Skyline Anticompetitive Employment Agreements California Class Action

This class action brings suit against Skyline Capital Builders, LLC and Skyline Construction Enterprises, Inc., primarily for anticompetitive actions and unfair competition. According to the complaint, Skyline is an investor in commercial real estate and construction services firms and was “search[ing] for a foothold in the local San Diego construction market.” The complaint alleges, among other things, that Skyline employed people under employment agreements with unlawful restrictive covenants, then after a few months terminated them.

The plaintiffs in this action are Kraig Stahl, Gregory Loy, and the KD Stahl Construction Group, Inc. The complaint alleges, “Skyline fraudulently induced both Stahl and Loy to accept employment at Respondent Skyline and to share their entity KD Stahl’s confidential business information, including contacts, business opportunities, as well as assets including but not limited to employees.”

Stahl and Loy accepted the offers of employment, beginning work around November 30, 2020. “As Skyline had required,” the complaint alleges, “they also turned over their personal and their entity KD Stahl’s valuable business assets, including but not limited to[] customer information or accounts, employees, and other competitively sensitive information.”

The two also had signed employment agreements that the complaint alleges violate California law because of their post-employment restrictions that prevent soliciting away Skyline employees or consultants for Skyline, for the period of a year after their employment at Skyline, for their own or others’ benefit. After that, just a few months after they were employed by Skyline, Skyline fired them—Stahl on March 26, 2021 and Loy on May 21, 2021.

The complaint alleges that the restrictions in the employment agreements were intended to prevent employee mobility and competition in the construction industry and that they are unlawful restraints of trade in California.

It also claims that Skyline did not reimburse employees for business expenses.

Two classes have been defined for this action:

• Class 1 is all persons currently or formerly employed by Skyline in California at any time between April 15, 2018 and the date notice is sent to the class in this case, who received an offer letter from Skyline or who Skyline required to execute any agreement that contained a facially unlawful post-employment restrictive covenant made unlawful under Business and Professions Code section 16600 and AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., 28 Cal. App. 5th 923 (Ct. App. 2018).
• Class 2 is all persons currently or formerly employed by Skyline in California at any time between April 15, 2018 and the date notice is sent to the class in this case, who used their personal electronic devices, telephones, software, voicemail services or Internet service providers to perform work for Skyline, or who participated in work-related travel, and incurred other business-related expenses but were not compensated for such business-related expenses.

Article Type: Lawsuit
Topic: Antitrust
Tags: Anticompetitive Actions, No-Poach Agreements, Unfair Competition