Opinion
A155603
10-31-2019
VEEVA SYSTEMS, INC., Plaintiff and Appellant, v. QUINTILES IMS INC., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG17868081)
Plaintiff Veeva Systems, Inc. (Veeva) challenges the trial court's orders sustaining defendant Quintiles IMS, Inc.'s (IMS) demurrer to Veeva's first amended complaint and dismissing IMS from the action with prejudice. We reverse in part and affirm in part the order sustaining IMS's demurrer, and reverse the order dismissing IMS from the action.
IMS is now known as IQVIA but we will refer to it as IMS in this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
This case involves a dispute as to whether IMS and two other corporate defendants should be allowed to enforce their former employees' post-termination non-compete and non-disclosure agreements (NCA/NDAs) by bringing—or threatening to bring—lawsuits against Veeva for hiring these employees. Because this is an appeal from an order sustaining a demurrer, we set forth as true the following facts as they are alleged in the first amended complaint. (Crowley v. Katleman (1994) 8 Cal.4th 666, 672.)
Veeva is a "California-based employer and a leader in cloud-based software for the global life sciences industry." It is incorporated in Delaware, has its headquarters in Pleasanton, California, and conducts its principal corporate activities in California. Veeva's corporate departments, including research and development, engineering, marketing, human resources, finance, and legal, are in California, as are its executive offices and real estate ownership. Veeva recruits its employees from California and its hiring decisions are made by California executives. In the course of their work, Veeva employees regularly interact with California-based employees, vendors, and customers. All Veeva employees, whether they work in California or remotely, sign a standard employment agreement that is governed by California law. Veeva does not require its employees to sign NCA/NDAs based on its position that NCAs and overly broad NDAs are unlawful in California.
IMS does not appear to dispute that NCAs or overbroad NDAs are unlawful in California.
IMS is a Delaware corporation that provides information services and technology to the healthcare industry. It is headquartered in North Carolina and has offices throughout California, including San Francisco, Redwood City, San Jose, Rancho Cordova, Fresno, Woodland Hills, and San Diego. The two other defendants that are not parties to this appeal—Medidata Solutions, Inc. (Medidata) and Sparta Systems, Inc. (Sparta)—are out-of-state corporations that are headquartered outside of California but have offices and employees, and conduct significant business, in California. Medidata is a "software-as-a-service technology company" and Sparta "provides quality management solutions to the life sciences industry."
Veeva, IMS, Medidata, and Sparta are competitors for the same products, services, and employees. IMS, Medidata, and Sparta actively recruit and hire Veeva's employees, whose employment is not restricted by NCA/NDAs. For example, in December 2017, IMS's recruiters sent numerous solicitations to Veeva employees informing them of employment opportunities and urging them to "reach out" or "let me know how and when I can contact you."
Meanwhile, IMS, Medidata, and Sparta require their employees to sign NCA/NDAs that preclude them from seeking employment with competitors. IMS's NCA/NDA precludes its employees from, among other things, becoming employed by, or obtaining any interest in, any entity "anywhere in the United States or Canada" that is "directly or indirectly in competition" with IMS for up to one year after the employee leaves his or her employment with IMS. It "defines everything at IMS as confidential, and generally prohibits employees from ever using or disclosing so-called 'confidential information' to anyone outside of IMS." (Emphases in original.)
