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

opposition-motion-to-strike.docx DOCUMENT Finance & Banking

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES — CENTRAL DISTRICT

I. INTRODUCTION

Plaintiff Gavin Aldrich ("Aldrich") moves to strike from the Cross-Complaint of Defendant and Cross-Complainant Aurelius Media Americas Inc. ("AMA") all references to and allegations based upon Section 9.1 of the parties' Employment Agreement — an eighteen-month post-termination non-competition clause — on the ground that such non-competition provision is void and unenforceable under California Business and Professions Code Section 16600. Aldrich contends that the mere presence of references to this clause in AMA's Cross-Complaint constitutes an improper attempt to enforce an illegal restraint on trade and that all such references must be excised from the pleading.

While AMA acknowledges that the enforceability of Section 9.1 under California law is subject to serious challenge, and while AMA does not intend to press this Court to enforce the non-competition clause against Aldrich as a standalone obligation, Aldrich's Motion to Strike should be denied for three independent reasons.

First, AMA's Cross-Complaint does not seek to enforce Section 9.1 as a standalone cause of action, nor does it seek injunctive relief preventing Aldrich from competing in the unscripted television industry or from accepting employment with any particular entity. The prayer for relief in the Cross-Complaint contains no request for enforcement of the non-competition clause, no request for an injunction barring Aldrich from working, and no claim for damages measured by Aldrich's alleged competitive activity. The operative factual basis for AMA's breach of contract claim is Aldrich's violation of Section 9.4 — the confidentiality provision — through his unauthorized transmission of proprietary show format bibles, pilot sizzle reels, and a detailed revenue model to a direct competitor.

Second, the references to Section 9.1 in the Cross-Complaint are relevant factual context for AMA's properly pled causes of action. Under the California Uniform Trade Secrets Act ("CUTSA"), AMA must demonstrate that it took reasonable efforts to maintain the secrecy of its trade secrets. The existence of the restrictive covenant framework — including Section 9.1 — is probative of AMA's trade secret protection program. The references are also relevant to establish Aldrich's knowledge and intent at the time he transmitted proprietary materials to Halcyon Creek Productions LLC, a direct competitor. These are legitimate evidentiary purposes entirely distinct from enforcement of the non-compete.

Third, striking factual allegations at the pleading stage is inappropriate where, as here, the allegations are relevant to the overall dispute and provide necessary context for multiple properly pled causes of action. A motion to strike is a narrow remedy under Code of Civil Procedure Section 436 and is not a substitute for a demurrer. If Aldrich's concern is that the First Cause of Action improperly rests on an unenforceable contractual provision, the appropriate remedy is a demurrer directed at that cause of action — not a motion to excise factual paragraphs that bear on AMA's trade secret, fiduciary duty, and confidentiality claims.

In the interest of judicial economy and in recognition of Aldrich's legitimate concern that the pleadings not be used as a vehicle to chill his employment rights under California law, AMA offers an alternative resolution. AMA is prepared to file an Amended Cross-Complaint that removes Section 9.1 from the caption of the First Cause of Action and adds an express disclaimer that AMA does not seek injunctive or monetary relief based on enforcement of the non-competition clause, while retaining references to Section 9.1 solely as factual context relevant to AMA's confidentiality, trade secret, and fiduciary duty claims. AMA tendered this proposal to Aldrich's counsel on February 22, 2023, and has received no response.

For the reasons set forth below, the Court should deny the Motion to Strike in its entirety, or, in the alternative, grant AMA leave to amend its Cross-Complaint consistent with the proposal described herein.

II. BACKGROUND

A. The Parties

AMA is a Delaware corporation, qualified to do business in California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC ("AGMG"), a public limited company organized under the laws of England and Wales and headquartered at 34 Kingsway, London WC2B 6EX, United Kingdom. AGMG is publicly traded on the London Stock Exchange and maintains production operations in seventeen countries.

AMA's domestic operations are substantial. The company employs approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California. AMA operates seven production facilities and fourteen show units within the State of California, producing and distributing unscripted and reality television programming for major broadcast and streaming networks. AMA's programming portfolio includes several widely recognized unscripted franchises, including "Summit Challenge," which generates approximately $42 million in annual revenue for the company and has been renewed for eleven consecutive seasons.

Plaintiff Gavin Aldrich was employed by AMA from September 5, 2017 through October 14, 2022 — a period of approximately five years. Over the course of his tenure, Aldrich rose to the position of Senior Vice President of Original Content & Executive Producer, a senior leadership role in which he reported directly to AMA President Jonathan Mercer. At the time of his termination, Aldrich's base salary was $485,000 per year. He was also eligible for a discretionary annual bonus, which most recently totaled $225,000 for fiscal year 2021. In addition, Aldrich held 42,500 AGMG restricted stock units ("RSUs"), of which 15,300 remained unvested at the time of his termination. In his capacity as Senior Vice President of Original Content, Aldrich had access to AMA's most sensitive proprietary information, including show format bibles, pilot scripts and sizzle reels, audience analytics, revenue projections, talent deal terms, and strategic development plans.

B. The Employment Agreement and Restrictive Covenant Provisions

Aldrich's employment with AMA was governed by a written Employment Agreement, originally executed on September 5, 2017, and subsequently amended on August 1, 2020 (collectively, the "Employment Agreement"). The Employment Agreement is a comprehensive document that addresses, among other things, Aldrich's duties and reporting structure, compensation and benefits, grounds for termination, post-termination obligations, and restrictive covenants.

Section 9 of the Employment Agreement contains four distinct restrictive covenant provisions, each addressing a different aspect of Aldrich's post-termination obligations:

Section 9.1 — Non-Competition. Section 9.1 provides for an eighteen-month post-termination non-competition period during which Aldrich is prohibited from working for any "Competing Enterprise," defined as any entity deriving twenty-five percent (25%) or more of its revenue from the production, licensing, or distribution of unscripted or reality television content in North America. The provision applies regardless of the basis for termination.

Section 9.2 — Non-Solicitation of Employees. Section 9.2 imposes a twenty-four-month post-termination restriction prohibiting Aldrich from directly or indirectly soliciting, recruiting, or inducing any AMA employee with whom Aldrich worked within the twelve months preceding his termination to leave AMA's employ or to accept employment with any other person or entity.

Section 9.3 — Non-Solicitation of Business Relationships. Section 9.3 imposes a twenty-four-month post-termination restriction prohibiting Aldrich from directly or indirectly soliciting, diverting, or interfering with any network, platform, or advertiser client of AMA with whom Aldrich had material contact during the twenty-four months preceding his termination.

Section 9.4 — Confidentiality. Section 9.4 is an indefinite confidentiality obligation that prohibits Aldrich from disclosing, using, or otherwise exploiting AMA's proprietary information. The provision defines "Confidential Information" broadly to include proprietary content, show formats, show format bibles, pilot scripts, sizzle reels, audience analytics, revenue data, talent agreements, strategic plans, and all other information designated as confidential by the Company. Unlike Sections 9.1 through 9.3, the confidentiality obligation under Section 9.4 has no temporal limitation and survives the termination of the Employment Agreement indefinitely.

The Employment Agreement also contains a choice-of-law provision at Section 14.3, which provides that the Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts-of-law principles. The interplay between this choice-of-law provision and California's strong public policy against non-competition agreements is, of course, a significant issue in this litigation, but it is not directly before the Court on the instant motion and need not be resolved here.

C. Aldrich's Termination

AMA terminated Aldrich's employment "for cause" on October 14, 2022, pursuant to Section 7.2(b) of the Employment Agreement. The termination was based on two independent grounds.

First — Unauthorized Transmission of Confidential Information. In August 2022, AMA's Information Technology security team initiated a routine data loss prevention ("DLP") audit of outbound email traffic from senior personnel. The audit revealed that, over a fourteen-month period from approximately July 2021 through September 2022, Aldrich had forwarded approximately 340 emails containing proprietary information to his personal email account at galdrich.private@Northgate Software.com. The forwarded materials included show concepts, pilot scripts, audience analytics reports, revenue projections, and talent deal terms — precisely the categories of information protected by Section 9.4 of the Employment Agreement.

More critically, forensic analysis conducted by AMA's IT security team in September and October 2022 further revealed that Aldrich had transmitted three complete unscripted show format bibles — for programs internally designated "Apex Endurance," "The Remix," and "Untamed West" — as well as two pilot sizzle reels and a detailed revenue model for AMA's top-performing franchise "Summit Challenge" to an external email address: info@halcyoncreekprod.com. That email address belongs to Halcyon Creek Productions LLC, a California-based production company that operates as a direct competitor to AMA in the unscripted and reality television space. Halcyon Creek is owned and operated by Nina Castellanos, a former business associate of Aldrich who previously worked at AMA in a production capacity before departing in 2019.

