competitive position — and are supported by adequate consideration, including Aldrich's initial employment, his promotion to Senior Vice President, and the enhanced compensation and RSU grants provided under the First Amendment.

17. AMA affirmatively alleges that the Employment Agreement is governed by New York law pursuant to the choice-of-law clause set forth in Section 14.3 of the Employment Agreement, which provides in relevant part: "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 avers that this choice-of-law provision was negotiated at arm's length between the parties, that AMA is headquartered in New York, that the Employment Agreement was executed in New York, and that the parties had a substantial and reasonable basis for selecting New York law to govern the Employment Agreement.

18. AMA denies Aldrich's contention that California Business and Professions Code Section 16600 renders all restrictive covenant provisions in the Employment Agreement void or unenforceable. AMA contends that the contractual choice of New York law is valid and enforceable, and that under New York law, the restrictive covenant provisions are reasonable and enforceable. AMA further contends that, even if California law were to apply to certain provisions, the confidentiality provision (Section 9.4) is enforceable under California law, and that the remaining provisions are severable and enforceable to the extent permitted by applicable law.

D. Paragraphs 27 Through 32 (Severance and RSUs)

19. Responding to Paragraphs 27 through 32 of the Complaint, AMA admits that Section 7.3 of the Employment Agreement provides for certain severance benefits in the event of a termination "without cause," including: (a) severance pay equal to twenty-four (24) months of base salary (i.e., Nine Hundred Seventy Thousand Dollars ($970,000)); (b) a pro-rata bonus for the fiscal year in which the termination occurs, based on actual performance; and (c) an eighteen (18) month subsidy of premiums for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). AMA avers that Section 7.3 speaks for itself and is the best evidence of its terms.

20. AMA denies that Aldrich is entitled to any severance compensation, pro-rata bonus, COBRA subsidy, or any other benefits under Section 7.3 of the Employment Agreement, because Aldrich was terminated "for cause" under Section 7.2(b) of the Employment Agreement. Section 7.2(b) expressly provides that, upon a termination for Cause, the Employee shall be entitled only to accrued and unpaid base salary through the date of termination, and shall not be entitled to any severance, bonus, or other post-termination benefits.

21. AMA denies that the approximately 15,300 unvested RSUs held by Aldrich at the time of his termination are subject to accelerated vesting. Under the express terms of the RSU Award Agreement dated September 5, 2017 (as modified by the grant adjustment memorandum dated August 1, 2020) and the AGMG 2016 Omnibus Equity Incentive Plan, all unvested RSUs are immediately and automatically forfeited upon a termination of employment for "Cause" (as defined in the Plan, which incorporates the definition of "Cause" set forth in the Employment Agreement). AMA avers that the RSU Award Agreement and the Plan are the best evidence of their terms and that Aldrich's characterization of his RSU entitlements in the Complaint is inaccurate and contrary to the governing documents.

E. Paragraphs 33 Through 38 (Expense Reimbursement)

22. Responding to Paragraphs 33 through 38 of the Complaint, AMA is without sufficient information or belief to admit or deny Aldrich's allegation that AMA failed to reimburse him for approximately Twenty-Eight Thousand Four Hundred Dollars ($28,400) in business expenses allegedly incurred in connection with his duties at AMA. AMA avers that it has not yet had the opportunity to conduct a full review of Aldrich's expense reimbursement records and supporting documentation, and therefore treats these allegations as denied, pursuant to California Code of Civil Procedure Section 431.30(d). AMA will investigate this claim through the discovery process and reserves the right to amend this response upon completion of its investigation.

23. AMA denies that any failure to reimburse business expenses, if such failure is established, was willful, knowing, or intentional, or that any such failure constituted a violation of California Labor Code Section 2802 or any other applicable statute. AMA further denies that any failure to reimburse, if established, entitles Aldrich to penalties, interest, or attorneys' fees under any provision of the California Labor Code.

F. Paragraphs 39 Through 45 (Damages)

24. Responding to Paragraphs 39 through 45 of the Complaint, AMA denies that Aldrich has suffered any damages as a result of his termination or as a result of any act or omission by AMA.

25. AMA denies that Aldrich is entitled to any relief whatsoever, whether compensatory, consequential, incidental, special, general, emotional distress, punitive, exemplary, or otherwise.

26. AMA specifically denies that Aldrich is entitled to his claimed aggregate demand of Four Million One Hundred Fifty Thousand Dollars ($4,150,000), or any portion thereof. AMA avers that Aldrich's damages claims are speculative, unsupported, and excessive, and that Aldrich has failed to establish any cognizable basis for the relief he seeks.

IV. AFFIRMATIVE DEFENSES

Without assuming the burden of proof on any issue as to which Defendant would not otherwise bear such burden under applicable law, and without waiving any objections, defenses, or rights that Defendant may have or may hereafter assert, Defendant Aurelius Media Americas Inc. asserts the following affirmative defenses to the Complaint:

FIRST AFFIRMATIVE DEFENSE

(Failure to State a Claim)

The Complaint, and each and every cause of action alleged therein, fails to state facts sufficient to constitute a cause of action against Defendant Aurelius Media Americas Inc. Plaintiff's allegations, even if taken as true, do not establish the elements of any of the causes of action asserted in the Complaint, and each cause of action is therefore subject to dismissal.

SECOND AFFIRMATIVE DEFENSE

("For Cause" Termination)

Aldrich's claims for breach of contract, wrongful termination, and all related claims arising from or connected with the termination of his employment are barred, in whole or in part, because AMA terminated Aldrich "for cause" within the meaning of Section 7.2(b) of the Employment Agreement. The "for cause" determination was based on documented and substantiated policy violations, including the unauthorized transmission of approximately 340 emails containing confidential and proprietary AMA information from Aldrich's corporate email account to his personal email account, and the unauthorized transmission of three unscripted show format bibles, two pilot sizzle reels, and a detailed revenue model for the "Summit Challenge" franchise to an email address associated with Halcyon Creek Productions LLC (info@halcyoncreekprod.com), a competing production company, in violation of Section 9.4 of the Employment Agreement and AMA's Acceptable Use and Confidentiality Policy (revised January 2020). These acts constituted a material breach of the Employment Agreement. Accordingly, Aldrich is not entitled to severance, pro-rata bonus, COBRA subsidy, accelerated RSU vesting, or any other post-termination benefits under the Employment Agreement.