IMS "has a pattern and practice of threatening to and/or seeking damages arising from Veeva's alleged interference with IMS's [NCA/NDAs]." For example, in January 2016, Veeva hired former IMS employee Jeffrey Fusco, who had signed IMS's standard NCA/NDA prohibiting him from becoming employed by any IMS competitor until December 2016. On January 8, 2016, IMS sent a cease and desist letter threatening litigation to both Veeva and Fusco asserting Fusco was bound by IMS's NCA/NDA and "must comply with certain obligations, including the non-compete obligation as it related to Fusco's employment activities with Veeva, and [the non-disclosure obligation as it related to] IMS's and Veeva's California-based clients. 'If legal action is necessary, [IMS] may seek (a) monetary damages from you and those acting in concert with you attributable to your wrongful actions, (b) an injunction against you and all those acting in concert with you, (c) reimbursement for reasonable attorneys' fees and court costs, and (d) all the other relief it deems appropriate.' The letter further stated that 'the statements and requests set forth in this letter are made without prejudice to, or waiver of, any legal and equitable rights or remedies available to [IMS], all of which are expressly reserved.' "
It appears Fusco works remotely from an out-of-state location as approximately one-third of Veeva employees do; however, Veeva considers Fusco to be a California employee because he has signed Veeva's standard employment agreement that is governed by California law, reports to Veeva's California executives, has California clients, travels to California for work, and regularly interacts with Veeva employees who reside in California.
On October 29, 2019, Veeva's appellate counsel informed this court that Fusco is no longer a Veeva employee and is currently working for IMS. At oral argument, the parties agreed that Fusco's current work status does not affect this appeal. We agree.
IMS argues the letter was not a demand letter or a threat of litigation. It asserts its letter "expressly disavows any intention to sue" because it states " 'we will not seek further assurances or take any action at this time to enforce our contractual rights below.' " IMS's representation is inaccurate. The letter states that IMS will not take legal action if its "assumptions" are correct that Fusco and Veeva will comply with the NCA/NDA. IMS goes on to state twice that Veeva and Fusco must "immediately cease and desist" from any "wrongful conduct" that violates the NCA/NDA or may otherwise face legal action. We see these statements as nothing other than demands or threats of litigation.
Veeva alleges it has sustained "injury-in-fact" and has "lost money" "within the meaning of California's unfair competition law." For example, in response to IMS's letter, Veeva sustained economic loss when it restricted Fusco's employment activities in order to accommodate the NCA/NDA and avoid being sued, and sought legal and management counsel regarding IMS's letter and the NCA/NDA. Veeva intends to continue recruiting and hiring current and former IMS employees from California for employment in California.
Veeva brought an action for declaratory and injunctive relief against all defendants on July 17, 2017. Defendants separately demurred to the complaint and the trial court sustained Medidata's demurrer with leave to amend. Veeva filed a first amended complaint before the court ruled on IMS and Sparta's demurrers, thereby rendering IMS and Sparta's demurrers moot.
All three defendants demurred to the first amended complaint, and the trial court sustained IMS's demurrer with leave to amend. Thereafter, Veeva stated it did not intend to "cure the defects" as to IMS and considered "IMS dismissed from this action, pending appellate review." The court dismissed IMS from the action with prejudice. Veeva filed a second amended complaint as to the other two defendants, and the action is still pending below as to those defendants.
Veeva alleges seven causes of action against IMS that can be separated into two categories—declaratory relief (first through fourth causes of action) and Unfair Competition Law (UCL), Business and Professions Code section 17200 et seq. (fifth trough seventh causes of action). In its first cause of action, Veeva alleges "California employers have a strong and legitimate interest in having broad freedom to choose from a national applicant pool in order to maximize the quality of the product or services they provide. The State of California has a strong interest in protecting California-based employers and their employees from anti-competitive conduct from out-of-state employers, like Defendants. . . ." Veeva seeks a declaration that it has the right to solicit and recruit IMS's former and current employees, including Fusco.
In its second cause of action, Veeva alleges that Medidata and Sparta have accused Veeva of "illegal 'interference' " when Veeva has asserted its right and obligation to defend and indemnify its employees (who are former employees of Medidata or Sparta) against lawsuits these defendants have filed against them for alleged NCA/NDA violations. Veeva adds that it "reserves the right to seek declaratory relief against IMS with respect to this cause of action in the event that IMS ever challenges Veeva's right to defend and indemnify former IMS employees" in litigation.