The Summit Challenge revenue model transmitted by Aldrich to Halcyon Creek Productions contained granular financial data for a franchise generating approximately $42 million in annual revenue for AMA, including per-episode production costs, network license fees, international distribution revenue breakdowns, advertising revenue-share arrangements, and multi-year renewal projections. This information is among the most commercially sensitive data in AMA's possession.

Second — Insubordination. Separately, in September 2022, AMA President Jonathan Mercer issued a restructuring directive that would have reorganized certain production units under a consolidated management structure. Aldrich refused to implement the directive, characterizing it in a written email as "creatively bankrupt and commercially idiotic." Aldrich then disseminated his refusal email to six of his direct subordinates, undermining Mercer's authority and the company's management hierarchy.

It is also relevant to note that Aldrich signed AMA's Acceptable Use and Confidentiality Policy on April 12, 2021. That policy expressly prohibits the transmission of Company proprietary information to personal email accounts or to any non-Company-approved third-party recipients. Aldrich acknowledged in his signed attestation that he had read, understood, and agreed to comply with the policy.

D. Aldrich's Complaint

Aldrich filed the instant complaint on December 9, 2022, initiating Case Number 22STCV41087. The Complaint asserts five causes of action:

(1) Wrongful Termination in Violation of Public Policy, alleging that AMA's stated grounds for termination were pretextual and that the true reason for Aldrich's termination was his opposition to the restructuring directive, which he characterizes as protected activity;

(2) Breach of Contract, contesting AMA's designation of the termination as "for cause" and seeking payment of severance ($970,000, representing two years' base salary), a pro-rata bonus for fiscal year 2022 ($168,750), and acceleration of the 15,300 unvested AGMG restricted stock units (valued at approximately $332,200 based on the closing price of AGMG shares on the termination date);

(3) Breach of the Implied Covenant of Good Faith and Fair Dealing, alleging that AMA acted in bad faith by manufacturing a "for cause" termination to avoid paying severance and accelerating Aldrich's RSUs;

(4) Declaratory Relief Regarding the Enforceability of the Restrictive Covenants, seeking a judicial declaration that Sections 9.1, 9.2, and 9.3 of the Employment Agreement are void and unenforceable under California Business and Professions Code Section 16600; and

(5) Violation of California Labor Code Section 2802, seeking reimbursement of $28,400 in allegedly unreimbursed business expenses.

Aldrich's aggregate demand across all causes of action is approximately $4,150,000. Aldrich is represented by Cameron Whitfield and Julia Nazarian of Whitfield & Associates, 9465 Wilshire Boulevard, Suite 320, Beverly Hills, California 90212.

E. AMA's Cross-Complaint

On January 20, 2023, AMA filed a Cross-Complaint asserting four causes of action against Aldrich:

(1) Breach of Employment Agreement (§§ 9.1, 9.2, 9.3, 9.4). This cause of action is based on Aldrich's unauthorized transmission of confidential information in violation of the confidentiality provisions and the broader restrictive covenant framework established in Section 9 of the Employment Agreement. The operative factual basis for this claim is Aldrich's violation of Section 9.4 — the confidentiality provision — through the unauthorized transmission of proprietary materials to his personal email account and to Halcyon Creek Productions LLC.

(2) Misappropriation of Trade Secrets (Cal. Civ. Code § 3426 *et seq.* — CUTSA). AMA alleges that the show format bibles for "Apex Endurance," "The Remix," and "Untamed West," the two pilot sizzle reels, and the Summit Challenge revenue model constitute trade secrets within the meaning of CUTSA, and that Aldrich's unauthorized transmission of these materials to Halcyon Creek Productions LLC constitutes misappropriation. AMA seeks both compensatory damages and, on the basis that the misappropriation was willful and malicious, exemplary damages pursuant to Civil Code Section 3426.3.

(3) Breach of Fiduciary Duty. As Senior Vice President of Original Content & Executive Producer, Aldrich occupied a position of trust and confidence within AMA and owed fiduciary duties of loyalty and care to the company. His unauthorized disclosure of confidential and proprietary information to a direct competitor — while still employed by AMA and receiving the full benefits of his compensation package — constituted a breach of those fiduciary duties.

(4) Conversion. Aldrich's unauthorized appropriation and transmission of AMA's proprietary digital files — including show format bibles, sizzle reels, and detailed revenue models — constitutes the wrongful exercise of dominion over AMA's property, amounting to conversion.

It is critical to note what the Cross-Complaint does not seek. The Cross-Complaint does not seek injunctive relief preventing Aldrich from working in the unscripted television industry or from competing with AMA in any manner. The Cross-Complaint does not seek damages calculated by reference to Aldrich's competitive activity or his employment with any other entity. The prayer for relief contains no request that this Court enforce the non-competition clause of the Employment Agreement against Aldrich. The operative factual basis for the breach of contract claim is Aldrich's violation of Section 9.4 — the indefinite confidentiality obligation — and his unauthorized disclosure of trade secrets and proprietary information to a direct competitor.

F. Aldrich's Motion to Strike

On or about February 15, 2023, Aldrich filed the instant Motion to Strike, seeking to excise from the Cross-Complaint all references to Section 9.1 of the Employment Agreement. Aldrich argues that the non-competition clause is void and unenforceable under California Business and Professions Code Section 16600, and that any reference to this provision in AMA's pleading constitutes an improper attempt to enforce an illegal restraint on trade. Aldrich contends that the mere inclusion of references to the non-compete in the Cross-Complaint is intended to chill his employment rights and that the Court should strike every mention of Section 9.1 from the pleading.

As set forth below, the Motion to Strike should be denied.

III. LEGAL STANDARD

Under California Code of Civil Procedure Section 436, a court may, upon a motion made pursuant to Section 435, or at any time in its discretion:

"(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court."

(Code Civ. Proc., § 436, subds. (a)-(b).)

A motion to strike is a limited procedural remedy. It is not designed to serve as a substitute for a demurrer, and it should not be used to test the legal sufficiency of individual factual allegations that provide context for properly pled causes of action. As the Court of Appeal explained in PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683, a motion to strike should not be employed to challenge allegations that are relevant to the overall dispute. Rather, the motion to strike is properly directed at matter that is entirely "irrelevant" — that is, matter that has no bearing whatsoever on the claims or defenses at issue — or at matter that is "improper" or "not drawn or filed in conformity with the laws of this state."

The standard for irrelevance in the motion to strike context is not coextensive with the rules of evidence governing admissibility at trial. At the pleading stage, factual allegations are considered relevant if they bear a reasonable relationship to any properly pled cause of action or defense. (See Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [allegations should not be stricken unless they are "so clearly and obviously irrelevant" that they have no possible relationship to any claim or defense]; Warren v. Atchison, Topeka & Santa Fe Ry. Co. (1971) 19 Cal.App.3d 24, 34-35 [motions to strike should be denied where the matter "might be important" to the action].)

Where challenged allegations provide factual context for properly pled causes of action, or where they are relevant to establish an element of a claim — such as knowledge, intent, or the reasonableness of a party's conduct — the court should deny the motion to strike. The appropriate vehicle for challenging the legal sufficiency of a cause of action is a demurrer, not a motion to strike individual paragraphs.

IV. ARGUMENT

A. AMA's Cross-Complaint Does Not Seek to Enforce the Non-Compete

The fundamental flaw in Aldrich's Motion to Strike is its conflation of two distinct concepts: references to Section 9.1 and enforcement of Section 9.1. These are not the same thing, and the distinction is dispositive.

AMA's Cross-Complaint asserts four causes of action: breach of the Employment Agreement, misappropriation of trade secrets under CUTSA, breach of fiduciary duty, and conversion. While Section 9.1 is referenced in the caption of the First Cause of Action (breach of the Employment Agreement), and while Section 9.1 is discussed in the factual allegations as part of the broader restrictive covenant framework established in Section 9 of the Employment Agreement, the operative factual basis for the breach of contract claim is Aldrich's violation of Section 9.4 — the confidentiality provision. Specifically, the breach of contract claim is grounded in Aldrich's unauthorized transmission of proprietary show format bibles, pilot sizzle reels, and the Summit Challenge revenue model to his personal email account and to Halcyon Creek Productions LLC, a direct competitor.

