Silguero v. Creteguard, Inc.

• Decision Date: 27 October 2010
• Docket Number: No. B215179.,Certified for Partial Publication. ,B215179.
• Citation: 187 Cal.App.4th 60,113 Cal.Rptr.3d 653
• Court: California Court of Appeals Court of Appeals
• Parties: Rosemary SILGUERO, Plaintiff and Appellant, v. CRETEGUARD, INC., et al., Defendants and Respondents.

187 Cal.App.4th 60 113 Cal.Rptr.3d 653 Rosemary SILGUERO, Plaintiff and Appellant, v. CRETEGUARD, INC., et al., Defendants and Respondents. No. B215179. Certified for Partial Publication.^* Court of Appeal, Second District, Division 1, California. July 30, 2010 As Modified on Denial of Rehearing Aug. 16, 2010. Review Denied Oct. 27, 2010.

Law Offices of Lisa L. Maki, Lisa L. Maki and Christina M. Coleman, Los Angeles, for Plaintiff and Appellant.

Walsworth, Franklin, Bevins & McCall, James A. Anton and Joshua R. Dale, Orange, for Defendants and Respondents.

MALLANO, P.J.

This case presents the question of whether a terminated employee working in the area of sales has a viable claim for wrongful termination in violation of public policy under Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 ( Tameny ) against her subsequent employer when the employee's former employer contacts the employee's subsequent employer and informs it that the employee had signed an agreement with the former employer which prohibited the employee "from all sales activities for 18 months following either departure or termination," and the subsequent employer terminated the employee's employment out of "respect and understanding with colleagues in the same industry," notwithstanding its belief that "non-compete clauses are not legally enforceable here in California."

Because of Business and Professions Code section 16600's legislative declaration of California's "settled legislative policy in favor of open competition and employee mobility" ( Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 946, 81 Cal.Rptr.3d 282, 189 P.3d 285 ( Edwards )), we conclude that the employee has a viable Tameny claim.¹ Accordingly, the judgmententered after the trial court sustained without leave to amend the subsequent employer defendants' demurrer to the second amended complaint will be reversed.

BACKGROUND

The operative facts are those alleged in Silguero's second amended complaint (complaint), in which a 10th cause of action for wrongful termination and an 11th cause of action for illegal trade restriction in violation of the Cartwright Act (Bus. & Prof.Code, § 16700 et seq.) are asserted against defendants Creteguard, Inc., Vaporgauge, Inc., Thomas Nucum, and Theodore Nucum (collectively Creteguard).

We deny Creteguard's request, made for the first time on appeal, that judicial notice be taken of portions of Silguero's deposition testimony quoted in Creteguard's respondents' brief. "One of the dangers of winning on demurrer is that you are stuck, on appeal, with your opponent's version of the facts, and those facts can be highly critical of you indeed." ( Kruss v. Booth (2010) 185 Cal.App.4th 699, 728, fn. 36, 111 Cal.Rptr.3d 56.) This is so because "[w]hen reviewing a judgment dismissing a complaint after a successful demurrer, we assume the complaint's properly pleaded or implied factual allegations are true, and we give the complaint a reasonable interpretation, reading it in context." ( Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 320, 25 Cal.Rptr.3d 320, 106 P.3d 976.) The question of the plaintiff's ability to prove the allegations or the possible difficulty in making such proof does not concern the reviewing court. ( Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 496, fn. 2, 229 Cal.Rptr. 456, 723 P.2d 573.) "The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable." ( Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374, 228 Cal.Rptr. 878; see generally Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1568-1570, 8 Cal.Rptr.2d 552.) We thus ignore Creteguard's arguments premised on facts allegedly obtained through discovery but not reflected in the complaint.

The complaint alleged as follows: In 2003, Silguero began employment with Floor Seal Technology, Inc. (FST), as an in-house sales representative where she placed telephone orders for FST's products. In August 2007, FST threatened Silguero with termination unless she signed a confidentiality agreement. FST forced Silguero to sign an agreement which prohibited her "from all sales activities for 18 months following either departure or termination." FST terminated Silguero's employment in October 2007.

