Applied Med. Distribution Corp. v. Jarrells, 2024 WL 1007523 (Cal. Ct. App. 2024)

Stephen Jarrells worked for Applied as a vice president in charge of group purchasing organizations and had previously held other positions during his tenure with the company. When he was hired, Jarrells signed Applied’s proprietary information agreement in which he agreed to hold in “strictest confidence” Applied’s trade secrets and confidential/proprietary information. Shortly before his resignation eight years later, Jarrells created a folder titled “Good Stuff” on the laptop computer supplied to him by Applied, which contained trade secrets and confidential information that belonged to Applied. Jarrells then transferred the contents of the “Good Stuff” folder onto a thumb drive and uploaded that data to a computer issued to him by his new employer, Bruin Biometrics, LLC, one of Applied’s competitors. Then, Jarrells wiped his Applied computer and network drives and returned his Applied computer to Applied.

In the lawsuit that followed, Applied sued Jarrells for misappropriation of trade secrets and breach of the proprietary information agreement. At trial, the jury found Jarrells liable for breach of contract and misappropriation of trade secrets but awarded no damages to Applied on any of its claims. The court issued a permanent injunction against Jarrells and Bruin and awarded Applied $554,000 in attorney’s fees and costs (though Applied had requested over $3.9 million). Both parties appealed. In this opinion, the Court of Appeal held the following: (1) Even though the jury awarded it no damages, Applied prevailed on its misappropriation of trade secrets and breach of contract claims and thus was entitled to a permanent injunction against Jarrells as well as prevailing‑party attorney’s fees; (2) the trial court erred in its assessment and apportionment of fees and costs recoverable by Applied; (3) the trial court erred in excluding from Applied’s damages calculation the fees incurred by Applied’s forensic computer expert; and (4) the trial court erred by granting nonsuit on the issue of whether Jarrells’s conduct in misappropriating trade Applied’s trade secrets was willful and malicious.

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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.