A review of the Cross-Complaint's prayer for relief confirms that AMA does not seek to enforce the non-competition clause. Nowhere in the prayer for relief does AMA request injunctive relief preventing Aldrich from competing with AMA or from working in the unscripted television industry. Nowhere does AMA seek monetary damages calculated by reference to Section 9.1 — for example, damages measured by the profits Aldrich allegedly earned or may earn from employment with a competing enterprise. The Cross-Complaint simply does not contain a claim for enforcement of the non-compete.

Aldrich's motion proceeds as if any mention of Section 9.1 in any pleading, regardless of context or purpose, constitutes an attempt to enforce the non-compete. That is not the law. A party is entitled to reference a contractual provision in a pleading for purposes other than enforcement — including, as discussed in Section IV.B below, to provide factual context for other claims, to establish the existence of a comprehensive restrictive covenant framework, and to demonstrate the plaintiff's knowledge of his obligations. Striking such references would be tantamount to requiring AMA to present its factual narrative with critical pieces missing — a result that the motion to strike procedure was never intended to produce.

AMA recognizes, however, that the inclusion of Section 9.1 in the caption of the First Cause of Action may create an impression that AMA intends to seek enforcement of the non-compete as an independent basis for relief. AMA is prepared to address this concern. As set forth in greater detail in Section IV.D below, AMA is willing to file an Amended Cross-Complaint that removes Section 9.1 from the caption of the First Cause of Action and adds a clear disclaimer that AMA does not seek injunctive or monetary relief based on enforcement of the non-competition clause. This concession should resolve Aldrich's stated concern while preserving AMA's right to reference the broader restrictive covenant framework for legitimate evidentiary purposes.

B. References to § 9.1 Are Relevant to AMA's Properly Pled Claims

Even if the Court were to accept Aldrich's premise that Section 9.1 is void under California Business and Professions Code Section 16600, the references to Section 9.1 in the Cross-Complaint should not be stricken because they are relevant to multiple properly pled causes of action. AMA submits that the references to Section 9.1 serve at least three distinct evidentiary purposes, each of which is discussed below.

1. Aldrich's Knowledge and Intent

The existence and scope of the restrictive covenant provisions in Section 9 of the Employment Agreement — including Section 9.1 — are probative of Aldrich's knowledge and intent at the time of the alleged misappropriation of trade secrets and confidential information.

Aldrich was indisputably aware that his Employment Agreement contained broad restrictive covenants, including a non-competition clause that prohibited him from working for any entity deriving twenty-five percent or more of its revenue from unscripted or reality television production. He was aware that the same section of the same agreement contained an indefinite confidentiality obligation protecting precisely the categories of information that he transmitted to Halcyon Creek Productions LLC. His decision to transmit proprietary materials — including show format bibles, sizzle reels, and a $42 million franchise revenue model — to a direct competitor, while still employed by AMA and bound by these covenants, demonstrates that he acted with full awareness that his conduct violated his contractual obligations. The restrictive covenant framework as a whole — not Section 9.4 read in clinical isolation from the rest of Section 9 — establishes the context in which Aldrich understood his obligations to AMA.

This evidence is directly relevant to at least three of AMA's causes of action:

Willful Breach of Section 9.4 (Confidentiality). The breadth of the restrictive covenant framework within which the confidentiality obligation was embedded — including the non-compete — is relevant to demonstrate that Aldrich understood the comprehensive nature of his post-termination obligations and knowingly violated them. A person who transmits proprietary materials to a competitor while subject to a non-competition clause, an employee non-solicitation clause, a client non-solicitation clause, and a confidentiality clause cannot credibly claim that he was unaware that his conduct was improper. The existence of Section 9.1 contributes to the mosaic of evidence establishing willfulness.

Willful and Malicious Misappropriation Under CUTSA. Under California Civil Code Section 3426.3, a court may award exemplary damages in an amount not exceeding twice the compensatory damages if "willful and malicious misappropriation" is established. The existence of the restrictive covenant framework — including the non-compete — is probative of Aldrich's subjective awareness that the information he was transmitting was protected and that his conduct was wrongful. This evidence bears directly on the "willful and malicious" standard for exemplary damages.

Breach of Fiduciary Duty. As a senior officer of AMA, Aldrich owed fiduciary duties of loyalty and care. His knowledge that the Employment Agreement contained comprehensive restrictive covenants — underscoring the sensitivity of the information entrusted to him — is relevant to establish the scope of his fiduciary obligations and the egregiousness of his breach.

Striking all references to Section 9.1 would deprive AMA of significant contextual evidence relevant to knowledge and intent — evidence that is not being offered to enforce the non-compete but to illuminate the circumstances under which the alleged misappropriation and breach of confidentiality occurred.

2. AMA's Trade Secret Protection Efforts (CUTSA Element)

Under CUTSA, a plaintiff asserting a claim for misappropriation of trade secrets must demonstrate, as an element of its prima facie case, that it took "efforts that are reasonable under the circumstances to maintain [the] secrecy" of the trade secret. (Cal. Civ. Code, § 3426.1, subd. (d)(2).) This element requires the plaintiff to show that it implemented a program of measures designed to protect the confidentiality of the information at issue.

The restrictive covenant provisions in Section 9 of the Employment Agreement — including the non-compete (Section 9.1), the employee non-solicitation clause (Section 9.2), the business relationship non-solicitation clause (Section 9.3), and the confidentiality obligation (Section 9.4) — collectively constitute a critical component of AMA's overall trade secret protection program. The comprehensive nature of the restrictive covenant framework demonstrates that AMA took the protection of its proprietary information seriously and implemented multiple overlapping contractual safeguards to prevent the unauthorized disclosure, use, and exploitation of its trade secrets.

Even if Section 9.1 is unenforceable on its own terms under California Business and Professions Code Section 16600, its existence in the Employment Agreement is independently relevant to demonstrate AMA's intent and efforts to protect confidential information. The question before the trier of fact on the "reasonable efforts" element is not whether every individual protective measure adopted by AMA is independently enforceable, but whether AMA's overall program of trade secret protection was reasonable under the circumstances. The inclusion of a non-competition clause in the Employment Agreement — alongside a confidentiality clause, an employee non-solicitation clause, and a business non-solicitation clause — is evidence that AMA's protective efforts were comprehensive and robust, regardless of whether each individual clause is ultimately enforceable as a matter of law.

California courts have recognized that evidence of restrictive covenants is relevant and admissible in trade secret cases for this limited purpose. In FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1278, the Court of Appeal held that evidence of restrictive covenants, including non-competition agreements, is relevant to demonstrate an employer's reasonable efforts to maintain the secrecy of trade secret information, irrespective of the independent enforceability of those covenants. The court recognized that the existence of such agreements forms part of the totality of circumstances that the trier of fact must evaluate in determining whether the trade secret holder acted reasonably.

Striking all references to Section 9.1 from the Cross-Complaint would deprive AMA of the ability to present its complete trade secret protection program to the trier of fact. AMA would be forced to describe its restrictive covenant framework with a conspicuous gap — referencing Sections 9.2, 9.3, and 9.4 while omitting Section 9.1 — creating a misleading and incomplete picture of the measures AMA took to protect its proprietary information. This is precisely the type of prejudice that the relevance standard is designed to prevent.

3. Aldrich's Own Declaratory Relief Claim

There is an additional, independent reason why references to Section 9.1 should not be stricken from the Cross-Complaint: Aldrich himself has placed the enforceability of the restrictive covenants squarely at issue in this litigation.

In his Fourth Cause of Action, Aldrich seeks declaratory relief, asking this Court to declare that Sections 9.1, 9.2, and 9.3 of the Employment Agreement are void and unenforceable under California Business and Professions Code Section 16600. By asserting this claim, Aldrich has affirmatively injected the enforceability of Section 9.1 into the litigation. The provision is not merely relevant to the dispute; it is the subject of a pending claim for judicial declaration.

It would be incongruous — indeed, fundamentally unfair — for Aldrich to challenge the enforceability of Section 9.1 in his own Complaint while simultaneously seeking to prevent AMA from even referencing Section 9.1 in its Cross-Complaint. AMA is entitled to reference and respond to the provisions that Aldrich has placed at issue. AMA's factual allegations regarding Section 9.1 provide necessary context for AMA's response to Aldrich's declaratory relief claim and for AMA's broader defense of the restrictive covenant framework.