THIRD AFFIRMATIVE DEFENSE

(Unclean Hands)

Aldrich's claims are barred, in whole or in part, by the equitable doctrine of unclean hands. Aldrich engaged in material breaches of his Employment Agreement and his fiduciary duties as a senior officer of AMA. Specifically, Aldrich systematically transmitted proprietary and confidential AMA materials — including complete show format bibles for "Apex Endurance," "The Remix," and "Untamed West," two pilot sizzle reels, and a detailed revenue model for AMA's "Summit Challenge" franchise — to Halcyon Creek Productions LLC, a California-based production company operating in the unscripted/reality television space. The "Summit Challenge" franchise is one of AMA's most commercially valuable properties, generating approximately Forty-Two Million Dollars ($42,000,000) in annual revenue, and the unauthorized dissemination of its revenue model to a competitor constituted a grave breach of Aldrich's obligations of loyalty and confidentiality. Aldrich's own inequitable conduct directly relates to the subject matter of this litigation and bars him from obtaining equitable or legal relief.

FOURTH AFFIRMATIVE DEFENSE

(Waiver and Estoppel)

Aldrich's claims regarding the enforceability of the restrictive covenant provisions in Section 9 of the Employment Agreement are barred, in whole or in part, by the doctrines of waiver and estoppel. Aldrich voluntarily entered into the Employment Agreement on September 5, 2017, and voluntarily entered into the First Amendment to the Employment Agreement on August 1, 2020, with full knowledge of the restrictive covenant provisions contained in Section 9, including the non-competition provision (Section 9.1), the non-solicitation of employees provision (Section 9.2), the non-solicitation of business relationships provision (Section 9.3), and the confidentiality provision (Section 9.4). Aldrich was represented by independent legal counsel in connection with the negotiation and execution of the First Amendment dated August 1, 2020, and accepted the restrictive covenant provisions as a material term and condition of his continued employment with AMA and his promotion to the position of Senior Vice President of Original Content & Executive Producer. Aldrich received substantial consideration for the restrictive covenant provisions, including his promotion, a significant increase in base salary, enhanced bonus eligibility, and the grant of additional RSUs. Having voluntarily agreed to these provisions, received the benefit of substantial consideration therefor, and performed under the Employment Agreement for more than five years, Aldrich is estopped from challenging the enforceability of the restrictive covenant provisions.

FIFTH AFFIRMATIVE DEFENSE

(Failure to Mitigate Damages)

To the extent Aldrich asserts claims for lost compensation, lost benefits, future economic loss, or any other form of economic damages, his claims are barred or reduced, in whole or in part, by his failure to exercise reasonable diligence in mitigating his damages by seeking and obtaining comparable employment or other gainful engagement in the media industry or otherwise. Aldrich is an experienced senior executive in the media and entertainment industry and has not demonstrated that he took reasonable steps to mitigate the damages he alleges.

SIXTH AFFIRMATIVE DEFENSE

(Setoff and Recoupment)

Any damages, compensation, or other monetary relief to which Aldrich may be found entitled, if any, are subject to setoff and recoupment based on AMA's affirmative claims against Aldrich. AMA has sustained substantial damages as a direct and proximate result of Aldrich's wrongful conduct, including but not limited to: (a) breach of the Employment Agreement, specifically Sections 9.1, 9.2, 9.3, and 9.4 thereof; (b) misappropriation of trade secrets in violation of the California Uniform Trade Secrets Act, California Civil Code Section 3426 et seq.; (c) breach of fiduciary duty owed to AMA as a senior officer; and (d) conversion of proprietary digital files, including show format bibles, pilot sizzle reels, and the "Summit Challenge" revenue model. AMA's affirmative claims against Aldrich are asserted in a separately filed Cross-Complaint, which has been filed concurrently herewith and is incorporated herein by this reference for purposes of setoff and recoupment.

SEVENTH AFFIRMATIVE DEFENSE

(Statute of Limitations)

Aldrich's claims, and each cause of action alleged in the Complaint, are barred, in whole or in part, by the applicable statutes of limitations, including but not limited to California Code of Civil Procedure Sections 335.1, 337, 338, 339, and 340, and any other applicable limitations periods under California or New York law. To the extent any of Aldrich's claims are based on acts or omissions occurring outside the applicable limitations period, such claims are time-barred.

EIGHTH AFFIRMATIVE DEFENSE

(Comparative Fault / Contributory Conduct)

Aldrich's own conduct contributed to and was a proximate cause of his termination and any alleged damages. Specifically, Aldrich's unauthorized transmission of confidential and proprietary AMA information to his personal email account and to Halcyon Creek Productions LLC, and his insubordination with respect to the restructuring directive issued by AMA President Jonathan Mercer, constituted the direct cause of his termination "for cause." Any damages to which Aldrich may be found entitled are barred or reduced by his own fault, misconduct, and breach of the Employment Agreement, in proportion to the degree to which his own conduct contributed to his alleged injuries.

NINTH AFFIRMATIVE DEFENSE

(Choice of Law — New York)

The Employment Agreement is governed by New York law pursuant to the choice-of-law provision set forth in Section 14.3 of the Employment Agreement. To the extent Aldrich relies on California statutory or common law — including, without limitation, California Business and Professions Code Section 16600, California Labor Code Section 2802, or any other provision of California law — to challenge the enforceability of the restrictive covenant provisions or to assert claims that are governed by the terms of the Employment Agreement, AMA contends that New York law governs the interpretation and enforcement of the Employment Agreement, including the restrictive covenant provisions contained in Section 9. Under New York law, the restrictive covenant provisions are reasonable in scope, duration, and geographic reach, are supported by legitimate business interests, and are fully enforceable. The contractual selection of New York law was made by sophisticated parties represented by counsel, was negotiated at arm's length, and bears a reasonable relationship to the parties and the transaction.

