In an aggressive first move, Plaintiffs – two former employees accused of trade secret misappropriation – filed a preemptive suit for declaratory relief and unfair business practices against their former employer, Defendant Chandler Holding’s, Inc., in California Superior Court. Plaintiffs contend that shortly after their resignations from Chandler Holdings, Inc., they received letters from Defendant’s counsel accusing them of “numerous wrongful, illegal, fraudulent and contract breaching actions.” The letters allege that Plaintiffs are wrongfully competing against Defendant and are violating the California Uniform Trade Secrets Act, Economic Espionage Act of 1996 and Securities Exchange Act.

Plaintiffs resigned from their positions on February 1, 2019. They returned the notebook computers issued to them by Defendant. Shortly thereafter, Plaintiffs received the letters described above, which further suggest that Plaintiffs: “(1) solicited employees of Chandler, (2) solicited customers and other “business” relationships of Chandler, and (3) accessed, appropriated, and used Chandler’s property, including trade secrets and confidential information.”

Plaintiffs maintain that they did not take any confidential or proprietary information when they left. They argue that the allegations in Defendant’s letters are unsubstantiated and meritless and that the letters are intended to harass, intimidate, and restrain them from pursuing their livelihood. In addition to seeking declaratory relief to preempt such claims, Plaintiffs also allege that Defendants engaged in unfair business practices. Specifically, Defendants’ actions violated Business and Professions Code § 17200 when, in their letters, Defendant alleged that Plaintiffs were “wrongfully competing against Chandler based on their new employment with their new employer.” Plaintiffs contend that there is no valid or enforceable non-compete between Plaintiffs and Defendant and any employer is free to employ Plaintiffs.

The Complaint was filed on February 15, 2019. We will follow this case closely and report back on how Defendant responds.