Ixchel Pharma, LLC v. Biogen, Inc., 9 Cal. 5th 1130 (2020)

In this commercial dispute between two companies, the California Supreme Court determined the bounds of a claim for tortious interference of an at-will contract – a holding that has application in the employment context as well. Plaintiff Ixchel Pharma, a biotechnology company, entered into an agreement with Forward Pharma to jointly develop a drug for the treatment of a disorder called Friedreich’s ataxia. Forward subsequently decided to withdraw from the agreement with Ixchel as a result of a settlement Forward had entered into with another biotechnology company (defendant Biogen, Inc.)

The first legal question posed to the California Supreme Court by the Ninth Circuit was whether Ixchel could sue Biogen for tortiously interfering with the at-will contract that existed between Ixchel and Forward in the absence of an independently wrongful act; the second question was whether Cal. Bus. & Prof. Code § 16600 voids a contract by which a business is restrained from engaging in a lawful trade or business with another business. The Supreme Court answered the first question “No”: To state a claim for interference with an at-will contract by a third-party, the plaintiff must allege the defendant engaged in an independently wrongful act. With respect to the second question, the Court held that Section 16600 (“every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void”) does apply to business contracts and that violation of Section 16600 could constitute an independently wrongful act. The Court further held that in the commercial context (as distinguished from the employment context), a “rule of reason” applies to determine the enforceability of a restrictive covenant such as the one at issue in this case.

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Photo of Tony Oncidi Tony Oncidi

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including…

Anthony J. Oncidi is the co-chair of the Labor & Employment Law Department and heads the West Coast Labor & Employment group in the firm’s Los Angeles office.

Tony represents employers and management in all aspects of labor relations and employment law, including litigation and preventive counseling, wage and hour matters, including class actions, wrongful termination, employee discipline, Title VII and the California Fair Employment and Housing Act, executive employment contract disputes, sexual harassment training and investigations, workplace violence, drug testing and privacy issues, Sarbanes-Oxley claims and employee raiding and trade secret protection. A substantial portion of Tony’s practice involves the defense of employers in large class actions, employment discrimination, harassment and wrongful termination litigation in state and federal court as well as arbitration proceedings, including FINRA matters.

Tony is recognized as a leading lawyer by such highly respected publications and organizations as the Los Angeles Daily JournalThe Hollywood Reporter, and Chambers USA, which gives him the highest possible rating (“Band 1”) for Labor & Employment.  According to Chambers USA, clients say Tony is “brilliant at what he does… He is even keeled, has a high emotional IQ, is a great legal writer and orator, and never gives up.” Other clients report:  “Tony has an outstanding reputation” and he is “smart, cost effective and appropriately aggressive.” Tony is hailed as “outstanding,” particularly for his “ability to merge top-shelf lawyerly advice with pragmatic business acumen.” He is highly respected in the industry, with other commentators lauding him as a “phenomenal strategist” and “one of the top employment litigators in the country.”

“Tony is the author of the treatise titled Employment Discrimination Depositions (Juris Pub’g 2020; www.jurispub.com), co-author of Proskauer on Privacy (PLI 2020), and, since 1990, has been a regular columnist for the official publication of the Labor and Employment Law Section of the State Bar of California and the Los Angeles Daily Journal.

Tony has been a featured guest on Fox 11 News and CBS News in Los Angeles. He has been interviewed and quoted by leading national media outlets such as The National Law JournalBloomberg News, The New York Times, and Newsweek and Time magazines. Tony is a frequent speaker on employment law topics for large and small groups of employers and their counsel, including the Society for Human Resource Management (“SHRM”), PIHRA, the National CLE Conference, National Business Institute, the Employment Round Table of Southern California (Board Member), the Council on Education in Management, the Institute for Corporate Counsel, the State Bar of California, the California Continuing Education of the Bar Program and the Los Angeles and Beverly Hills Bar Associations. He has testified as an expert witness regarding wage and hour issues as well as the California Fair Employment and Housing Act and has served as a faculty member of the National Employment Law Institute. He has served as an arbitrator in an employment discrimination matter.

Tony is an appointed Hearing Examiner for the Los Angeles Police Commission Board of Rights and has served as an Adjunct Professor of Law and a guest lecturer at USC Law School and a guest lecturer at UCLA Law School.