To grant the Motion to Strike in these circumstances would produce the absurd result of a litigation in which one party has affirmatively asked the Court to adjudicate the enforceability of a contractual provision while the other party is prohibited from even mentioning that provision in its own pleading. No authority supports such a result, and Aldrich cites none.

C. A Motion to Strike Is Not the Appropriate Vehicle

Quite apart from the merits, Aldrich's Motion to Strike is procedurally improper because a motion to strike is not the appropriate vehicle for the relief Aldrich seeks.

Under Code of Civil Procedure Section 436, a motion to strike is limited to excising "irrelevant, false, or improper matter" from a pleading or striking matter "not drawn or filed in conformity with the laws of this state." As set forth in Section III above, the standard for irrelevance in the motion to strike context requires that the challenged matter have no possible relationship to any claim or defense. Factual allegations that provide context for properly pled causes of action are not "irrelevant" merely because they reference a contractual provision that may be unenforceable.

The Court of Appeal's decision in PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683 is directly on point. In PH II, the Court held that a motion to strike is not a substitute for a demurrer and should not be used to test the merits of individual factual allegations where those allegations are relevant to properly pled claims or defenses. The motion to strike is a "drastic" remedy that should be employed sparingly and only where the challenged matter is clearly and unambiguously irrelevant or improper. (See also Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1281 [motions to strike are disfavored and should be denied where reasonable doubt exists as to the relevance of the challenged matter].)

If Aldrich believes that AMA's First Cause of Action improperly attempts to enforce an unenforceable non-competition clause, the appropriate remedy is a demurrer to that cause of action — not a motion to strike individual factual paragraphs that provide context for multiple properly pled causes of action. A demurrer would test the legal sufficiency of the breach of contract claim and would allow the Court to determine whether the First Cause of Action states facts sufficient to constitute a cause of action, taking into account any enforceability challenges to Section 9.1. A motion to strike individual factual allegations, by contrast, is a blunt instrument that risks depriving AMA of relevant factual context for its trade secret, fiduciary duty, and conversion claims — claims that are entirely independent of Section 9.1's enforceability.

AMA's Second Cause of Action (misappropriation of trade secrets under CUTSA), Third Cause of Action (breach of fiduciary duty), and Fourth Cause of Action (conversion) are entirely independent of Section 9.1 and are properly pled regardless of whether the non-competition clause is enforceable. References to the broader restrictive covenant framework — including Section 9.1 — remain relevant to these claims for the reasons discussed in Section IV.B above. Striking factual allegations that bear on multiple causes of action, solely because one of those causes of action may face an enforceability challenge, is precisely the type of overbroad remedy that the PH II court cautioned against.

D. AMA's Alternative Proposal Resolves Aldrich's Concerns Without Court Intervention

AMA takes seriously Aldrich's concern that the Cross-Complaint not be used as a vehicle to chill his employment rights under California law. While AMA maintains that the Motion to Strike should be denied for the reasons set forth above, AMA recognizes the value of judicial economy and is prepared to offer an alternative resolution that addresses Aldrich's legitimate concerns without requiring the Court to adjudicate the enforceability of Section 9.1 at the pleading stage.

Specifically, AMA offers to file an Amended Cross-Complaint incorporating the following modifications:

(1) Removal of § 9.1 from Caption of First Cause of Action. AMA will remove Section 9.1 from the caption of the First Cause of Action (breach of Employment Agreement). The amended caption will reference only Sections 9.2, 9.3, and 9.4, thereby eliminating any suggestion that AMA is asserting a standalone breach of contract claim based on the non-competition clause.

(2) Express Disclaimer. AMA will add an express disclaimer to the Cross-Complaint, in the body of the factual allegations and in the prayer for relief, clarifying that AMA does not seek injunctive or monetary relief based on enforcement of Section 9.1 (the non-competition clause) and acknowledging that the enforceability of Section 9.1 under California law is contested.

(3) Retention of Contextual References. AMA will retain references to Section 9.1 solely as factual context relevant to AMA's Section 9.4 confidentiality claim, CUTSA trade secret claim, and breach of fiduciary duty claim — specifically, to demonstrate AMA's comprehensive trade secret protection efforts and Aldrich's knowledge and awareness of his contractual obligations at the time of the alleged misappropriation. These references will be clearly framed as contextual and evidentiary, not as a basis for independent relief.

This proposal eliminates any risk that AMA will use the Cross-Complaint to enforce the non-competition clause — a result that AMA does not seek in any event — while preserving AMA's right to present relevant evidence in support of its properly pled claims. It provides Aldrich with the practical relief he seeks (no enforcement of the non-compete) without requiring the Court to strike factual allegations that are relevant to multiple causes of action.

AMA tendered this proposal to Aldrich's counsel, Cameron Whitfield of Whitfield & Associates, by letter dated February 22, 2023, with a copy of the proposed amended language attached. As of the date of this filing — March 1, 2023 — Aldrich's counsel has not responded to the proposal. AMA's willingness to amend remains open, and AMA respectfully requests that, should the Court have any concerns about the current framing of the Cross-Complaint, the Court grant leave to amend rather than striking the challenged allegations outright.

V. CONCLUSION

For the foregoing reasons, Defendant and Cross-Complainant Aurelius Media Americas Inc. respectfully requests that this Court deny Plaintiff Gavin Aldrich's Motion to Strike in its entirety.

AMA's Cross-Complaint does not seek to enforce the non-competition clause set forth in Section 9.1 of the Employment Agreement. It does not seek injunctive relief preventing Aldrich from competing with AMA, nor does it seek monetary damages measured by Aldrich's competitive activity. The references to Section 9.1 in the Cross-Complaint serve legitimate evidentiary purposes: they are relevant to establish Aldrich's knowledge and intent at the time of the alleged misappropriation of trade secrets and breach of confidentiality; they are relevant to demonstrate AMA's reasonable efforts to maintain the secrecy of its trade secrets, as required under CUTSA; and they are responsive to Aldrich's own declaratory relief claim challenging the enforceability of Section 9.1. A motion to strike is not the appropriate procedural vehicle to challenge factual allegations that provide context for multiple properly pled causes of action, and Aldrich's motion should be denied.

In the alternative, should the Court conclude that any aspect of the Cross-Complaint's current framing is objectionable, AMA respectfully requests leave to amend the Cross-Complaint consistent with the proposal described in Section IV.D above — removing Section 9.1 from the caption of the First Cause of Action, adding an express disclaimer that AMA does not seek to enforce the non-compete, and retaining references to Section 9.1 solely as factual context for AMA's confidentiality, trade secret, and fiduciary duty claims.

Dated: March 1, 2023

CALDERWOOD & HARKNESS LLP

By: ________

Renata Vasquez (SBN 224578)

CALDERWOOD & HARKNESS LLP 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 and Cross-Complainant 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 eighteen (18) and not a party to the within action. My business address is 777 South Flower Street, Suite 4200, Los Angeles, California 90017.

On March 1, 2023, I served the foregoing document described as:

DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC.'S OPPOSITION TO PLAINTIFF'S MOTION TO STRIKE ALLEGATIONS RELATING TO NON-COMPETE CLAUSE FROM CROSS-COMPLAINT

on the interested parties in this action by the following means:

BY ELECTRONIC SERVICE: By transmitting a true and correct copy of the foregoing document via the Court's electronic filing and service system to the following parties' counsel of record, in compliance with California Rules of Court, rule 2.251, at the electronic service addresses on file with the Court:

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

Email: cwhitfield@whitfieldlaw.com

Email: jnazarian@whitfieldlaw.com

Attorneys for Plaintiff Gavin Aldrich

BY U.S. MAIL: By placing a true and correct copy of the foregoing document in a sealed envelope, with postage thereon fully prepaid, in the United States mail at Los Angeles, California, addressed as set forth above.

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

Executed on March 1, 2023, at Los Angeles, California.

________________________________________

Jessica M. Torres

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

Hon. Catherine Villanueva, Dept. 52

DEFENDANT AND CROSS-COMPLAINANT

AURELIUS MEDIA AMERICAS INC.,

OPPOSITION TO PLAINTIFF'S MOTION

Defendant and Cross-Complainant.

TO NON-COMPETE CLAUSE FROM

CROSS-COMPLAINT

Hearing Date: March 22, 2023

Time: 8:30 a.m.