In its third cause of action, Veeva seeks a declaration that IMS violates California law when it enters into NCA/NDAs "that include within their scope the provision of services in California to a California-based employer. Ancillary to this declaratory judgment, Veeva further seeks an order enjoining Defendants from entering into such contracts and requiring Defendants to: (1) modify any existing [NCA/NDAs] with employees so that these employees are free to provide services in California to a California-based employer."
In its fourth cause of action, Veeva seeks a declaration that IMS violates California law when it "threaten[s] or seek[s] to enforce [NCA/NDAs] that prohibit or restrict employees from providing services in California to Veeva. Ancillary to this declaratory judgment, Veeva further seeks an order enjoining Defendants from taking any action to enforce, whether through litigation threats, court proceedings, or otherwise, [an NCA/NDA] that prevents employees from providing services to Veeva in California within the meaning of California law."
In its fifth cause of action for "unfair competition concerning recruitment of defendants' employees," Veeva alleges "Defendants engage in unfair competition when they require employees to enter into [NCA/NDAs] that inhibit Veeva's ability to recruit their employees to provide services in California to a California employer within the meaning of California law."
In its sixth cause of action for "unfair competition arising from defendants' [NCA/NDAs]," Veeva alleges "Defendants engage in unfair competition when they enter into post-termination [NCA/NDAs] with employees that include in their scope the provision of services in California for a California-based employer."
In its seventh cause of action for "unfair competition arising from the threatened or actual enforcement of [NCA/NDAs]," Veeva alleges "Defendants engage in unfair competition when they threaten to or actively seek to enforce their [NCA/NDAs] that include in their scope the provision of services in California."
As to all three UCL causes of action, Veeva alleges it "has suffered injury in fact as a result of Defendants' unfair competition," including "defense and litigation costs, diverted resources," and "management and attorney time in responding to threatened . . . litigation."
The trial court sustained IMS's demurrer as to the first through fourth causes of action for declaratory relief on the grounds that Veeva "failed to allege facts sufficient": (1) "to demonstrate that an actual case or controversy exists between Plaintiff and [IMS] regarding Plaintiff's asserted right to solicit current and former [IMS] employees purportedly bound by the terms of the company's [NCA/NDAs]"; and (2) "to support an inference that it has standing to litigate the validity of Defendant's agreement with former employee Jeffrey Fusco." The court sustained IMS's demurrer as to the fifth through seventh causes of action on the ground that "Plaintiff has failed to allege facts sufficient to support an inference that it has suffered 'economic injury' due to Defendant's unfair or unlawful conduct" because IMS's letter to Veeva and Fusco reminding them of their obligations under the NCA/NDA "did not result in any cognizable 'economic injury' to Plaintiff."
DISCUSSION
"A demurrer tests the sufficiency of a complaint by raising questions of law. [Citation.] In determining the merits of a demurrer, all material facts pleaded in the complaint and those that arise by reasonable implication, but not conclusions of fact or law, are deemed admitted by the demurring party. [Citations.] The complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. [Citation.]" (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) On appeal, we are not bound by the trial court's construction of the complaint; rather, we must make our own independent interpretation in determining whether the complaint alleges facts sufficient to state a cause of action. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.)
Veeva contends the trial court erred in sustaining the demurrer as to the declaratory relief claims because it alleged sufficient facts in support of the actual controversy and standing requirements. Veeva further contends the court erred in sustaining the demurrer as to the UCL claims because it alleged facts sufficient to support an inference that it suffered economic injury as a result of IMS's conduct. We will evaluate each of the issues—actual controversy, standing, and economic injury—below.
