The Business Department of Payne & Fears handles litigation and transactions for a broad spectrum of clients, including large and small corporations, large and small companies and partnerships, directors and officers of corporations and companies, and individuals. Our clients come from many different industries and by understanding the nuances of an industry, we can provide knowledgeable counsel and the best possible service to our clients in both trial and appellate proceedings in state and federal courts, in arbitration, and before administrative agencies. Our major areas of expertise include:

Successes

Apr 24

Payne & Fears Secures Preliminary Injunction Against Former E*TRADE Employee

Payne & Fears obtained a victory in favor of client E*TRADE in an action brought against a former employee.

In the case E*TRADE Financial Corporation v.  Eaton, 305 F. Supp. 3d 1029 (D. Ariz. 2018), the former employee testified that he contacted his former employer’s clients, by telephone, to announce his new position and provide his new contact information. The former employee claimed that he was required, by certain rules applicable to certified financial planners, to provide his new contact information to the clients he previously serviced. The former employee admitted, however, that if he was unable to speak with a client in “real-time,” he did not send that client an e-mail, letter, flyer, or some other written communication to provide his new contact information.

The court found that by insisting on conveying his switching firms only in a live and real-time conversation and never following up to provide his new contact information to those former clients who did not assent to a telephone call, “[the former employee’s] primary purpose was to solicit their business to him and away from [his former employer].”  This, the court held, constituted improper solicitation in violation of the agreement between the former employee and employer.

Rod Sorensen and Rhianna Hughes defended the case on behalf of E*TRADE.  This case expanded the definition of client solicitation under Arizona law.  Now, not only is the content of the former employee’s communications relevant, but so is the manner in which the communication occurs.

Practice areas: Labor and Employment Litigation, Trade Secret and Unfair Business Practices

Attorneys: Rhianna S. Hughes, Rod Sorensen

2017

Unlicensed Contractor Agrees to Drop Million Dollar Suit Against SpaceX

Payne & Fears LLP recently obtained a victory in favor of their client, SpaceX, before the California Court of Appeal which upheld the dismissal of certain claims against SpaceX by an unlicensed contractor seeking to collect on what it claimed were over $1 million in unpaid invoices. 

In Phoenix Mechanical Pipeline, Inc. v. Space Exploration Technologies Corp., No. B269186 (Cal. Ct. App. June 13, 2017), a published opinion, the Court of Appeal for the Second Appellate District ruled that plaintiff’s claims for contracting services were barred by California Business & Professions Code section 7031(a). That section requires a party to have license in order to maintain an action for compensation for contracting-related services. SpaceX prevailed in demonstrating that plaintiff did not have a license and that it was not sufficient for plaintiff to merely allege that it had a licensed “responsible managing officer.” The appellate court did, however, permit the contractor to try to recover for items that did not require a license. Rather than pursue the case, the contractor walked away to avoid a cross-complaint by SpaceX seeking reimbursements for previous payments made for work requiring a license.

The published decision is important because it reinforces the strong public policy of section 7031 that contractors hold a valid license to receive compensation for their services. It also underscores that a contractor may not evade the strict licensing laws by “borrowing” a license from a licensed person.

SpaceX was defended by Scott Luskin, Benjamin Nix, Robert Matsuishi, and Erik Andersen (on appeal).

Practice areas: Business Litigation, Appellate Law (Business)

Attorneys: Benjamin A. Nix, Erik M. Andersen, Robert Tadashi Matsuishi, Scott O. Luskin