Dept.: 52

Filed: March 1, 2023

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
I. INTRODUCTION
Plaintiff Gavin Aldrich ("Aldrich") moves to strike from the Cross-Complaint of Defendant and Cross-Complainant Aurelius Media Americas Inc. ("AMA") all references to and allegations based upon Section 9.1 of the parties' Employment Agreement — an eighteen-month post-termination non-competition clause — on the ground that such non-competition provision is void and unenforceable under California Business and Professions Code Section 16600. Aldrich contends that the mere presence of references to this clause in AMA's Cross-Complaint constitutes an improper attempt to enforce an illegal restraint on trade and that all such references must be excised from the pleading.
While AMA acknowledges that the enforceability of Section 9.1 under California law is subject to serious challenge, and while AMA does not intend to press this Court to enforce the non-competition clause against Aldrich as a standalone obligation, Aldrich's Motion to Strike should be denied for three independent reasons.
First, AMA's Cross-Complaint does not seek to enforce Section 9.1 as a standalone cause of action, nor does it seek injunctive relief preventing Aldrich from competing in the unscripted television industry or from accepting employment with any particular entity. The prayer for relief in the Cross-Complaint contains no request for enforcement of the non-competition clause, no request for an injunction barring Aldrich from working, and no claim for damages measured by Aldrich's alleged competitive activity. The operative factual basis for AMA's breach of contract claim is Aldrich's violation of Section 9.4 — the confidentiality provision — through his unauthorized transmission of proprietary show format bibles, pilot sizzle reels, and a detailed revenue model to a direct competitor.
Second, the references to Section 9.1 in the Cross-Complaint are relevant factual context for AMA's properly pled causes of action. Under the California Uniform Trade Secrets Act ("CUTSA"), AMA must demonstrate that it took reasonable efforts to maintain the secrecy of its trade secrets. The existence of the restrictive covenant framework — including Section 9.1 — is probative of AMA's trade secret protection program. The references are also relevant to establish Aldrich's knowledge and intent at the time he transmitted proprietary materials to Halcyon Creek Productions LLC, a direct competitor. These are legitimate evidentiary purposes entirely distinct from enforcement of the non-compete.
Third, striking factual allegations at the pleading stage is inappropriate where, as here, the allegations are relevant to the overall dispute and provide necessary context for multiple properly pled causes of action. A motion to strike is a narrow remedy under Code of Civil Procedure Section 436 and is not a substitute for a demurrer. If Aldrich's concern is that the First Cause of Action improperly rests on an unenforceable contractual provision, the appropriate remedy is a demurrer directed at that cause of action — not a motion to excise factual paragraphs that bear on AMA's trade secret, fiduciary duty, and confidentiality claims.
In the interest of judicial economy and in recognition of Aldrich's legitimate concern that the pleadings not be used as a vehicle to chill his employment rights under California law, AMA offers an alternative resolution. AMA is prepared to file an Amended Cross-Complaint that removes Section 9.1 from the caption of the First Cause of Action and adds an express disclaimer that AMA does not seek injunctive or monetary relief based on enforcement of the non-competition clause, while retaining references to Section 9.1 solely as factual context relevant to AMA's confidentiality, trade secret, and fiduciary duty claims. AMA tendered this proposal to Aldrich's counsel on February 22, 2023, and has received no response.
For the reasons set forth below, the Court should deny the Motion to Strike in its entirety, or, in the alternative, grant AMA leave to amend its Cross-Complaint consistent with the proposal described herein.
II. BACKGROUND
A. The Parties
AMA is a Delaware corporation, qualified to do business in California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC ("AGMG"), a public limited company organized under the laws of England and Wales and headquartered at 34 Kingsway, London WC2B 6EX, United Kingdom. AGMG is publicly traded on the London Stock Exchange and maintains production operations in seventeen countries.
AMA's domestic operations are substantial. The company employs approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California. AMA operates seven production facilities and fourteen show units within the State of California, producing and distributing unscripted and reality television programming for major broadcast and streaming networks. AMA's programming portfolio includes several widely recognized unscripted franchises, including "Summit Challenge," which generates approximately $42 million in annual revenue for the company and has been renewed for eleven consecutive seasons.
Plaintiff Gavin Aldrich was employed by AMA from September 5, 2017 through October 14, 2022 — a period of approximately five years. Over the course of his tenure, Aldrich rose to the position of Senior Vice President of Original Content & Executive Producer, a senior leadership role in which he reported directly to AMA President Jonathan Mercer. At the time of his termination, Aldrich's base salary was $485,000 per year. He was also eligible for a discretionary annual bonus, which most recently totaled $225,000 for fiscal year 2021. In addition, Aldrich held 42,500 AGMG restricted stock units ("RSUs"), of which 15,300 remained unvested at the time of his termination. In his capacity as Senior Vice President of Original Content, Aldrich had access to AMA's most sensitive proprietary information, including show format bibles, pilot scripts and sizzle reels, audience analytics, revenue projections, talent deal terms, and strategic development plans.
B. The Employment Agreement and Restrictive Covenant Provisions
Aldrich's employment with AMA was governed by a written Employment Agreement, originally executed on September 5, 2017, and subsequently amended on August 1, 2020 (collectively, the "Employment Agreement"). The Employment Agreement is a comprehensive document that addresses, among other things, Aldrich's duties and reporting structure, compensation and benefits, grounds for termination, post-termination obligations, and restrictive covenants.
Section 9 of the Employment Agreement contains four distinct restrictive covenant provisions, each addressing a different aspect of Aldrich's post-termination obligations:
Section 9.1 — Non-Competition. Section 9.1 provides for an eighteen-month post-termination non-competition period during which Aldrich is prohibited from working for any "Competing Enterprise," defined as any entity deriving twenty-five percent (25%) or more of its revenue from the production, licensing, or distribution of unscripted or reality television content in North America. The provision applies regardless of the basis for termination.
Section 9.2 — Non-Solicitation of Employees. Section 9.2 imposes a twenty-four-month post-termination restriction prohibiting Aldrich from directly or indirectly soliciting, recruiting, or inducing any AMA employee with whom Aldrich worked within the twelve months preceding his termination to leave AMA's employ or to accept employment with any other person or entity.
Section 9.3 — Non-Solicitation of Business Relationships. Section 9.3 imposes a twenty-four-month post-termination restriction prohibiting Aldrich from directly or indirectly soliciting, diverting, or interfering with any network, platform, or advertiser client of AMA with whom Aldrich had material contact during the twenty-four months preceding his termination.
Section 9.4 — Confidentiality. Section 9.4 is an indefinite confidentiality obligation that prohibits Aldrich from disclosing, using, or otherwise exploiting AMA's proprietary information. The provision defines "Confidential Information" broadly to include proprietary content, show formats, show format bibles, pilot scripts, sizzle reels, audience analytics, revenue data, talent agreements, strategic plans, and all other information designated as confidential by the Company. Unlike Sections 9.1 through 9.3, the confidentiality obligation under Section 9.4 has no temporal limitation and survives the termination of the Employment Agreement indefinitely.
The Employment Agreement also contains a choice-of-law provision at Section 14.3, which provides that the Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts-of-law principles. The interplay between this choice-of-law provision and California's strong public policy against non-competition agreements is, of course, a significant issue in this litigation, but it is not directly before the Court on the instant motion and need not be resolved here.
C. Aldrich's Termination
AMA terminated Aldrich's employment "for cause" on October 14, 2022, pursuant to Section 7.2(b) of the Employment Agreement. The termination was based on two independent grounds.
First — Unauthorized Transmission of Confidential Information. In August 2022, AMA's Information Technology security team initiated a routine data loss prevention ("DLP") audit of outbound email traffic from senior personnel. The audit revealed that, over a fourteen-month period from approximately July 2021 through September 2022, Aldrich had forwarded approximately 340 emails containing proprietary information to his personal email account at galdrich.private@Northgate Software.com. The forwarded materials included show concepts, pilot scripts, audience analytics reports, revenue projections, and talent deal terms — precisely the categories of information protected by Section 9.4 of the Employment Agreement.