1. Declaratory Relief
a. Actual Controversy
Code of Civil Procedure section 1060 provides that "[a]ny person interested under . . . a contract, or who desires a declaration of his or her rights or duties with respect to another, . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action . . . for a declaration of his or her rights and duties . . . including a determination of any question of construction or validity arising under the . . . contract." An interested person is entitled to pursue declaratory relief "before there has been any breach of the obligation in respect to which said declaration is sought." (Ibid.) In other words, "[t]he 'actual controversy' language in [section 1060] encompasses a probable future controversy relating to the legal rights and duties of the parties." (Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal.App.4th 877, 885 [actual controversy existed where the parties disagreed, and were going to continue to disagree, in their interpretations of the Government Code].)
While "[t]he language of [section 1060] appears to allow for an extremely broad scope of an action for declaratory relief" (Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556, 562), it does not embrace controversies that are " 'conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.' " (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.) " 'Whether a claim presents an "actual controversy" within the meaning of . . . section 1060 is a question of law that we review de novo.' " (American Meat Institute v. Leeman (2009) 180 Cal.App.4th 728, 741.)
Whether IMS's NCA/NDAs are valid and enforceable against Veeva is not based on a " 'conjectural' " or hypothetical controversy. As alleged, Veeva and IMS are competitors for the same products, services, and employees. IMS, which conducts significant business in California, actively and freely recruits and hires Veeva's employees because Veeva employees are not bound by NCA/NDAs, but when Veeva tries to recruit and hire IMS's employees, IMS engages in "a pattern and practice of threatening to . . . seek[] damages arising from Veeva's alleged interference with IMS's [NCA/NDAs]." Veeva alleges as an example that when it hired former IMS employee Fusco, IMS sent a letter to Veeva essentially making clear its position that Veeva "must comply" with its "obligations" under the NCA/NDA or may otherwise face legal action.
Moreover, Veeva intends to continue recruiting and hiring IMS employees, and there is no reason to believe IMS will cease to challenge such conduct. (Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal.App.4th 881, 893, fn. 6 (Hunter).) In Hunter, an actual controversy existed where, among other things, the parties were competitors who were going to "continue to have run-ins as they compete for employees" and where a dispute over one particular employee was "typical of controversies that will almost certainly continue to arise between [the companies]." (Ibid.)
IMS points out, as the trial court did in sustaining IMS's demurrer, that IMS has not sued Veeva or Fusco. It appears IMS's argument is that there is no actual controversy for purposes of a declaratory relief cause of action until IMS has sued Veeva. "The threat of a lawsuit," however, "can satisfy the actual controversy requirement for a declaratory relief action." (Tashakori v. Lakis (2011) 196 Cal.App.4th 1003, 1012-1013 (Tashakori).) In Tashakori, the plaintiffs wanted to build a house on an empty lot they owned but their neighbors, whose driveway would have to be shared if the house were built, "communicated to the [plaintiffs] that they considered any use of the shared driveway . . . to be trespassing that would subject the user to legal action." (Id. at p. 1013.) The Court of Appeal held there was an actual controversy for purposes of the plaintiffs' declaratory relief claims because the plaintiffs and their neighbors disagreed as to whether the plaintiffs were entitled to an easement, and the plaintiffs "understandably wanted the matter resolved before further proceeding with their plans to develop [the lot]." (Ibid.)
Similarly, in American Meat v. Leeman, supra, the Court of Appeal rejected the defendants' argument that a " 'declaratory relief action filed in response to a mere threat to sue is not proper' " and held that a "60-day Notice of Violation" that a citizen sent to the defendants accusing them of violating the law was sufficient to create an actual controversy. (180 Cal.App.4th at pp. 769-770, fn. 15.) In Zeitlin v. Arnebergh (1963) 59 Cal.2d 901, 906, an actual controversy for declaratory relief action existed where the city attorney had threatened to prosecute sellers of a certain book for distributing obscene material, and a bookseller wished to sell the book without threat of prosecution. The Supreme Court held the bookseller was entitled to know whether he should refrain from offering the book for sale. (Ibid.) The very purpose of a declaratory relief action is to " ' " 'serve some practical end in quieting or stabilizing an uncertain or disputed jural relation' " ' " and " ' "to liquidate doubts with respect to uncertainties or controversies which might otherwise result in subsequent litigation." ' " (Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 647, italics added, internal citations omitted.)
