## Facts

- Robert L. Reeves operated an immigration-focused law practice; Daniel P. Hanlon and Colin T. Greene were attorneys employed by the firm.
- Reeves and Hanlon reached an arrangement contemplating Hanlon’s possible equity participation, and the firm name was changed to “Reeves and Hanlon, Professional Law Corporation.”
- Hanlon and Greene resigned abruptly and formed a new firm, Hanlon & Greene, A Professional Corporation (H&G).
- Reeves alleged defendants orchestrated the departure of multiple at-will employees from Reeves’s firm to H&G.
- Reeves further alleged defendants removed or destroyed firm computer files and client materials and left without adequate status reports or deadline information for pending matters.
- Reeves maintained a confidential client list of approximately 2,200 clients; defendants allegedly used information from the list to announce their new firm and to directly contact and solicit Reeves’s clients.
- Reeves claimed the departures and solicitation campaign caused significant business disruption and loss of clients.

## Issues

1. Under what standard, if any, may a defendant be liable for intentionally inducing an at-will employee to leave an employer.
2. Whether defendants’ use of Reeves’s confidential client list and related information to solicit clients supported liability and damages under the Uniform Trade Secrets Act (UTSA).

## Decision

- The California Supreme Court affirmed the judgment for Reeves.
- Inducing termination of an at-will employment relationship is potentially actionable, but only under the standard governing intentional interference with prospective economic advantage.
- Accordingly, liability requires proof that the defendant committed an “independently wrongful act” that induced the employee to leave; mere solicitation or hiring of another’s at-will employees is not actionable.
- The UTSA award was upheld because the evidence supported findings that defendants misappropriated and used Reeves’s confidential client list and related data to solicit clients.

## Legal Principles

- Interference with an at-will employment relationship is treated as interference with prospective economic advantage, requiring an independently wrongful act.
- An “independently wrongful act” is conduct prohibited by a constitutional, statutory, regulatory, common-law, or other determinable legal standard.
- Mere recruitment of a competitor’s at-will employees, without independently wrongful conduct, does not create tort liability.
- A confidential client list and related, compiled client information maintained by a firm may qualify as a trade secret under the UTSA.
- Using a protected client list to solicit clients can constitute trade secret misappropriation supporting damages.

## Conclusion

The court held that inducing at-will employees to leave is actionable only when accomplished through independently wrongful conduct, and it affirmed UTSA liability where departing attorneys used a confidential client list and related firm information to solicit clients and harm the former firm.


Reeves v. Hanlon, 95 P.3d 513 (Cal. 2004)