Court of Appeals Affirms Judgment in Favor of Aya Healthcare in Litigation with AMN Healthcare
SAN DIEGO, Calif., November 1, 2018 – A California Court of Appeal has affirmed the trial court’s ruling in favor of Aya Healthcare (“Aya”) in a lawsuit brought by its competitor AMN Healthcare, Inc. (“AMN”).
Previously, a California Superior Court dismissed all of these claims on summary judgment, finding that the non-solicitation provisions in AMN’s employment agreements were unlawful, void and unenforceable under California law. The Superior Court also issued a statewide injunction against AMN which precludes AMN from enforcing these provisions in California against any of its former employees. AMN had previously filed lawsuits and taken other actions against numerous former AMN employees in an attempt to enforce these unlawful provisions. Aya had alleged that these provisions were an unlawful restraint of trade and that AMN was enforcing them in order to discourage former employees from obtaining employment with AMN competitors. This Superior Court’s decision and injunction prevented AMN from “using, enforcing or attempting to enforce any contract or employment agreement in the State of California which purports to restrain its former employees from directly or indirectly soliciting or inducing or causing others to solicit or induce, any employee of AMN to leave the service of AMN.”
In addition to its dismissing AMN’s claims and issuing an injunction, the Superior Court held that awarding attorneys’ fees was appropriate because AMN’s misappropriation claims were “objectively baseless” and had been filed in “bad faith.” In this respect, the Superior Court held that evidence presented by Aya indicated that “prior to the litigation AMN engaged in ‘strong arm’ tactics, including a demand that Aya enter into a mutual no-hire agreement (of specious legal basis)” and that AMN’s conduct supported the inference “AMN was bringing this litigation to intimidate its competitor….” The Superior Court further held that awarding Aya attorneys’ fees on its successful unfair competition claim was “appropriate in the interests of justice.”
The Court of Appeal has now affirmed the Superior Court’s rulings in their entirety. The Court of Appeal independently found AMN’s non-solicitation provision to be unlawful and void under California law. The Court of Appeal held that the action “resulted in the enforcement of an important right affecting the public interest” and “conferred a significant benefit on a large class of persons….namely all current and former AMN California employees who had signed [the employment agreement]…and all California-based competitors of AMN who wanted to hire such former employees…but were concerned about, or refrained from doing so because of [the employment agreement] and the potential risk of litigation resulting from its enforcement.”
AMN’s bad faith pursuit of sham litigation is just one of the anti-competitive behaviors that Aya alleges AMN uses to artificially limit clinical supply and inflate prices for hospitals throughout the country. These anti-completive allegations are the subject of a separate antitrust lawsuit against AMN that Aya filed in federal court (S.D. Cal) on Feb. 2, 2017.
About Aya Healthcare
Aya Healthcare is reimagining healthcare staffing and workforce solutions in the United States. We are the largest privately held travel nurse and workforce solutions provider and deliver solutions for all aspects of healthcare staffing including locums, allied health and just-in-time local staff. The company continues to experience rapid growth as it reshapes the healthcare workforce landscape through its transformative use of technology including its cloud-based MSP solution and real-time Shifts app for per diem clinicians. Aya’s platform provides access to one of the largest sources of contract clinicians in the country, which improves efficiency, increases quality and reduces costs for healthcare systems. To learn more about Aya Healthcare, visit ayahealthcare.com.