Finally, we reject IMS' argument that there is no actual controversy because "what Veeva really seeks here is an advisory opinion that will control private contractual relationships entered anywhere, now or in the future between [IMS and its] employees." "All that Code of Civil Procedure section 1060 requires is that there be [an] 'actual controversy relating to the legal rights and duties of the respective parties.' " (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606.) To move past demurrer on a declaratory relief cause of action, "a party need not establish that it is also entitled to a favorable judgment [i.e., to declaratory relief]." (Ibid.; Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609-610 ["Whether the plaintiff will [ultimately] be able to prove the pleaded facts is irrelevant to ruling upon the demurrer"].) IMS's argument that Veeva's request is "overreaching" goes to whether declaratory relief should be granted rather than to the issue of whether Veeva has set forth sufficient facts showing the existence of an actual controversy to move past the demurrer stage. It is up to the trial court, in the first instance, to determine the merits of Veeva's request for declaratory relief, and we express no opinion as to whether declaratory relief should ultimately be granted in this case. (See Environmental Defense Project of Sierra County v. County of Sierra, supra, 158 Cal.App.4th at p. 885 ["Once an 'actual controversy' exists, it is within the trial court's discretion to grant or deny declaratory relief, and a reviewing court will not disturb that exercise of discretion absent abuse"].)
Therefore, based on the circumstances in this case, we conclude the facts as pled establish an actual controversy, sufficient to overcome demurrer, regarding the enforceability of IMS's NCA/NDA in California.
b. Standing
"Code of Civil Procedure section 1060 confers standing upon '[a]ny person interested under . . . a contract' to bring an action for declaratory relief 'in cases of actual controversy relating to the legal rights and duties of the respective parties.' " (Hunter, supra, 61 Cal.App.4th at p. 892.) "The law allows any party with an interest in a contract to pursue a declaration of rights as to that instrument when an actual controversy exists." (Market Lofts Community Assn. v. 9th Street Market Lofts, LLC (2014) 222 Cal.App.4th 924, 932.)
Hunter, supra, is instructive. There, California company Application Group, Inc. (AGI) hired Dianne Pike (Pike), former employee of Maryland company Hunter Group, Inc. (Hunter), before the term of a non-compete agreement (NCA) Pike had signed with Hunter had expired. (61 Cal.App.4th at p. 886-887.) Hunter brought an action in the Maryland court against Pike for breach of the NCA and against AGI for inducing that breach. (Id. at p. 887.) Thereafter, AGI and Pike filed a complaint in the California court seeking declaratory relief that California law (that NCAs are void), and not Maryland law (which allows NCAs), applied to Pike's NCA and AGI's recruitment of Pike. (Id. at p. 888.)
While the California case was still pending, the Maryland court entered judgment in favor of Pike and AGI on the ground that Hunter had failed to present any evidence of damages. (Id. at pp. 887, 888.) The Court of Appeal held that Pike's individual claims against Hunter in the California case were moot (because her one-year term had expired and judgment had been entered in her favor in the Maryland action), but went on to decide AGI's declaratory relief claim. (Id. at p. 894.) In so doing, the Court of Appeal stated it was undisputed that AGI has "standing as a 'person interested under' the [NCA]," and went on to note that AGI will continue to be an interested party under the NCA as it competes with Hunter for the same employees and subjects itself to possible future litigation by hiring former Hunter employees. (Id. at p. 892, fn. 6.)
Although the Court of Appeal in Hunter did not specifically hold that AGI has standing (because standing was undisputed), it emphasized California's "strong public policy" in ensuring a "California-based employer's right to invalidate" covenants not to compete under California law. (Id. at p. 900.) It also noted the California employer's right to "protect itself from 'unfair competition' " stemming from non-compete agreements that are void in California, and the "important . . . California public policy which ensures that California employers will be able to compete effectively for the most talented, skilled employees in their industries, wherever they may reside." (Id. at p. 901.) The Court of Appeal's statements provide support for our conclusion that Veeva, threatened with litigation when it attempts to recruit or hire IMS employees, is an "interested person under the [NCA/NDA]" and has standing to pursue declaratory relief.
