## Facts

- CRST, an interstate trucking company, operated a three-phase driver training program and paid trainees’ tuition and training costs.
- After completion of initial training and orientation, CRST and trainees could enter written Driver Employment Contracts with a stated one-year term, subject to early termination for due cause by CRST.
- CRST alleged the contracts restricted drivers from leaving during the one-year term without contractual consequences (e.g., reimbursement and liquidated damages).
- CRST alleged Werner, a competitor, knowingly solicited and hired CRST-trained drivers (including Spencer and Chatman) while they were still within the one-year contract term.
- CRST sued for intentional interference with contract, violation of California’s Unfair Competition Law (UCL), intentional interference with prospective economic advantage, and misappropriation of trade secrets (later informally withdrawn).
- The district court dismissed the first amended complaint under Rule 12(b)(6) without explanation and awarded Werner attorneys’ fees based on a finding that the trade secret claim was brought in bad faith.

## Issues

1. Whether the complaint stated a claim for intentional interference with contract under California law based on hiring drivers allegedly bound by fixed-term employment contracts.
2. Whether the complaint stated a UCL claim under the “unlawful” prong by predicating it on alleged intentional interference with contract.
3. Whether the complaint stated a claim for intentional interference with prospective economic advantage by alleging an independently wrongful act.
4. Whether attorneys’ fees were properly awarded to Werner on the withdrawn trade secret claim based on objective speciousness and subjective bad faith.

## Decision

- Reversed the Rule 12(b)(6) dismissal of the intentional interference with contract claim.
- Reversed the dismissal of the UCL claim, holding the pleaded tort could supply the “unlawful” predicate.
- Reversed the dismissal of the intentional interference with prospective economic advantage claim, holding the alleged UCL violation satisfied the independently wrongful act requirement.
- Affirmed the attorneys’ fee award to Werner on the trade secret claim.

## Legal Principles

- A claim for intentional interference with contract under California law requires allegations of: (1) a valid contract, (2) defendant’s knowledge, (3) intentional acts designed to induce breach or disruption, (4) breach or disruption, and (5) resulting damages.
- Inducement of breach of a fixed-term employment contract can support interference liability without the additional “independently wrongful act” requirement applicable to interference with at-will relationships.
- The UCL “unlawful” prong permits borrowing violations of other laws; adequately pleaded intentional interference with contract may serve as the predicate unlawful conduct.
- For interference with prospective economic advantage, California requires an independently wrongful act; conduct alleged to violate the UCL can satisfy that requirement.
- Attorneys’ fees may be awarded on a trade secret misappropriation claim when the claim is objectively specious and pursued in subjective bad faith.

## Conclusion

The Ninth Circuit reinstated CRST’s contract-interference, UCL, and prospective-advantage claims based on allegations that Werner knowingly hired drivers bound by fixed-term contracts, but it left intact a fee award against CRST for pursuing a trade secret claim found objectively baseless and brought in bad faith.


CRST Van Expedited, Inc. v. Werner Enters., Inc., 479 F.3d 1099 (9th Cir. 2007)