TENTH AFFIRMATIVE DEFENSE

(No Wrongful Termination in Violation of Public Policy)

Aldrich's claim for wrongful termination in violation of public policy fails as a matter of law and fact. Aldrich's termination was not motivated by any consideration that contravenes a fundamental public policy of the State of California or any other jurisdiction. Aldrich was terminated for legitimate, well-documented business reasons — specifically, his material breach of confidentiality obligations and his insubordination — and not in retaliation for any protected activity, whistleblowing, or the exercise of any statutory or constitutional right. Aldrich's internal objection to a legitimate restructuring directive issued by AMA management does not constitute "protected activity" within the meaning of the Tameny v. Tarrant Holdings (1980) 27 Cal.3d 167 doctrine, or under any other applicable public policy recognized by California courts. AMA was well within its rights as an employer to terminate an at-will senior executive who materially breached his contractual obligations and engaged in insubordinate conduct that undermined management authority and the orderly operation of the business.

ELEVENTH AFFIRMATIVE DEFENSE

(No Breach of Implied Covenant of Good Faith and Fair Dealing)

AMA did not breach the implied covenant of good faith and fair dealing with respect to the Employment Agreement or any other agreement with Aldrich. AMA's designation of Aldrich's termination as "for cause" under Section 7.2(b) of the Employment Agreement was made in good faith, was supported by an objective and documented factual basis — including the results of an internal investigation conducted by AMA's Information Security and Legal departments, which confirmed the unauthorized email transmissions — and was consistent with the terms and provisions of the Employment Agreement. AMA did not act to deprive Aldrich of the benefits of the Employment Agreement through bad faith, unfair dealing, or any other improper conduct. AMA exercised its contractual rights in a manner that was objectively reasonable and consistent with the reasonable expectations of the parties as expressed in the Employment Agreement.

TWELFTH AFFIRMATIVE DEFENSE

(Reservation of Rights)

Defendant reserves the right to assert additional affirmative defenses, and to amend this Answer to add such defenses, as they become known through the course of discovery, further factual investigation, or legal research. This reservation is made without waiver of any existing defenses or rights.

V. PRAYER FOR RELIEF

WHEREFORE, Defendant Aurelius Media Americas Inc. prays for judgment as follows:

1. That Plaintiff Gavin Aldrich take nothing by his Complaint, and that each and every cause of action alleged therein be denied in its entirety;

2. That each and every cause of action in the Complaint be dismissed with prejudice;

3. That Defendant Aurelius Media Americas Inc. recover its costs of suit incurred herein, including but not limited to filing fees, service costs, deposition costs, and all other costs recoverable under California Code of Civil Procedure Section 1032 and applicable law;

4. That Defendant Aurelius Media Americas Inc. recover its reasonable attorneys' fees incurred in the defense of this action, to the extent permitted by applicable law, contract, or statute, including but not limited to the attorneys' fees provision set forth in Section 14.7 of the Employment Agreement;

5. For such other and further relief as the Court deems just and proper.

VI. CROSS-REFERENCE TO CROSS-COMPLAINT

AMA has filed a separate Cross-Complaint against Gavin Aldrich concurrently with this Answer, asserting the following causes of action arising from Aldrich's wrongful conduct during and after his employment with AMA:

1. First Cause of Action: Breach of Employment Agreement (Sections 9.1, 9.2, 9.3, and 9.4 of the Employment Agreement dated September 5, 2017, as amended August 1, 2020);

2. Second Cause of Action: Misappropriation of Trade Secrets (California Uniform Trade Secrets Act, Cal. Civ. Code § 3426 et seq.);

3. Third Cause of Action: Breach of Fiduciary Duty; and

4. Fourth Cause of Action: Conversion (of proprietary digital files, including show format bibles, pilot sizzle reels, and the "Summit Challenge" revenue model).

AMA's Cross-Complaint seeks compensatory damages, injunctive relief, exemplary damages (where permitted by law), attorneys' fees, costs, and such other relief as the Court deems just and proper. The Cross-Complaint is incorporated herein by reference for all purposes, including for purposes of AMA's Sixth Affirmative Defense (Setoff and Recoupment).

VII. SIGNATURE

Dated: January 20, 2023

CALDERWOOD & HARKNESS LLP

By: /s/ Renata Vasquez

________________________________________

RENATA VASQUEZ (SBN 224578) DEVON ARCHER (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201

Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I am employed in the County of Los Angeles, State of California. I am over the age of 18 years and not a party to the within action. My business address is 777 South Flower Street, Suite 4200, Los Angeles, California 90017.

On January 20, 2023, I served the foregoing document described as:

DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT

on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope addressed as follows:

Cameron Whitfield, Esq. Julia Nazarian, Esq. WHITFIELD & ASSOCIATES 9465 Wilshire Boulevard, Suite 320 Beverly Hills, California 90212 Telephone: (310) 555-4100 Facsimile: (310) 555-4101

Email: cwhitfield@whitfieldlaw.com

Email: jnazarian@whitfieldlaw.com

Attorneys for Plaintiff Gavin Aldrich

BY ELECTRONIC SERVICE: On the above date, I caused the above-referenced document to be transmitted via electronic mail to the email addresses listed above for each person or entity named above, pursuant to the agreement of the parties to accept service by electronic means.

BY U.S. MAIL: On the above date, I caused the above-referenced document to be deposited in the United States mail at Los Angeles, California, enclosed in a sealed envelope with postage thereon fully prepaid, addressed to the persons at the addresses set forth above. I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed on January 20, 2023, at Los Angeles, California.