Although Pike was a Maryland resident who had "never set foot in California," AGI had standing—and an actual controversy existed—as to whether Hunter's NCA was valid in California. (Hunter, supra, 61 Cal.App.4th at p. 887.) The Court of Appeal noted that the "rapid expansion of computer technology" has resulted in the " 'virtual employer,' " one whose employees work out of their homes, or from branch offices scattered throughout the country, or at customer sites in various states, as necessary to provide 'consulting' services. . . ." (Id. at p. 892.) "California has a strong interest in protecting the freedom of movement of persons whom California-based employers (such as AGI) wish to employ to provide services in California, regardless of the person's state of residence or precise degree of involvement in California projects. . . ." (Id. at pp. 900-901.) IMS emphasizes that Fusco does not reside in California; however, we do not believe this fact alone deprives Veeva of standing, or that it defeats Veeva's position that an actual controversy exists concerning the enforceability of IMS's NCA/NDA in California.
We note that Veeva alleged its second cause of action for declaratory relief as to Medidata and Sparta only. Veeva does not challenge the trial court's ruling sustaining IMS's demurrer as to the second cause of action; on appeal, it simply states: "Veeva did not assert its second cause of action—concerning indemnity of employees—against IMS." We therefore affirm the court's order sustaining the demurrer as to the second cause of action.
2. UCL - Economic Injury
The UCL, Business and Professions Code section 17200 et seq., expresses California's public policy against unfair competition and prohibits " 'wrongful business conduct in whatever context such activity might occur.' " (Hunter, supra, 61 Cal.App.4th at p. 907.) Section 17200 defines unfair competition as any "unlawful, unfair or fraudulent business practice." (Ibid.) "California courts have recognized that an employer's business practices concerning its employees are within the scope of section 17200. [Citations.]" (Ibid.)
A private citizen has standing to bring a UCL action only where the person " 'has suffered injury in fact and has lost money or property' as a result of the unfair competition." (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320-321 (Kwikset), citing Bus. & Prof. Code, § 17204.) "There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary. [Citation.]" (Kwikset, supra, 51 Cal.4th at p. 323.) "[The law does not] purport to define or limit the concept of 'lost money or property,' nor can or need we supply an exhaustive list of the ways in which unfair competition may cause economic harm." (Ibid.)
Here, as noted, the trial court determined that Veeva had "failed to allege facts sufficient to support an inference that it has suffered 'economic injury' due to Defendant's unfair or unlawful conduct" because IMS's letter to Veeva "did not result in any cognizable 'economic injury' to Plaintiff." We disagree, as " ' "[t]he contours of the injury-in-fact requirement, while not precisely defined, are very generous," requiring only that [a] claimant "allege[] some specific, 'identifiable trifle' of injury." ' " (Tryok v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1347.) In Kwikset, supra, for example, consumers who alleged they were deceived into purchasing locksets that were mislabeled as being "Made in U.S.A."—but contained some parts that were not made in the United States—were held to have suffered an "injury in fact" because they were allegedly "made to part with more money than he or she otherwise would have been willing to expend" for the locksets. (51 Cal.4th at p. 330.)