Shortly after Silguero's termination by FST, she found employment with Creteguard. FST contacted Creteguard and "requested the cooperation and participation of [Creteguard] in enforcing the confidentiality agreement, including those provisions prohibiting Silguero from all sales activities for18 months following Silguero's departure or termination from FST." In November 2007, Creteguard's chief executive officer, Thomas Nucum, informed Silguero in writing that " 'it has been brought to my attention ... that you have signed a confidentiality/non-compete agreement with your past employer [.] [W]e regret to inform you that[Creteguard] is unable to continue your employment effective today 11/14/07[.] [A]lthough we believe that non-compete clauses are not legally enforceable here in California, [Creteguard] would like to keep the same respect and understanding with colleagues in the same industry.' "

In the 10th cause of action, Silguero alleged that the noncompetition agreement enforced by Creteguard was void pursuant to section 16600, that no statutory exception to section 16600 applied, and that Creteguard's "enforcement and ratification of an illegal and void non-compete agreement ... violated ... the public policy of the State of California." The complaint further stated that "[t]he act by [Creteguard] of terminating Plaintiff's employment in enforcement and ratification of an illegal and void non-compete agreement, pursuant to and at the request of [FST], constitutes an illegal conspiracy against trade" in violation of sections 16720 and 16726 and the public policy of the State of California embodied in those laws.²

In the 11th cause of action, Silguero incorporated all of the above allegations and sought damages under the Cartwright Act against Creteguard.

Silguero also sued FST for, among other things, intentional interference with contract, claiming FST interfered with her contract with Creteguard by successfully enforcing the invalid noncompetition agreement, causing her to be terminated by Creteguard. The parties in their briefs do not tell us the status of that claim and it is not part of this appeal.

Creteguard demurred to the complaint. As to the 10th cause of action, Creteguard argued that "there was no clearly-delineated public policy prohibiting a subsequent employer from honoring a putatively valid non-compete/confidentiality agreement entered into by an employee and a former employer," and that any restraint of trade in this instance was committed by FST. Creteguard concluded that its conduct, "in an abundance of caution," was designed not to invite a lawsuit by FST "for a then- unsettled issue of whether such an agreement was enforceable," and does not give rise to a Tameny claim.

With respect to the 11th cause of action, Creteguard argued, among other things, that Silguero's injury—the loss of a job—is not the sort of injury the Cartwright Act intended to address.

Silguero filed opposition to the demurrer and Creteguard filed a reply. After a hearing the trial court sustained the demurrer without leave to amend. Silguero appealed from the judgment.

Based on allegations in a superseded first amended complaint involving gender and age discrimination under the California Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et seq.), Creteguard argued that it was a prevailing party under FEHA and sought over $50,000 in attorney fees. After opposition and a hearing on the motion, the trial court awarded Creteguard $23,532.50 in attorney fees and costs. Silguero appealed from the order.

DISCUSSION

"When reviewing a judgment dismissing a complaint after the granting of a demurrer without leave to amend, courts must assume the truth of the complaint'sproperly pleaded or implied factual allegations. [Citation.]" ( Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081, 6 Cal.Rptr.3d 457, 79 P.3d 569.) As a demurrer tests the legal sufficiency of a complaint, we review the trial court's ruling independently. ( Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1379, 108 Cal.Rptr.3d 669.)

We conclude that Silguero's complaint alleges facts supporting a Tameny claim for wrongful termination in violation of the public policy in section 16600 prohibiting noncompetition agreements, but not a viable claim under the Cartwright Act.

A. Wrongful Termination ( Tameny Claim)

In Tameny, supra, 27 Cal.3d at page 178, 164 Cal.Rptr. 839, 610 P.2d 1330, the Supreme Court "recognized that although employers have the power to terminate employees at will, they may not terminate an employee for a reason that is contrary to public policy." ( Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1076, 130 Cal.Rptr.2d 892, 63 P.3d 979 ( Little ).) " '[The] public policy exception to the at-will employment rule must be based on policies "carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions...." ' [Citation.] Moreover, the public policy that is the basis for such a claim must be ' " 'public' in that it 'affects society at large' rather than theindividual, must have been articulated at the time of discharge, and must be ' "fundamental" ' and ' "substantial." ' " ' [Citation.] Thus, a legitimate Tameny claim is designed to protect a public interest and therefore ' "cannot be contravened by a private agreement." ' [Citation.]" ( Little, supra, 29 Cal.4th at p. 1077, 130 Cal.Rptr.2d 892, 63 P.3d 979.)

"Courts must determine whether the discharge of the employee 'affects a duty which inures to the benefit of the...