________________________________________

Mariana Cordova

GAVIN ALDRICH,	Case No. 22STCV41087
Plaintiff,	Assigned for All Purposes to

Hon. Catherine Villanueva, Dept. 52

DEFENDANT AURELIUS MEDIA

AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,	AMERICAS INC.'S ANSWER TO COMPLAINT
Defendants.	Date Filed: January 20, 2023

Complaint Filed: December 9, 2022

Trial Date: Not Yet Set

RENATA VASQUEZ (SBN 224578) DEVON ARCHER (SBN 301462) CALDERWOOD & HARKNESS LLP 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201
Email: rvasquez@calderwoodharkness.com
Email: darcher@calderwoodharkness.com
Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT
I. INTRODUCTION
Defendant Aurelius Media Americas Inc. ("AMA" or "Defendant"), a Delaware corporation, by and through its attorneys of record, Calderwood & Harkness LLP, hereby answers the Complaint of Plaintiff Gavin Aldrich ("Plaintiff" or "Aldrich"), filed on December 9, 2022, in the above-captioned action. AMA responds to each and every allegation in the Complaint as set forth below. To the extent that any allegation in the Complaint is not expressly admitted herein, it is denied. AMA further asserts the affirmative defenses set forth in Section IV below.
II. GENERAL DENIAL
Pursuant to California Code of Civil Procedure Section 431.30(d), Defendant generally denies each and every allegation contained in the Complaint and denies that Plaintiff has been damaged in any amount whatsoever, or is entitled to any relief of any kind, whether compensatory, consequential, special, general, punitive, or otherwise. Without waiving or limiting the foregoing general denial, and in the interest of clarity and completeness, Defendant specifically responds to certain key allegations of the Complaint as set forth below.
III. SPECIFIC RESPONSES TO KEY ALLEGATIONS
A. Paragraphs 1 Through 10 (Background and Employment)
1. Responding to Paragraphs 1 through 10 of the Complaint, AMA admits that Plaintiff Gavin Aldrich was employed by AMA from approximately September 5, 2017 through October 14, 2022.
2. AMA admits that, at the time of his termination, Aldrich held the title of Senior Vice President of Original Content & Executive Producer within AMA's Unscripted Programming Division.
3. AMA admits that the parties entered into a written Employment Agreement dated September 5, 2017 (the "Employment Agreement"), and that the Employment Agreement was subsequently amended by the First Amendment to Employment Agreement dated August 1, 2020 (the "First Amendment"). AMA avers that the Employment Agreement and the First Amendment speak for themselves and are the best evidence of their terms, and AMA denies any characterization of those documents that is inconsistent with their actual language.
4. AMA admits that Aldrich's annual base salary at the time of his termination was Four Hundred Eighty-Five Thousand Dollars ($485,000) per year, as set forth in the First Amendment.
5. AMA admits that Aldrich received a discretionary annual bonus for fiscal year 2021 in the amount of Two Hundred Twenty-Five Thousand Dollars ($225,000). AMA avers that such bonus was discretionary in nature, as expressly provided in Section 4.2 of the Employment Agreement, and that the payment of any bonus in a prior fiscal year did not create any entitlement to a bonus in any subsequent fiscal year.
6. AMA admits that, pursuant to the terms of a Restricted Stock Unit Award Agreement between Aldrich and Aurelius Global Media Group, Inc. ("AGMG"), AMA's parent corporation, Aldrich was granted 42,500 AGMG restricted stock units ("RSUs"), subject to the vesting schedule and other terms and conditions set forth in the RSU Award Agreement and the AGMG 2016 Omnibus Equity Incentive Plan (the "Plan"). AMA further admits that approximately 15,300 RSUs remained unvested at the time of Aldrich's termination on October 14, 2022.
7. Except as expressly admitted herein, AMA denies each and every remaining allegation in Paragraphs 1 through 10 of the Complaint to the extent such allegations are inconsistent with the terms of the Employment Agreement dated September 5, 2017, as amended by the First Amendment dated August 1, 2020, or are otherwise inaccurate, misleading, or incomplete. AMA avers that the Employment Agreement and First Amendment are integrated written instruments and that their terms cannot be varied, supplemented, or contradicted by Plaintiff's characterizations in the Complaint.
B. Paragraphs 11 Through 18 (Termination)
8. Responding to Paragraphs 11 through 18 of the Complaint, AMA admits that it terminated Aldrich's employment on October 14, 2022.
9. AMA admits that the termination was designated as a termination "for cause" under Section 7.2(b) of the Employment Agreement. AMA avers that Section 7.2(b) sets forth the definition of "Cause" as that term is used in the Employment Agreement, and that the Employment Agreement speaks for itself with respect to the grounds constituting "Cause."
10. AMA denies that the "for cause" designation was pretextual, retaliatory, or otherwise improper. AMA denies that the termination was motivated by any unlawful purpose, discriminatory animus, or retaliatory intent. AMA denies that the termination was designed to deprive Aldrich of any compensation, benefits, or contractual entitlements to which he would otherwise have been entitled.
11. AMA affirmatively alleges that the termination of Aldrich's employment "for cause" was based on two independent grounds, each of which independently constitutes "Cause" within the meaning of Section 7.2(b) of the Employment Agreement:
(i) Violation of AMA's Acceptable Use and Confidentiality Policy and Breach of Section 9.4 of the Employment Agreement (Confidentiality). Between approximately July 2021 and September 2022, Aldrich transmitted approximately 340 emails containing proprietary and confidential AMA information — including, without limitation, show concepts, audience analytics and viewership data, revenue projections, internal programming strategy memoranda, and talent deal terms and compensation structures — from his AMA corporate email account (galdrich@aureliusmedia.com) to his personal email account (galdrich.private@Northgate Software.com), in violation of AMA's Acceptable Use and Confidentiality Policy (revised January 2020) and in material breach of Section 9.4 of the Employment Agreement. Additionally, and of particular significance, Aldrich transmitted three complete unscripted show format bibles (for concepts titled "Apex Endurance," "The Remix," and "Untamed West"), two pilot sizzle reels, and a detailed revenue model for AMA's "Summit Challenge" franchise to an email address associated with Halcyon Creek Productions LLC (info@halcyoncreekprod.com), a California-based production company operating in the unscripted/reality television space. These transmissions were unauthorized by AMA, were not made in furtherance of any legitimate AMA business purpose, and constituted a material breach of the Employment Agreement and a material violation of AMA's written policies. The "Summit Challenge" franchise is one of AMA's most commercially valuable properties, and the unauthorized dissemination of its revenue model to a competing production company posed a direct and substantial threat to AMA's competitive position and business interests.
(ii) Insubordination. In October 2022, Aldrich refused to comply with a direct and lawful instruction from AMA President Jonathan Mercer regarding the restructuring of the Unscripted Programming Division. Specifically, on or about October 7, 2022, Mercer issued a written directive to Aldrich regarding the consolidation of certain production teams and the reallocation of budgetary resources within the Unscripted Programming Division. Rather than comply with this directive or raise his objections through appropriate internal channels, Aldrich responded to Mercer in writing, characterizing the directive as "creatively bankrupt and commercially idiotic," and subsequently disseminated his written refusal and disparaging characterization to multiple subordinates within the Unscripted Programming Division in a manner calculated to undermine the chain of command and to foment opposition to a legitimate management decision. This conduct constituted insubordination and a material breach of Aldrich's obligations under the Employment Agreement, including his duty of loyalty to AMA as a senior officer of the company.