More critically, forensic analysis conducted by AMA's IT security team in September and October 2022 further revealed that Aldrich had transmitted three complete unscripted show format bibles — for programs internally designated "Apex Endurance," "The Remix," and "Untamed West" — as well as two pilot sizzle reels and a detailed revenue model for AMA's top-performing franchise "Summit Challenge" to an external email address: info@halcyoncreekprod.com. That email address belongs to Halcyon Creek Productions LLC, a California-based production company that operates as a direct competitor to AMA in the unscripted and reality television space. Halcyon Creek is owned and operated by Nina Castellanos, a former business associate of Aldrich who previously worked at AMA in a production capacity before departing in 2019.
The Summit Challenge revenue model transmitted by Aldrich to Halcyon Creek Productions contained granular financial data for a franchise generating approximately $42 million in annual revenue for AMA, including per-episode production costs, network license fees, international distribution revenue breakdowns, advertising revenue-share arrangements, and multi-year renewal projections. This information is among the most commercially sensitive data in AMA's possession.
Second — Insubordination. Separately, in September 2022, AMA President Jonathan Mercer issued a restructuring directive that would have reorganized certain production units under a consolidated management structure. Aldrich refused to implement the directive, characterizing it in a written email as "creatively bankrupt and commercially idiotic." Aldrich then disseminated his refusal email to six of his direct subordinates, undermining Mercer's authority and the company's management hierarchy.
It is also relevant to note that Aldrich signed AMA's Acceptable Use and Confidentiality Policy on April 12, 2021. That policy expressly prohibits the transmission of Company proprietary information to personal email accounts or to any non-Company-approved third-party recipients. Aldrich acknowledged in his signed attestation that he had read, understood, and agreed to comply with the policy.
D. Aldrich's Complaint
Aldrich filed the instant complaint on December 9, 2022, initiating Case Number 22STCV41087. The Complaint asserts five causes of action:
(1) Wrongful Termination in Violation of Public Policy, alleging that AMA's stated grounds for termination were pretextual and that the true reason for Aldrich's termination was his opposition to the restructuring directive, which he characterizes as protected activity;
(2) Breach of Contract, contesting AMA's designation of the termination as "for cause" and seeking payment of severance ($970,000, representing two years' base salary), a pro-rata bonus for fiscal year 2022 ($168,750), and acceleration of the 15,300 unvested AGMG restricted stock units (valued at approximately $332,200 based on the closing price of AGMG shares on the termination date);
(3) Breach of the Implied Covenant of Good Faith and Fair Dealing, alleging that AMA acted in bad faith by manufacturing a "for cause" termination to avoid paying severance and accelerating Aldrich's RSUs;
(4) Declaratory Relief Regarding the Enforceability of the Restrictive Covenants, seeking a judicial declaration that Sections 9.1, 9.2, and 9.3 of the Employment Agreement are void and unenforceable under California Business and Professions Code Section 16600; and
(5) Violation of California Labor Code Section 2802, seeking reimbursement of $28,400 in allegedly unreimbursed business expenses.
Aldrich's aggregate demand across all causes of action is approximately $4,150,000. Aldrich is represented by Cameron Whitfield and Julia Nazarian of Whitfield & Associates, 9465 Wilshire Boulevard, Suite 320, Beverly Hills, California 90212.
E. AMA's Cross-Complaint
On January 20, 2023, AMA filed a Cross-Complaint asserting four causes of action against Aldrich:
(1) Breach of Employment Agreement (§§ 9.1, 9.2, 9.3, 9.4). This cause of action is based on Aldrich's unauthorized transmission of confidential information in violation of the confidentiality provisions and the broader restrictive covenant framework established in Section 9 of the Employment Agreement. The operative factual basis for this claim is Aldrich's violation of Section 9.4 — the confidentiality provision — through the unauthorized transmission of proprietary materials to his personal email account and to Halcyon Creek Productions LLC.
(2) Misappropriation of Trade Secrets (Cal. Civ. Code § 3426 *et seq.* — CUTSA). AMA alleges that the show format bibles for "Apex Endurance," "The Remix," and "Untamed West," the two pilot sizzle reels, and the Summit Challenge revenue model constitute trade secrets within the meaning of CUTSA, and that Aldrich's unauthorized transmission of these materials to Halcyon Creek Productions LLC constitutes misappropriation. AMA seeks both compensatory damages and, on the basis that the misappropriation was willful and malicious, exemplary damages pursuant to Civil Code Section 3426.3.
(3) Breach of Fiduciary Duty. As Senior Vice President of Original Content & Executive Producer, Aldrich occupied a position of trust and confidence within AMA and owed fiduciary duties of loyalty and care to the company. His unauthorized disclosure of confidential and proprietary information to a direct competitor — while still employed by AMA and receiving the full benefits of his compensation package — constituted a breach of those fiduciary duties.
(4) Conversion. Aldrich's unauthorized appropriation and transmission of AMA's proprietary digital files — including show format bibles, sizzle reels, and detailed revenue models — constitutes the wrongful exercise of dominion over AMA's property, amounting to conversion.
It is critical to note what the Cross-Complaint does not seek. The Cross-Complaint does not seek injunctive relief preventing Aldrich from working in the unscripted television industry or from competing with AMA in any manner. The Cross-Complaint does not seek damages calculated by reference to Aldrich's competitive activity or his employment with any other entity. The prayer for relief contains no request that this Court enforce the non-competition clause of the Employment Agreement against Aldrich. The operative factual basis for the breach of contract claim is Aldrich's violation of Section 9.4 — the indefinite confidentiality obligation — and his unauthorized disclosure of trade secrets and proprietary information to a direct competitor.
F. Aldrich's Motion to Strike
On or about February 15, 2023, Aldrich filed the instant Motion to Strike, seeking to excise from the Cross-Complaint all references to Section 9.1 of the Employment Agreement. Aldrich argues that the non-competition clause is void and unenforceable under California Business and Professions Code Section 16600, and that any reference to this provision in AMA's pleading constitutes an improper attempt to enforce an illegal restraint on trade. Aldrich contends that the mere inclusion of references to the non-compete in the Cross-Complaint is intended to chill his employment rights and that the Court should strike every mention of Section 9.1 from the pleading.
As set forth below, the Motion to Strike should be denied.
III. LEGAL STANDARD
Under California Code of Civil Procedure Section 436, a court may, upon a motion made pursuant to Section 435, or at any time in its discretion:
"(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.
(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court."
(Code Civ. Proc., § 436, subds. (a)-(b).)
A motion to strike is a limited procedural remedy. It is not designed to serve as a substitute for a demurrer, and it should not be used to test the legal sufficiency of individual factual allegations that provide context for properly pled causes of action. As the Court of Appeal explained in PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683, a motion to strike should not be employed to challenge allegations that are relevant to the overall dispute. Rather, the motion to strike is properly directed at matter that is entirely "irrelevant" — that is, matter that has no bearing whatsoever on the claims or defenses at issue — or at matter that is "improper" or "not drawn or filed in conformity with the laws of this state."
The standard for irrelevance in the motion to strike context is not coextensive with the rules of evidence governing admissibility at trial. At the pleading stage, factual allegations are considered relevant if they bear a reasonable relationship to any properly pled cause of action or defense. (See Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [allegations should not be stricken unless they are "so clearly and obviously irrelevant" that they have no possible relationship to any claim or defense]; Warren v. Atchison, Topeka & Santa Fe Ry. Co. (1971) 19 Cal.App.3d 24, 34-35 [motions to strike should be denied where the matter "might be important" to the action].)
Where challenged allegations provide factual context for properly pled causes of action, or where they are relevant to establish an element of a claim — such as knowledge, intent, or the reasonableness of a party's conduct — the court should deny the motion to strike. The appropriate vehicle for challenging the legal sufficiency of a cause of action is a demurrer, not a motion to strike individual paragraphs.
IV. ARGUMENT
A. AMA's Cross-Complaint Does Not Seek to Enforce the Non-Compete
The fundamental flaw in Aldrich's Motion to Strike is its conflation of two distinct concepts: references to Section 9.1 and enforcement of Section 9.1. These are not the same thing, and the distinction is dispositive.
AMA's Cross-Complaint asserts four causes of action: breach of the Employment Agreement, misappropriation of trade secrets under CUTSA, breach of fiduciary duty, and conversion. While Section 9.1 is referenced in the caption of the First Cause of Action (breach of the Employment Agreement), and while Section 9.1 is discussed in the factual allegations as part of the broader restrictive covenant framework established in Section 9 of the Employment Agreement, the operative factual basis for the breach of contract claim is Aldrich's violation of Section 9.4 — the confidentiality provision. Specifically, the breach of contract claim is grounded in Aldrich's unauthorized transmission of proprietary show format bibles, pilot sizzle reels, and the Summit Challenge revenue model to his personal email account and to Halcyon Creek Productions LLC, a direct competitor.
