Canfeng Lai worked for many years at Applied Materials before submitting his resignation to begin a new job at Mattson Technology (one of Applied's competitors). First, however, Lai allegedly emailed himself a number of files containing Applied's trade secrets. In response, Applied sued both Lai and Mattson for violating the Uniform Trade Secrets Act (the "UTSA"). Both Lai and Mattson moved to compel arbitration (based on an arbitration agreement between Applied and Lai). The trial court granted Lai's motion but denied Mattson's because it was not a party to the arbitration agreement and because the equitable estoppel exception was inapplicable. The trial court also denied Mattson's motion to stay the litigation pending the outcome of Lai's arbitration and issued a preliminary injunction to protect Applied's confidential information. The Court of Appeal affirmed the trial court's rulings except as to its order denying Mattson's motion to stay the litigation pending the outcome of the arbitration, which should have been granted pursuant to Cal. Code Civ. Proc. § 1281.4.
Company That Hired Competitors Employee Was Not Entitled To Arbitrate Claims
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