12. AMA specifically denies Aldrich's allegation that the restructuring directive issued by President Jonathan Mercer was an effort to misclassify employees or to reduce overtime costs through improper or unlawful means. The restructuring was a legitimate cost-efficiency measure necessitated by declining advertising revenues affecting AMA and the broader media industry, and was consistent with AMA's authority to manage its business operations as it deemed appropriate. The restructuring directive was reviewed and approved by AMA's General Counsel and Human Resources Department prior to its issuance.
13. AMA denies Aldrich's characterization of the circumstances of his termination as set forth in Paragraphs 11 through 18 of the Complaint. AMA denies all allegations of wrongful motive, pretext, retaliation, or bad faith in connection with the termination.
C. Paragraphs 19 Through 26 (Restrictive Covenant Provisions)
14. Responding to Paragraphs 19 through 26 of the Complaint, AMA admits that Section 9 of the Employment Agreement contains restrictive covenant provisions, including the following:
(a) Section 9.1 — Non-Competition. Section 9.1 provides that, for a period of eighteen (18) months following the termination of Aldrich's employment (for any reason), Aldrich shall not, directly or indirectly, engage in, be employed by, provide consulting or advisory services to, or have any ownership interest in (except for passive ownership of not more than two percent (2%) of the outstanding equity securities of a publicly traded company) 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, licensing, or distribution of unscripted/reality television content in North America.
(b) Section 9.2 — Non-Solicitation of Employees. Section 9.2 provides that, for a period of twenty-four (24) months following the termination of Aldrich's employment, Aldrich shall not, directly or indirectly, solicit, recruit, hire, or induce, or attempt to solicit, recruit, hire, or induce, any employee of AMA or any of its affiliates to leave the employ of AMA or any of its affiliates, or to accept employment with any other person or entity.
(c) Section 9.3 — Non-Solicitation of Business Relationships. Section 9.3 provides that, for a period of twenty-four (24) months following the termination of Aldrich's employment, Aldrich shall not, directly or indirectly, solicit, divert, or appropriate, or attempt to solicit, divert, or appropriate, any business, client, customer, talent, vendor, or business relationship of AMA or any of its affiliates for the benefit of any person or entity other than AMA.
(d) Section 9.4 — Confidentiality. Section 9.4 provides that Aldrich shall not, at any time during or after his employment with AMA, disclose, use, copy, transfer, or disseminate any Confidential Information (as defined in Section 9.4(a) of the Employment Agreement) for any purpose other than the performance of his duties on behalf of AMA. The confidentiality obligation is indefinite in duration and covers, among other things, proprietary content, show formats and format bibles, revenue data, financial projections, audience analytics, programming strategy, and talent agreements and compensation terms.
15. AMA denies Aldrich's allegations that any of the restrictive covenant provisions set forth in Section 9 of the Employment Agreement are void, unenforceable, unconscionable, or otherwise invalid.
16. AMA affirmatively alleges that the restrictive covenant provisions contained in Section 9 of the Employment Agreement are reasonable in scope, duration, and geographic reach, are narrowly tailored to protect AMA's legitimate business interests — including its trade secrets, confidential information, client and talent relationships, and competitive position — and are supported by adequate consideration, including Aldrich's initial employment, his promotion to Senior Vice President, and the enhanced compensation and RSU grants provided under the First Amendment.
17. AMA affirmatively alleges that the Employment Agreement is governed by New York law pursuant to the choice-of-law clause set forth in Section 14.3 of the Employment Agreement, which provides in relevant part: "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 avers that this choice-of-law provision was negotiated at arm's length between the parties, that AMA is headquartered in New York, that the Employment Agreement was executed in New York, and that the parties had a substantial and reasonable basis for selecting New York law to govern the Employment Agreement.
18. AMA denies Aldrich's contention that California Business and Professions Code Section 16600 renders all restrictive covenant provisions in the Employment Agreement void or unenforceable. AMA contends that the contractual choice of New York law is valid and enforceable, and that under New York law, the restrictive covenant provisions are reasonable and enforceable. AMA further contends that, even if California law were to apply to certain provisions, the confidentiality provision (Section 9.4) is enforceable under California law, and that the remaining provisions are severable and enforceable to the extent permitted by applicable law.
D. Paragraphs 27 Through 32 (Severance and RSUs)
19. Responding to Paragraphs 27 through 32 of the Complaint, AMA admits that Section 7.3 of the Employment Agreement provides for certain severance benefits in the event of a termination "without cause," including: (a) severance pay equal to twenty-four (24) months of base salary (i.e., Nine Hundred Seventy Thousand Dollars ($970,000)); (b) a pro-rata bonus for the fiscal year in which the termination occurs, based on actual performance; and (c) an eighteen (18) month subsidy of premiums for continuation coverage under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). AMA avers that Section 7.3 speaks for itself and is the best evidence of its terms.
20. AMA denies that Aldrich is entitled to any severance compensation, pro-rata bonus, COBRA subsidy, or any other benefits under Section 7.3 of the Employment Agreement, because Aldrich was terminated "for cause" under Section 7.2(b) of the Employment Agreement. Section 7.2(b) expressly provides that, upon a termination for Cause, the Employee shall be entitled only to accrued and unpaid base salary through the date of termination, and shall not be entitled to any severance, bonus, or other post-termination benefits.
21. AMA denies that the approximately 15,300 unvested RSUs held by Aldrich at the time of his termination are subject to accelerated vesting. Under the express terms of the RSU Award Agreement dated September 5, 2017 (as modified by the grant adjustment memorandum dated August 1, 2020) and the AGMG 2016 Omnibus Equity Incentive Plan, all unvested RSUs are immediately and automatically forfeited upon a termination of employment for "Cause" (as defined in the Plan, which incorporates the definition of "Cause" set forth in the Employment Agreement). AMA avers that the RSU Award Agreement and the Plan are the best evidence of their terms and that Aldrich's characterization of his RSU entitlements in the Complaint is inaccurate and contrary to the governing documents.
E. Paragraphs 33 Through 38 (Expense Reimbursement)
22. Responding to Paragraphs 33 through 38 of the Complaint, AMA is without sufficient information or belief to admit or deny Aldrich's allegation that AMA failed to reimburse him for approximately Twenty-Eight Thousand Four Hundred Dollars ($28,400) in business expenses allegedly incurred in connection with his duties at AMA. AMA avers that it has not yet had the opportunity to conduct a full review of Aldrich's expense reimbursement records and supporting documentation, and therefore treats these allegations as denied, pursuant to California Code of Civil Procedure Section 431.30(d). AMA will investigate this claim through the discovery process and reserves the right to amend this response upon completion of its investigation.
23. AMA denies that any failure to reimburse business expenses, if such failure is established, was willful, knowing, or intentional, or that any such failure constituted a violation of California Labor Code Section 2802 or any other applicable statute. AMA further denies that any failure to reimburse, if established, entitles Aldrich to penalties, interest, or attorneys' fees under any provision of the California Labor Code.
