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Reeves v. Hanlon

33 Cal. 4th 1140 (2004)

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Reeves v. Hanlon

California Supreme Court

33 Cal. 4th 1140 (2004)

Facts

Attorney Robert L. Reeves and his law firm, Robert L. Reeves & Associates, A Professional Law Corporation (plaintiffs) sued two attorneys who left, Daniel Hanlon and Colin Greene, and their new firm, Hanlon & Greene, A Professional Corporation (defendants). Reeves’s firm specialized in immigration and litigation. Greene had chaired Reeves’s litigation department, and Hanlon had handled over 500 matters. Greene and Hanlon resigned abruptly without notice, leaving no status reports or lists of deadlines in pending cases, and destroyed computer files containing client documents and forms. Hanlon and Greene also cultivated discontent among Reeves’s employees and lured away six at-will employees. In addition, Hanlon and Greene misappropriated information from a list of 2,200 clients and mailed out a letter announcing Hanlon & Greene. Reeves’s firm had already begun using the name Reeves and Hanlon, and the announcement did not say what had happened to Reeves or that his firm still existed. Many clients lacked fluent English and thought Reeves had died or gone out of business. Reeves conducted his own mail campaign to reassure clients his firm could still serve them. Hanlon and Greene also used the data to telephone and solicit numerous clients directly. Reeves lost 144 clients to Hanlon & Greene over the next year and sued alleging multiple causes of action, including interference with employee contracts and misappropriation of trade secrets under the Uniform Trade Secrets Act (UTSA). The trial court awarded Reeves over $182,000 in damages. After the appellate court affirmed, Hanlon and Greene again appealed, specifically disputing whether an employer could recover for interference with at-will-employment contracts by a third party and whether using the client list to send out an announcement violated the UTSA.

Rule of Law

Issue

Holding and Reasoning (Baxter, J.)

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