California Employment Law Update

Tag Archives: fraud

Employee May Recover For Breach Of Contract, But Not For “Theft Of Labor”

Lacagnina v. Comprehend Sys. Inc., 25 Cal. App. 5th 955 (2018) David Lacagnina sued his former employer for fraud, breach of contract, breach of the implied covenant of good faith and fair dealing and “theft of labor by false pretenses” in violation of Cal. Pen. Code §§ 484 and 496.  The jury awarded $556,446 in … Continue Reading

Employees Did Not Violate Federal Statute By Misappropriating Employer’s Computer Data

United States v. Nosal, 676 F.3d 854 (2012) (en banc) In this criminal proceeding brought under the Computer Fraud and Abuse Act (“CFAA”), the United States government filed a 20-count indictment against David Nosal (a former employee of Korn/Ferry International) and his accomplices (also from Korn/Ferry) as a result of their obtaining information from their … Continue Reading

Injunction Upheld Prohibiting Former Employee from Competing

NewLife Sciences, Inc. v. Weinstock, 197 Cal. App. 4th 676 (2011) NewLife terminated the employment of Ronald Weinstock, the purported inventor of a Therapeutic Magnetic Resonance Device (“TMRD”), which NewLife had purchased approximately one year before the termination. In connection with its purchase of the TMRD, NewLife had obtained a non-compete covenant, which prohibited Weinstock … Continue Reading

Employees May Have Committed A Crime By Violating Employer’s Computer Use Policy

U.S. v. Nosal, 642 F.3d 781 (2011) In this criminal proceeding brought under the Computer Fraud and Abuse Act (“CFAA”), the United States government filed a 20-count indictment against David Nosal (a former employee of Korn/Ferry International) and his accomplices (also from Korn/Ferry) as a result of their obtaining information from their employer’s computer system … Continue Reading

Distributor May Have Violated Law By Failing To Provide Detailed Written Contract To Salesperson

Baker v. American Horticulture Supply, Inc., 186 Cal. App. 4th 1059 (2010) Edwin Baker worked as an independent wholesale sales representative for American Horticulture Supply, Inc. (“AHS”). A jury returned verdicts in Baker’s favor on his breach of contract and fraud claims, but the trial court ordered a new trial on the grounds of insufficiency … Continue Reading

Sales Representative’s $480,000 Wrongful Termination Award Is Affirmed

Casella v. SouthWest Dealer Services, 157 Cal. App. 4th 1127 (2007) Zachary Casella was employed as a sales representative for SouthWest Dealer Services, which sells its aftermarket auto products to auto dealerships and helps train auto dealership finance and insurance salespeople on how to promote and sell SouthWest’s products. Casella moved from New York to … Continue Reading

Employer’s Lawsuit Against Employee Who Filed Fraudulent Workers’ Comp Claim Was Properly Dismissed

Leegin Creative Leather Prods., Inc. v. Diaz, 131 Cal. App. 4th 1517 (2005) Leegin Creative Leather Products, Inc. filed a civil fraud complaint against one of its employees after it learned that the employee had filed a false workers’ compensation claim against the company. Leegin alleged that it had been damaged by the filing of … Continue Reading

Employee Who Was Defrauded Into Resigning His Prior Employment Receives $1.1 Million Judgment

Helmer v. Bingham Toyota Isuzu, 129 Cal. App. 4th 1121 (2005) Kevin Helmer alleged that Bingham Toyota Isuzu and Bob Clark, his former supervisor, fraudulently induced him to leave a prior job based on false promises made to him by Clark. A jury awarded Helmer $450,913 in compensatory damages (for future lost income) and $1.5 … Continue Reading

Workers’ Compensation Act Bars Employee’s Malicious Prosecution And Loss Of Consortium Claims

Mosby v. Liberty Mut. Ins. Co., 110 Cal. App. 4th 995 (2003) Freddie Curtis Mosby and his wife Sheri Mosby sued Freddie’s employer, Best Buy, and Best Buy’s workers’ compensation insurance carrier, Liberty Mutual Insurance Company, for malicious prosecution and loss of consortium after Liberty Mutual reported Mosby to the local district attorney for workers’ … Continue Reading

Punitive Damages Award Of 145 Times Compensatory Damages Was Excessive

State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513 (2003) Curtis and Inez Campbell sued their automobile insurance carrier (State Farm) for bad faith, fraud, and intentional infliction of emotional distress after State Farm declined to settle within the $50,000 policy limit a wrongful death and personal injury lawsuit … Continue Reading

Fraud Claims Relating to Employee Stock Options Were Preempted By Federal Law

Falkowski v. Imation Corp., 309 F.3d 1123 (9th Cir. 2002) This class action litigation arose from a merger in which Imation Corporation, a publicly traded company, acquired Cemax-Icon, a closely held company in the medical information management business. A year after the merger, Imation sold the Cemax subsidiary to Eastman Kodak Company. The plaintiffs are … Continue Reading

Company Precluded From Recovering From Bank Following Employee Forgery

Espresso Roma Corp. v. Bank of America, 100 Cal. App. 4th 525 (2002) Espresso Roma Corporation suffered losses of more than $330,000 when its former bookkeeper stole blank company checks, forged signatures and used the checks to pay for personal purchases. The bookkeeper concealed his actions by removing the forged checks from the bank statements … Continue Reading
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