F. Paragraphs 39 Through 45 (Damages)
24. Responding to Paragraphs 39 through 45 of the Complaint, AMA denies that Aldrich has suffered any damages as a result of his termination or as a result of any act or omission by AMA.
25. AMA denies that Aldrich is entitled to any relief whatsoever, whether compensatory, consequential, incidental, special, general, emotional distress, punitive, exemplary, or otherwise.
26. AMA specifically denies that Aldrich is entitled to his claimed aggregate demand of Four Million One Hundred Fifty Thousand Dollars ($4,150,000), or any portion thereof. AMA avers that Aldrich's damages claims are speculative, unsupported, and excessive, and that Aldrich has failed to establish any cognizable basis for the relief he seeks.
IV. AFFIRMATIVE DEFENSES
Without assuming the burden of proof on any issue as to which Defendant would not otherwise bear such burden under applicable law, and without waiving any objections, defenses, or rights that Defendant may have or may hereafter assert, Defendant Aurelius Media Americas Inc. asserts the following affirmative defenses to the Complaint:
FIRST AFFIRMATIVE DEFENSE
(Failure to State a Claim)
The Complaint, and each and every cause of action alleged therein, fails to state facts sufficient to constitute a cause of action against Defendant Aurelius Media Americas Inc. Plaintiff's allegations, even if taken as true, do not establish the elements of any of the causes of action asserted in the Complaint, and each cause of action is therefore subject to dismissal.
SECOND AFFIRMATIVE DEFENSE
("For Cause" Termination)
Aldrich's claims for breach of contract, wrongful termination, and all related claims arising from or connected with the termination of his employment are barred, in whole or in part, because AMA terminated Aldrich "for cause" within the meaning of Section 7.2(b) of the Employment Agreement. The "for cause" determination was based on documented and substantiated policy violations, including the unauthorized transmission of approximately 340 emails containing confidential and proprietary AMA information from Aldrich's corporate email account to his personal email account, and the unauthorized transmission of three unscripted show format bibles, two pilot sizzle reels, and a detailed revenue model for the "Summit Challenge" franchise to an email address associated with Halcyon Creek Productions LLC (info@halcyoncreekprod.com), a competing production company, in violation of Section 9.4 of the Employment Agreement and AMA's Acceptable Use and Confidentiality Policy (revised January 2020). These acts constituted a material breach of the Employment Agreement. Accordingly, Aldrich is not entitled to severance, pro-rata bonus, COBRA subsidy, accelerated RSU vesting, or any other post-termination benefits under the Employment Agreement.
THIRD AFFIRMATIVE DEFENSE
(Unclean Hands)
Aldrich's claims are barred, in whole or in part, by the equitable doctrine of unclean hands. Aldrich engaged in material breaches of his Employment Agreement and his fiduciary duties as a senior officer of AMA. Specifically, Aldrich systematically transmitted proprietary and confidential AMA materials — including complete show format bibles for "Apex Endurance," "The Remix," and "Untamed West," two pilot sizzle reels, and a detailed revenue model for AMA's "Summit Challenge" franchise — to Halcyon Creek Productions LLC, a California-based production company operating in the unscripted/reality television space. The "Summit Challenge" franchise is one of AMA's most commercially valuable properties, generating approximately Forty-Two Million Dollars ($42,000,000) in annual revenue, and the unauthorized dissemination of its revenue model to a competitor constituted a grave breach of Aldrich's obligations of loyalty and confidentiality. Aldrich's own inequitable conduct directly relates to the subject matter of this litigation and bars him from obtaining equitable or legal relief.
FOURTH AFFIRMATIVE DEFENSE
(Waiver and Estoppel)
Aldrich's claims regarding the enforceability of the restrictive covenant provisions in Section 9 of the Employment Agreement are barred, in whole or in part, by the doctrines of waiver and estoppel. Aldrich voluntarily entered into the Employment Agreement on September 5, 2017, and voluntarily entered into the First Amendment to the Employment Agreement on August 1, 2020, with full knowledge of the restrictive covenant provisions contained in Section 9, including the non-competition provision (Section 9.1), the non-solicitation of employees provision (Section 9.2), the non-solicitation of business relationships provision (Section 9.3), and the confidentiality provision (Section 9.4). Aldrich was represented by independent legal counsel in connection with the negotiation and execution of the First Amendment dated August 1, 2020, and accepted the restrictive covenant provisions as a material term and condition of his continued employment with AMA and his promotion to the position of Senior Vice President of Original Content & Executive Producer. Aldrich received substantial consideration for the restrictive covenant provisions, including his promotion, a significant increase in base salary, enhanced bonus eligibility, and the grant of additional RSUs. Having voluntarily agreed to these provisions, received the benefit of substantial consideration therefor, and performed under the Employment Agreement for more than five years, Aldrich is estopped from challenging the enforceability of the restrictive covenant provisions.
FIFTH AFFIRMATIVE DEFENSE
(Failure to Mitigate Damages)
To the extent Aldrich asserts claims for lost compensation, lost benefits, future economic loss, or any other form of economic damages, his claims are barred or reduced, in whole or in part, by his failure to exercise reasonable diligence in mitigating his damages by seeking and obtaining comparable employment or other gainful engagement in the media industry or otherwise. Aldrich is an experienced senior executive in the media and entertainment industry and has not demonstrated that he took reasonable steps to mitigate the damages he alleges.
SIXTH AFFIRMATIVE DEFENSE
(Setoff and Recoupment)
Any damages, compensation, or other monetary relief to which Aldrich may be found entitled, if any, are subject to setoff and recoupment based on AMA's affirmative claims against Aldrich. AMA has sustained substantial damages as a direct and proximate result of Aldrich's wrongful conduct, including but not limited to: (a) breach of the Employment Agreement, specifically Sections 9.1, 9.2, 9.3, and 9.4 thereof; (b) misappropriation of trade secrets in violation of the California Uniform Trade Secrets Act, California Civil Code Section 3426 et seq.; (c) breach of fiduciary duty owed to AMA as a senior officer; and (d) conversion of proprietary digital files, including show format bibles, pilot sizzle reels, and the "Summit Challenge" revenue model. AMA's affirmative claims against Aldrich are asserted in a separately filed Cross-Complaint, which has been filed concurrently herewith and is incorporated herein by this reference for purposes of setoff and recoupment.
SEVENTH AFFIRMATIVE DEFENSE
(Statute of Limitations)
Aldrich's claims, and each cause of action alleged in the Complaint, are barred, in whole or in part, by the applicable statutes of limitations, including but not limited to California Code of Civil Procedure Sections 335.1, 337, 338, 339, and 340, and any other applicable limitations periods under California or New York law. To the extent any of Aldrich's claims are based on acts or omissions occurring outside the applicable limitations period, such claims are time-barred.
EIGHTH AFFIRMATIVE DEFENSE
(Comparative Fault / Contributory Conduct)
