Former Employee Sues Over Unlawful Non-Competition Agreement

A suit was removed to federal court on Wednesday from Santa Clara County, California state court by plaintiffs Alex Mauricio and Bristol Hospice, LLC against defendant Suncrest Health Services, LLC. The complaint alleges that the defendant acted with anti-competitive intent and in bad faith when agreeing on employment agreements with plaintiff Mauricio.

Plaintiff Mauricio is the Chief Strategy Officer of Bristol, which operates hospices across 13 states. Defendant Suncrest provides the same hospice and home healthcare services as plaintiff Bristol, making them direct competitors.

According to the complaint, Bristol extended Mauricio an offer of employment for Chief Strategy Officer in March of 2022. Previously, Mauricio had worked for Suncrest in the position of Corporate Director of Marketing.

Mauricio’s employment contract with the defendant had numerous specifications, including that if he was terminated, he could not engage with a competitor or any of its employees or contractors for eighteen months after the date of termination. Further, Mauricio would not be allowed engage with any indirect subsidiary or affiliate of Suncrest.

Suncrest terminated Mauricio on January 3, 2022. He was offered a severance package in exchange for “a release of claims and two-year post-employment restrictive covenants,” but he declined to sign the agreement due to the covenants.

In the same month of Mauricio’s termination, he received a letter from Suncrest’s counsel that accused him of disclosing “confidential information and making disparaging remarks about Suncrest in violation of his employment agreements.” A follow-up letter further detailed that Suncrest intended to pursue every legal remedy available to them to address the alleged misconduct.

The complaint asserts that each letter sent by Suncrest failed to acknowledge that the employment agreements were unenforceable since the non-compete and anti-raiding covenant were in violation of California law. The plaintiffs contend that “Suncrest’s knowing inclusion of these illegal and unenforceable provisions, and its continued attempts to impose similar illegal provisions against Mr. Mauricio thereafter, demonstrate Suncrest’s bad faith and anti-competitive intent.”

The complaint cites declaratory relief, unfair competition under the California Business and Professions Code, common law unfair competition, and a violation of the California Labor Code. The plaintiffs are seeking the aforementioned declaratory relief, injunctive relief, compensatory damages, litigation fees, and any other relief deemed just by the Court.

The plaintiffs are represented by Goodwin Procter, LLP, while the defendants are represented in the litigation by Armstrong Teasdale LLP.