A review of the Cross-Complaint's prayer for relief confirms that AMA does not seek to enforce the non-competition clause. Nowhere in the prayer for relief does AMA request injunctive relief preventing Aldrich from competing with AMA or from working in the unscripted television industry. Nowhere does AMA seek monetary damages calculated by reference to Section 9.1 — for example, damages measured by the profits Aldrich allegedly earned or may earn from employment with a competing enterprise. The Cross-Complaint simply does not contain a claim for enforcement of the non-compete.
Aldrich's motion proceeds as if any mention of Section 9.1 in any pleading, regardless of context or purpose, constitutes an attempt to enforce the non-compete. That is not the law. A party is entitled to reference a contractual provision in a pleading for purposes other than enforcement — including, as discussed in Section IV.B below, to provide factual context for other claims, to establish the existence of a comprehensive restrictive covenant framework, and to demonstrate the plaintiff's knowledge of his obligations. Striking such references would be tantamount to requiring AMA to present its factual narrative with critical pieces missing — a result that the motion to strike procedure was never intended to produce.
AMA recognizes, however, that the inclusion of Section 9.1 in the caption of the First Cause of Action may create an impression that AMA intends to seek enforcement of the non-compete as an independent basis for relief. AMA is prepared to address this concern. As set forth in greater detail in Section IV.D below, AMA is willing to file an Amended Cross-Complaint that removes Section 9.1 from the caption of the First Cause of Action and adds a clear disclaimer that AMA does not seek injunctive or monetary relief based on enforcement of the non-competition clause. This concession should resolve Aldrich's stated concern while preserving AMA's right to reference the broader restrictive covenant framework for legitimate evidentiary purposes.
B. References to § 9.1 Are Relevant to AMA's Properly Pled Claims
Even if the Court were to accept Aldrich's premise that Section 9.1 is void under California Business and Professions Code Section 16600, the references to Section 9.1 in the Cross-Complaint should not be stricken because they are relevant to multiple properly pled causes of action. AMA submits that the references to Section 9.1 serve at least three distinct evidentiary purposes, each of which is discussed below.
1. Aldrich's Knowledge and Intent
The existence and scope of the restrictive covenant provisions in Section 9 of the Employment Agreement — including Section 9.1 — are probative of Aldrich's knowledge and intent at the time of the alleged misappropriation of trade secrets and confidential information.
Aldrich was indisputably aware that his Employment Agreement contained broad restrictive covenants, including a non-competition clause that prohibited him from working for any entity deriving twenty-five percent or more of its revenue from unscripted or reality television production. He was aware that the same section of the same agreement contained an indefinite confidentiality obligation protecting precisely the categories of information that he transmitted to Halcyon Creek Productions LLC. His decision to transmit proprietary materials — including show format bibles, sizzle reels, and a $42 million franchise revenue model — to a direct competitor, while still employed by AMA and bound by these covenants, demonstrates that he acted with full awareness that his conduct violated his contractual obligations. The restrictive covenant framework as a whole — not Section 9.4 read in clinical isolation from the rest of Section 9 — establishes the context in which Aldrich understood his obligations to AMA.
This evidence is directly relevant to at least three of AMA's causes of action:
Willful Breach of Section 9.4 (Confidentiality). The breadth of the restrictive covenant framework within which the confidentiality obligation was embedded — including the non-compete — is relevant to demonstrate that Aldrich understood the comprehensive nature of his post-termination obligations and knowingly violated them. A person who transmits proprietary materials to a competitor while subject to a non-competition clause, an employee non-solicitation clause, a client non-solicitation clause, and a confidentiality clause cannot credibly claim that he was unaware that his conduct was improper. The existence of Section 9.1 contributes to the mosaic of evidence establishing willfulness.
Willful and Malicious Misappropriation Under CUTSA. Under California Civil Code Section 3426.3, a court may award exemplary damages in an amount not exceeding twice the compensatory damages if "willful and malicious misappropriation" is established. The existence of the restrictive covenant framework — including the non-compete — is probative of Aldrich's subjective awareness that the information he was transmitting was protected and that his conduct was wrongful. This evidence bears directly on the "willful and malicious" standard for exemplary damages.
Breach of Fiduciary Duty. As a senior officer of AMA, Aldrich owed fiduciary duties of loyalty and care. His knowledge that the Employment Agreement contained comprehensive restrictive covenants — underscoring the sensitivity of the information entrusted to him — is relevant to establish the scope of his fiduciary obligations and the egregiousness of his breach.
Striking all references to Section 9.1 would deprive AMA of significant contextual evidence relevant to knowledge and intent — evidence that is not being offered to enforce the non-compete but to illuminate the circumstances under which the alleged misappropriation and breach of confidentiality occurred.
2. AMA's Trade Secret Protection Efforts (CUTSA Element)
Under CUTSA, a plaintiff asserting a claim for misappropriation of trade secrets must demonstrate, as an element of its prima facie case, that it took "efforts that are reasonable under the circumstances to maintain [the] secrecy" of the trade secret. (Cal. Civ. Code, § 3426.1, subd. (d)(2).) This element requires the plaintiff to show that it implemented a program of measures designed to protect the confidentiality of the information at issue.
The restrictive covenant provisions in Section 9 of the Employment Agreement — including the non-compete (Section 9.1), the employee non-solicitation clause (Section 9.2), the business relationship non-solicitation clause (Section 9.3), and the confidentiality obligation (Section 9.4) — collectively constitute a critical component of AMA's overall trade secret protection program. The comprehensive nature of the restrictive covenant framework demonstrates that AMA took the protection of its proprietary information seriously and implemented multiple overlapping contractual safeguards to prevent the unauthorized disclosure, use, and exploitation of its trade secrets.
Even if Section 9.1 is unenforceable on its own terms under California Business and Professions Code Section 16600, its existence in the Employment Agreement is independently relevant to demonstrate AMA's intent and efforts to protect confidential information. The question before the trier of fact on the "reasonable efforts" element is not whether every individual protective measure adopted by AMA is independently enforceable, but whether AMA's overall program of trade secret protection was reasonable under the circumstances. The inclusion of a non-competition clause in the Employment Agreement — alongside a confidentiality clause, an employee non-solicitation clause, and a business non-solicitation clause — is evidence that AMA's protective efforts were comprehensive and robust, regardless of whether each individual clause is ultimately enforceable as a matter of law.
California courts have recognized that evidence of restrictive covenants is relevant and admissible in trade secret cases for this limited purpose. In FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1278, the Court of Appeal held that evidence of restrictive covenants, including non-competition agreements, is relevant to demonstrate an employer's reasonable efforts to maintain the secrecy of trade secret information, irrespective of the independent enforceability of those covenants. The court recognized that the existence of such agreements forms part of the totality of circumstances that the trier of fact must evaluate in determining whether the trade secret holder acted reasonably.
Striking all references to Section 9.1 from the Cross-Complaint would deprive AMA of the ability to present its complete trade secret protection program to the trier of fact. AMA would be forced to describe its restrictive covenant framework with a conspicuous gap — referencing Sections 9.2, 9.3, and 9.4 while omitting Section 9.1 — creating a misleading and incomplete picture of the measures AMA took to protect its proprietary information. This is precisely the type of prejudice that the relevance standard is designed to prevent.
3. Aldrich's Own Declaratory Relief Claim
There is an additional, independent reason why references to Section 9.1 should not be stricken from the Cross-Complaint: Aldrich himself has placed the enforceability of the restrictive covenants squarely at issue in this litigation.
In his Fourth Cause of Action, Aldrich seeks declaratory relief, asking this Court to declare that Sections 9.1, 9.2, and 9.3 of the Employment Agreement are void and unenforceable under California Business and Professions Code Section 16600. By asserting this claim, Aldrich has affirmatively injected the enforceability of Section 9.1 into the litigation. The provision is not merely relevant to the dispute; it is the subject of a pending claim for judicial declaration.
It would be incongruous — indeed, fundamentally unfair — for Aldrich to challenge the enforceability of Section 9.1 in his own Complaint while simultaneously seeking to prevent AMA from even referencing Section 9.1 in its Cross-Complaint. AMA is entitled to reference and respond to the provisions that Aldrich has placed at issue. AMA's factual allegations regarding Section 9.1 provide necessary context for AMA's response to Aldrich's declaratory relief claim and for AMA's broader defense of the restrictive covenant framework.
