Mintz Levin lawyers persuade judge to dismiss trade secrets case against employees

Citing public policy protecting the rights of employees working for California companies to change jobs, a San Diego federal judge dismissed trade secrets misappropriation and civil conspiracy claims against four Filipino workers who left one technology company to join a competitor.

U.S. District Judge Michael M. Anello gave San Jose-based Power Integrations Inc. a chance to amend its complaint by April 14. One of the claims against the defendants — for conspiring to steal the company’s key engineers to go work at San Diego-based Silanna Semiconductor North America Inc., another semiconductor company — was dismissed with prejudice.

The four defendants were Power Integrations employees, all citizens of the Philippines, who left in 2018 and 2019 to take jobs at Silanna.

Power Integrations accused them of violating noncompetition, nonsolicitation, and confidentiality clauses in their contracts along with stealing trade secrets.

The judge cited state appellate rulings to back his conclusion that California public policy allows out-of-state employees to switch jobs unless they steal trade secrets. Power Integrations Inc. v. De Lara et al., 20-0410 (S.D. Cal., filed May 17, 2019).

“In sum, an out-of-state employee working for a California employer can be considered ‘employed in California’ to gain the benefit of California’s statutory protections against restrictive covenants,” Anello wrote in the ruling last week.

The judge cited a 1998 state appellate court ruling to support his decision. Application Group Inc. v. Hunter Group Inc., 61 Cal.App 4th 881 (1998).

Micha “Mitch” Danzig, an attorney with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C., said Thursday he was pleased with the decision. “Companies shouldn’t try to use trade secret allegations to try to enforce non-compete clauses” against former employees, he said.

Power Integrations has another lawsuit against Silanna pending in Delaware federal court, Danzig said.

David J. Miclean, a Belmont-based principal with Miclean Gleason LLP who represents Power Integrations, declined comment on behalf of his client.