In Robinson v. U-Haul Co. of California (2016) 4 Cal.App.5th 304, 308, the Court of Appeal held that Robinson, a truck rental franchisee who signed a non-compete agreement with U-Haul Company of California (U-Haul), had standing under the UCL because he sustained economic injury in the form of attorney fees and costs when U-Haul sued, and threatened to sue, Robinson for alleged violations of the non-compete agreement. (Id. at p. 318.) "The alleged unfair business practice in this case was not just the inclusion of the noncompetition covenant in [U-Haul's contracts], but the strategic use of litigation and threatened litigation to achieve its anticompetitive purpose." (Ibid.) "This is not a case where an unscrupulous attorney teamed up with a stick figure plaintiff to shake down a completely unrelated business. . . As [a victim of U-Haul's] anticompetitive business practice, Robinson has standing." (Ibid.; see also Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, 723 [the purpose of requiring injury in fact is " 'to confine standing to those actually injured by a defendant's business practices and to curtail the prior practice of filing suits on behalf of . . . " ' "clients who have not . . . had any . . . business dealing[s] with the defendant" ' " ' "].)
In Law Offices of Matthew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 548, a law office (Higbee) filed an action against an online legal services provider, Expungement Assistance Services (EAS) under the UCL on the basis that EAS was undercutting the competition by using unlicensed persons to perform legal work and taking business away from Higbee. The trial court determined Higbee had failed to allege he had suffered injury in fact, stating: " 'It is not alleged that plaintiff had a transaction with defendant in which it lost money or property or that it was deprived of money or property to which it had a cognizable claim. Plaintiff only alleges that defendant is getting some business that plaintiff might possibly obtain for itself. This is insufficient. One may not sue a competitor under [section] 17200 because that competitor is obtaining some market share.' " (Ibid.) The Court of Appeal reversed, stating: "we hold that Higbee, having alleged that he had been forced to pay increased advertising costs and to reduce his prices for services in order to compete, and that he had lost business and the value of his law practice had diminished, succeeded in alleging at least an identifiable trifle of injury as necessary for standing under the UCL." (Id. at p. 561.)
Here, Veeva has alleged that IMS's unfair practice of threatening to enforce its void NCA/NDA has resulted in economic injury because Veeva was forced to restrict Fusco's employment activities in order to avoid being sued, and because it had to seek legal and management counsel in preparation for possible litigation when IMS told Veeva it "must comply" with its "obligations" under the NCA/NDA or may otherwise face legal action. Veeva alleges it has incurred, and will continue to incur, economic loss as its recruitment efforts and ability to obtain the best employees from a nationwide pool are diminished. The pleading requirements for "the economic injury prong of [the UCL]" are "minimal" (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 522, disapproved of on another ground by Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939), and as noted, " ' "[t]he contours of the injury-in-fact requirement . . . are very generous," requiring only that [a] claimant "allege[] some specific, 'identifiable trifle' of injury" ' " (Tryok v. Farmers Group, Inc., supra, 171 Cal.App.4th at p. 1347). Viewing the complaint "liberally by drawing reasonable inferences from the facts pleaded," (Rodas v. Spiegel, supra, 87 Cal.App.4th at p. 517), we conclude Veeva has pled sufficient facts to show that IMS's conduct in attempting to enforce its NCA/NDA by threat of litigation has resulted in economic injury to Veeva for purposes of standing under the UCL.
IMS argues Veeva's UCL claims also fail because Veeva has not identified any unlawful or unfair business practice occurring "in California." We disagree. Veeva has alleged that IMS, which does business in California, is attempting to enforce its NCA/NDA against Veeva, a California-based employer. IMS points out that Fusco is not a resident of California, but, as we have stated above, we do not believe this fact alone deprives Veeva of standing to dispute the enforceability of IMS's NCA/NDA in California. (See Hunter, supra, 61 Cal.App.4th at pp. 882, 900-901.)
DISPOSITION
The trial court's order dismissing IMS with prejudice is reversed. The court is directed to vacate its order sustaining the demurrer with leave to amend and enter a new order sustaining the demurrer without leave to amend as to the second cause of action only, and overruling the demurrer as to the remaining causes of action. The parties shall bear their own costs on appeal.
/s/_________
Petrou, J. WE CONCUR: /s/_________
Siggins, P.J. /s/_________
Fujisaki, J.