To grant the Motion to Strike in these circumstances would produce the absurd result of a litigation in which one party has affirmatively asked the Court to adjudicate the enforceability of a contractual provision while the other party is prohibited from even mentioning that provision in its own pleading. No authority supports such a result, and Aldrich cites none.
C. A Motion to Strike Is Not the Appropriate Vehicle
Quite apart from the merits, Aldrich's Motion to Strike is procedurally improper because a motion to strike is not the appropriate vehicle for the relief Aldrich seeks.
Under Code of Civil Procedure Section 436, a motion to strike is limited to excising "irrelevant, false, or improper matter" from a pleading or striking matter "not drawn or filed in conformity with the laws of this state." As set forth in Section III above, the standard for irrelevance in the motion to strike context requires that the challenged matter have no possible relationship to any claim or defense. Factual allegations that provide context for properly pled causes of action are not "irrelevant" merely because they reference a contractual provision that may be unenforceable.
The Court of Appeal's decision in PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683 is directly on point. In PH II, the Court held that a motion to strike is not a substitute for a demurrer and should not be used to test the merits of individual factual allegations where those allegations are relevant to properly pled claims or defenses. The motion to strike is a "drastic" remedy that should be employed sparingly and only where the challenged matter is clearly and unambiguously irrelevant or improper. (See also Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1281 [motions to strike are disfavored and should be denied where reasonable doubt exists as to the relevance of the challenged matter].)
If Aldrich believes that AMA's First Cause of Action improperly attempts to enforce an unenforceable non-competition clause, the appropriate remedy is a demurrer to that cause of action — not a motion to strike individual factual paragraphs that provide context for multiple properly pled causes of action. A demurrer would test the legal sufficiency of the breach of contract claim and would allow the Court to determine whether the First Cause of Action states facts sufficient to constitute a cause of action, taking into account any enforceability challenges to Section 9.1. A motion to strike individual factual allegations, by contrast, is a blunt instrument that risks depriving AMA of relevant factual context for its trade secret, fiduciary duty, and conversion claims — claims that are entirely independent of Section 9.1's enforceability.
AMA's Second Cause of Action (misappropriation of trade secrets under CUTSA), Third Cause of Action (breach of fiduciary duty), and Fourth Cause of Action (conversion) are entirely independent of Section 9.1 and are properly pled regardless of whether the non-competition clause is enforceable. References to the broader restrictive covenant framework — including Section 9.1 — remain relevant to these claims for the reasons discussed in Section IV.B above. Striking factual allegations that bear on multiple causes of action, solely because one of those causes of action may face an enforceability challenge, is precisely the type of overbroad remedy that the PH II court cautioned against.
D. AMA's Alternative Proposal Resolves Aldrich's Concerns Without Court Intervention
AMA takes seriously Aldrich's concern that the Cross-Complaint not be used as a vehicle to chill his employment rights under California law. While AMA maintains that the Motion to Strike should be denied for the reasons set forth above, AMA recognizes the value of judicial economy and is prepared to offer an alternative resolution that addresses Aldrich's legitimate concerns without requiring the Court to adjudicate the enforceability of Section 9.1 at the pleading stage.
Specifically, AMA offers to file an Amended Cross-Complaint incorporating the following modifications:
(1) Removal of § 9.1 from Caption of First Cause of Action. AMA will remove Section 9.1 from the caption of the First Cause of Action (breach of Employment Agreement). The amended caption will reference only Sections 9.2, 9.3, and 9.4, thereby eliminating any suggestion that AMA is asserting a standalone breach of contract claim based on the non-competition clause.
(2) Express Disclaimer. AMA will add an express disclaimer to the Cross-Complaint, in the body of the factual allegations and in the prayer for relief, clarifying that AMA does not seek injunctive or monetary relief based on enforcement of Section 9.1 (the non-competition clause) and acknowledging that the enforceability of Section 9.1 under California law is contested.
(3) Retention of Contextual References. AMA will retain references to Section 9.1 solely as factual context relevant to AMA's Section 9.4 confidentiality claim, CUTSA trade secret claim, and breach of fiduciary duty claim — specifically, to demonstrate AMA's comprehensive trade secret protection efforts and Aldrich's knowledge and awareness of his contractual obligations at the time of the alleged misappropriation. These references will be clearly framed as contextual and evidentiary, not as a basis for independent relief.
This proposal eliminates any risk that AMA will use the Cross-Complaint to enforce the non-competition clause — a result that AMA does not seek in any event — while preserving AMA's right to present relevant evidence in support of its properly pled claims. It provides Aldrich with the practical relief he seeks (no enforcement of the non-compete) without requiring the Court to strike factual allegations that are relevant to multiple causes of action.
AMA tendered this proposal to Aldrich's counsel, Cameron Whitfield of Whitfield & Associates, by letter dated February 22, 2023, with a copy of the proposed amended language attached. As of the date of this filing — March 1, 2023 — Aldrich's counsel has not responded to the proposal. AMA's willingness to amend remains open, and AMA respectfully requests that, should the Court have any concerns about the current framing of the Cross-Complaint, the Court grant leave to amend rather than striking the challenged allegations outright.
V. CONCLUSION
For the foregoing reasons, Defendant and Cross-Complainant Aurelius Media Americas Inc. respectfully requests that this Court deny Plaintiff Gavin Aldrich's Motion to Strike in its entirety.
AMA's Cross-Complaint does not seek to enforce the non-competition clause set forth in Section 9.1 of the Employment Agreement. It does not seek injunctive relief preventing Aldrich from competing with AMA, nor does it seek monetary damages measured by Aldrich's competitive activity. The references to Section 9.1 in the Cross-Complaint serve legitimate evidentiary purposes: they are relevant to establish Aldrich's knowledge and intent at the time of the alleged misappropriation of trade secrets and breach of confidentiality; they are relevant to demonstrate AMA's reasonable efforts to maintain the secrecy of its trade secrets, as required under CUTSA; and they are responsive to Aldrich's own declaratory relief claim challenging the enforceability of Section 9.1. A motion to strike is not the appropriate procedural vehicle to challenge factual allegations that provide context for multiple properly pled causes of action, and Aldrich's motion should be denied.
In the alternative, should the Court conclude that any aspect of the Cross-Complaint's current framing is objectionable, AMA respectfully requests leave to amend the Cross-Complaint consistent with the proposal described in Section IV.D above — removing Section 9.1 from the caption of the First Cause of Action, adding an express disclaimer that AMA does not seek to enforce the non-compete, and retaining references to Section 9.1 solely as factual context for AMA's confidentiality, trade secret, and fiduciary duty claims.
Dated: March 1, 2023
CALDERWOOD & HARKNESS LLP
By: ________
Renata Vasquez (SBN 224578)
CALDERWOOD & HARKNESS LLP 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 and Cross-Complainant 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 eighteen (18) and not a party to the within action. My business address is 777 South Flower Street, Suite 4200, Los Angeles, California 90017.
On March 1, 2023, I served the foregoing document described as:
DEFENDANT AND CROSS-COMPLAINANT AURELIUS MEDIA AMERICAS INC.'S OPPOSITION TO PLAINTIFF'S MOTION TO STRIKE ALLEGATIONS RELATING TO NON-COMPETE CLAUSE FROM CROSS-COMPLAINT
on the interested parties in this action by the following means:
BY ELECTRONIC SERVICE: By transmitting a true and correct copy of the foregoing document via the Court's electronic filing and service system to the following parties' counsel of record, in compliance with California Rules of Court, rule 2.251, at the electronic service addresses on file with the Court:
Cameron Whitfield, Esq. Julia Nazarian, Esq. WHITFIELD & ASSOCIATES 9465 Wilshire Boulevard, Suite 320 Beverly Hills, California 90212 Telephone: (310) 555-4100
Email: cwhitfield@whitfieldlaw.com
Email: jnazarian@whitfieldlaw.com
Attorneys for Plaintiff Gavin Aldrich
BY U.S. MAIL: By placing a true and correct copy of the foregoing document in a sealed envelope, with postage thereon fully prepaid, in the United States mail at Los Angeles, California, addressed as set forth above.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Executed on March 1, 2023, at Los Angeles, California.
________________________________________
Jessica M. Torres
GAVIN ALDRICH, | Case No. 22STCV41087
Plaintiff, | Assigned for All Purposes to
Hon. Catherine Villanueva, Dept. 52
v.
DEFENDANT AND CROSS-COMPLAINANT
AURELIUS MEDIA AMERICAS INC., | AURELIUS MEDIA AMERICAS INC.'S
OPPOSITION TO PLAINTIFF'S MOTION
Defendant and Cross-Complainant. | TO STRIKE ALLEGATIONS RELATING
TO NON-COMPETE CLAUSE FROM
CROSS-COMPLAINT
Hearing Date: March 22, 2023
Time: 8:30 a.m.
Dept.: 52
Filed: March 1, 2023