Aldrich's own conduct contributed to and was a proximate cause of his termination and any alleged damages. Specifically, Aldrich's unauthorized transmission of confidential and proprietary AMA information to his personal email account and to Halcyon Creek Productions LLC, and his insubordination with respect to the restructuring directive issued by AMA President Jonathan Mercer, constituted the direct cause of his termination "for cause." Any damages to which Aldrich may be found entitled are barred or reduced by his own fault, misconduct, and breach of the Employment Agreement, in proportion to the degree to which his own conduct contributed to his alleged injuries.
NINTH AFFIRMATIVE DEFENSE
(Choice of Law — New York)
The Employment Agreement is governed by New York law pursuant to the choice-of-law provision set forth in Section 14.3 of the Employment Agreement. To the extent Aldrich relies on California statutory or common law — including, without limitation, California Business and Professions Code Section 16600, California Labor Code Section 2802, or any other provision of California law — to challenge the enforceability of the restrictive covenant provisions or to assert claims that are governed by the terms of the Employment Agreement, AMA contends that New York law governs the interpretation and enforcement of the Employment Agreement, including the restrictive covenant provisions contained in Section 9. Under New York law, the restrictive covenant provisions are reasonable in scope, duration, and geographic reach, are supported by legitimate business interests, and are fully enforceable. The contractual selection of New York law was made by sophisticated parties represented by counsel, was negotiated at arm's length, and bears a reasonable relationship to the parties and the transaction.
TENTH AFFIRMATIVE DEFENSE
(No Wrongful Termination in Violation of Public Policy)
Aldrich's claim for wrongful termination in violation of public policy fails as a matter of law and fact. Aldrich's termination was not motivated by any consideration that contravenes a fundamental public policy of the State of California or any other jurisdiction. Aldrich was terminated for legitimate, well-documented business reasons — specifically, his material breach of confidentiality obligations and his insubordination — and not in retaliation for any protected activity, whistleblowing, or the exercise of any statutory or constitutional right. Aldrich's internal objection to a legitimate restructuring directive issued by AMA management does not constitute "protected activity" within the meaning of the Tameny v. Tarrant Holdings (1980) 27 Cal.3d 167 doctrine, or under any other applicable public policy recognized by California courts. AMA was well within its rights as an employer to terminate an at-will senior executive who materially breached his contractual obligations and engaged in insubordinate conduct that undermined management authority and the orderly operation of the business.
ELEVENTH AFFIRMATIVE DEFENSE
(No Breach of Implied Covenant of Good Faith and Fair Dealing)
AMA did not breach the implied covenant of good faith and fair dealing with respect to the Employment Agreement or any other agreement with Aldrich. AMA's designation of Aldrich's termination as "for cause" under Section 7.2(b) of the Employment Agreement was made in good faith, was supported by an objective and documented factual basis — including the results of an internal investigation conducted by AMA's Information Security and Legal departments, which confirmed the unauthorized email transmissions — and was consistent with the terms and provisions of the Employment Agreement. AMA did not act to deprive Aldrich of the benefits of the Employment Agreement through bad faith, unfair dealing, or any other improper conduct. AMA exercised its contractual rights in a manner that was objectively reasonable and consistent with the reasonable expectations of the parties as expressed in the Employment Agreement.
TWELFTH AFFIRMATIVE DEFENSE
(Reservation of Rights)
Defendant reserves the right to assert additional affirmative defenses, and to amend this Answer to add such defenses, as they become known through the course of discovery, further factual investigation, or legal research. This reservation is made without waiver of any existing defenses or rights.
V. PRAYER FOR RELIEF
WHEREFORE, Defendant Aurelius Media Americas Inc. prays for judgment as follows:
1. That Plaintiff Gavin Aldrich take nothing by his Complaint, and that each and every cause of action alleged therein be denied in its entirety;
2. That each and every cause of action in the Complaint be dismissed with prejudice;
3. That Defendant Aurelius Media Americas Inc. recover its costs of suit incurred herein, including but not limited to filing fees, service costs, deposition costs, and all other costs recoverable under California Code of Civil Procedure Section 1032 and applicable law;
4. That Defendant Aurelius Media Americas Inc. recover its reasonable attorneys' fees incurred in the defense of this action, to the extent permitted by applicable law, contract, or statute, including but not limited to the attorneys' fees provision set forth in Section 14.7 of the Employment Agreement;
5. For such other and further relief as the Court deems just and proper.
VI. CROSS-REFERENCE TO CROSS-COMPLAINT
AMA has filed a separate Cross-Complaint against Gavin Aldrich concurrently with this Answer, asserting the following causes of action arising from Aldrich's wrongful conduct during and after his employment with AMA:
1. First Cause of Action: Breach of Employment Agreement (Sections 9.1, 9.2, 9.3, and 9.4 of the Employment Agreement dated September 5, 2017, as amended August 1, 2020);
2. Second Cause of Action: Misappropriation of Trade Secrets (California Uniform Trade Secrets Act, Cal. Civ. Code § 3426 et seq.);
3. Third Cause of Action: Breach of Fiduciary Duty; and
4. Fourth Cause of Action: Conversion (of proprietary digital files, including show format bibles, pilot sizzle reels, and the "Summit Challenge" revenue model).
AMA's Cross-Complaint seeks compensatory damages, injunctive relief, exemplary damages (where permitted by law), attorneys' fees, costs, and such other relief as the Court deems just and proper. The Cross-Complaint is incorporated herein by reference for all purposes, including for purposes of AMA's Sixth Affirmative Defense (Setoff and Recoupment).
VII. SIGNATURE
Dated: January 20, 2023
CALDERWOOD & HARKNESS LLP
By: /s/ Renata Vasquez
________________________________________
RENATA VASQUEZ (SBN 224578) DEVON ARCHER (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201
Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.
PROOF OF SERVICE
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I am employed in the County of Los Angeles, State of California. I am over the age of 18 years and not a party to the within action. My business address is 777 South Flower Street, Suite 4200, Los Angeles, California 90017.
On January 20, 2023, I served the foregoing document described as:
DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT
on the interested parties in this action by placing a true copy thereof enclosed in a sealed envelope addressed as follows:
Cameron Whitfield, Esq. Julia Nazarian, Esq. WHITFIELD & ASSOCIATES 9465 Wilshire Boulevard, Suite 320 Beverly Hills, California 90212 Telephone: (310) 555-4100 Facsimile: (310) 555-4101
Email: cwhitfield@whitfieldlaw.com
Email: jnazarian@whitfieldlaw.com
Attorneys for Plaintiff Gavin Aldrich
BY ELECTRONIC SERVICE: On the above date, I caused the above-referenced document to be transmitted via electronic mail to the email addresses listed above for each person or entity named above, pursuant to the agreement of the parties to accept service by electronic means.
BY U.S. MAIL: On the above date, I caused the above-referenced document to be deposited in the United States mail at Los Angeles, California, enclosed in a sealed envelope with postage thereon fully prepaid, addressed to the persons at the addresses set forth above. I am readily familiar with the firm's practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on January 20, 2023, at Los Angeles, California.
________________________________________
Mariana Cordova
GAVIN ALDRICH, | Case No. 22STCV41087
Plaintiff, | Assigned for All Purposes to
Hon. Catherine Villanueva, Dept. 52
v.
DEFENDANT AURELIUS MEDIA
AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive, | AMERICAS INC.'S ANSWER TO COMPLAINT
Defendants. | Date Filed: January 20, 2023
Complaint Filed: December 9, 2022
Trial Date: Not Yet Set

SUPERIOR COURT OF THE STATE OF CALIFORNIA

DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT

I. INTRODUCTION

II. GENERAL DENIAL

III. SPECIFIC RESPONSES TO KEY ALLEGATIONS

IV. AFFIRMATIVE DEFENSES

FIRST AFFIRMATIVE DEFENSE

SECOND AFFIRMATIVE DEFENSE

THIRD AFFIRMATIVE DEFENSE

FOURTH AFFIRMATIVE DEFENSE

FIFTH AFFIRMATIVE DEFENSE

SIXTH AFFIRMATIVE DEFENSE

SEVENTH AFFIRMATIVE DEFENSE

EIGHTH AFFIRMATIVE DEFENSE

NINTH AFFIRMATIVE DEFENSE

TENTH AFFIRMATIVE DEFENSE

ELEVENTH AFFIRMATIVE DEFENSE

TWELFTH AFFIRMATIVE DEFENSE

V. PRAYER FOR RELIEF

VI. CROSS-REFERENCE TO CROSS-COMPLAINT

VII. SIGNATURE

CALDERWOOD & HARKNESS LLP

PROOF OF SERVICE

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

DEFENDANT AURELIUS MEDIA AMERICAS INC.'S ANSWER TO COMPLAINT

DEFENDANT AURELIUS MEDIA

Record

Parties

Dates

Amounts