Barker v. Insight Global, LLC

Filing 106

ORDER by Magistrate Judge Howard R. Lloyd re 101 Discovery Dispute Joint Report No. 4. (hrllc2, COURT STAFF) (Filed on 9/7/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
Northern District of California

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JOHN BARKER,
Plaintiff,

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Case No.5:16-cv-07186-BLF (HRL)
ORDER RE DISCOVERY DISPUTE
JOINT REPORT NO. 4

v.

Re: Dkt. No. 101

INSIGHT GLOBAL, LLC, et al.,
Defendants.

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INTRODUCTION

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Insight Global, LLC (“Insight”) is a staffing services company. John Barker (“Barker”)

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was a long time employee of Insight and head of its San Francisco/San Jose office. On October

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26, 2016, Insight terminated Barker’s employment. Soon afterward, Barker obtained new

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employment with Beacon Hill Staffing Group, LLC (“Beacon Hill”), an Insight competitor.

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Barker sued Insight for unpaid deferred compensation and also for a declaration that the

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non-compete and non-solicitation provisions of his employment contract were void under

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California Business and Professions Code § 16600.

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Insight counterclaimed, accusing Barker of breaching his employment contract by (1)

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going to work for an Insight competitor without notifying Insight and (2) soliciting at least 8

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Insight employees to quit (successfully with 3 of them). Insight also alleged claims for relief

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based on interference with prospective economic advantage (the revenue that the 3 who left would

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have generated) as well as interference with contract (same idea). Insight said Barker

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“encourage[ed]” the 3 to “solicit and/or assist in soliciting certain clients of Insight Global to

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terminate, alter, and/or refrain from entering into continuing client relationships with Insight

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global.” (Dkt. 29 ¶ 47) (emphasis added).

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In Discovery Dispute Joint Report (DDJR ) #2, Insight sought an order compelling its

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requested discovery on the issue of whether Barker induced John McArthur (“McArthur”), Connor

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Cronin (“Cronin”), and Bryan Verduzco (“Verduzco”) to quit Insight and come to work for

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Beacon Hill. (These are the 3 mentioned in the previous paragraph, and they are non-parties to
this action.) The court in its ruling (Dkt. 87) did itself draft and permit some very focused

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United States District Court
Northern District of California

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discovery on that issue, but it is curious that now, in this DDJR #4, Insight seems to tout that order

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as a “win.” It now says that discovery such as it propounded last time is “undeniably relevant (as

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determined by this Court)” (DDJR #4, p.2, line 1) and asserts that its proposed compromise for

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solving the present dispute is “[b]ased on this Court’s own findings, a fair and adequate resolution

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of this dispute….” (id., p 2, line 13). In fact, the court in its order on DDJR #2 said that the

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discovery Insight had attempted to enforce was a “fishing expedition” and “an extreme example of

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discovery overreach” that “smacks of harassment.”

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DISCUSSION
Now, back to the present. In DDJR #4, the issue is the proper scope of discovery on

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Insight’s claims that Barker “encouraged” McArthur, Cronin, and Verduzco to solicit “certain”

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customers of Insight to terminate or alter their relationship with Insight. Notably, the Amended

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Counterclaim does not allege that Barker himself solicited any Insight customers.

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Insight says it served “written discovery” to Barker and subpoenas duces tecum on Beacon

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Hill, McArthur, Cronin, and Verduzco. It did not submit copies of this discovery to the court.

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Instead, it told the court it would “compromise” and accept a dialed-back version of what it had

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originally asked for. Here is the compromise:

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1. Barker, McArthur, Cronin, and Verduzco will produce a “list” of any hiring managers
or customers/accounts: (a) with whom they interacted during their Insight
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employment; and (b) with whom they have interacted during their Beacon Hill

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employment (Insight calls these “Overlap Customers”);

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2. Barker, McArthur, Cronin, and Verduzco will produce all electronic communications
they had with the Overlap Customers since they have left the employ of Insight;

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3. Barker, McArthur, Cronin, Verduzco, and Beacon Hill will produce

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documentation/information about revenue generated for Beacon Hill by the Overlap

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Customers since the date Barker’s employment with Insight ended; and

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4. The court will reopen the depositions of Barker, McArthur, Cronin, and Verduzco for
questions about discovery produced pursuant to 1, 2, and 3, above.

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First, the compromise’s definition of Overlap Customers assumes facts that may or may

United States District Court
Northern District of California

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not be true. It assumes that any customer of Insight did not become a customer of Beacon Hill

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until after Barker joined Beacon Hill. Is it not possible that both Insight and Beacon Hill had one

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or more mutual customers long before Barker left Insight?

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Insight tells the court that it has a list of every customer/account that Barker, McArthur,

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Cronin, and Verduzco interacted with during their Insight employment, so why ask them to create

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a “list”?

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Why should Barker produce communications with any customer/account, since he is not

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alleged to have wrongfully solicited any of Insight’s? Indeed, why should Beacon Hill do so?

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Why ask for electronic communications with every so-called Overlap Customer? The

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Amended Counterclaim alleges that McArthur, Cronin, and Verduzco were encouraged by Barker

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to solicit “certain” customers. How about Insight naming the customers or accounts that have

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been solicited? In fact, how about identifying the customers who have succumbed to solicitation

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and moved their business or cut way back? Why not focus in on where Insight lost a customer or

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lost some volume of business that might be attributed to solicitation by McArthur, Cronin, and

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Verduzco? It seems that the only relevant customers would be those that were solicited on

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account of Barker’s encouragement, which would exclude customers, if any, that may have been

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solicited absent any such encouragement.

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Here we get to the root of the problem the court has with the compromise discovery
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requests. The attorney for Barker, et al. tells the court that Insight’s Fed. R. Civ. P. 30(b)(6)

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witness testified that Insight had not looked into whether or why it had lost business from any

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customer, was not aware whether Barker, Cronin, McArthur or Verduzco solicited any Insight

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customers, and did not know if Beacon Hill had earned any revenue from any Insight customers.

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The court has not seen the actual testimony, but it is notable that Insight does not dispute its

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characterization.
Indeed, the absence of a denial from Insight perhaps explains why it wants wholesale

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information on every customer that Barker, McArthur, Cronin, or Verduzco ever dealt with at both

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Insight and Beacon Hill. It looks as if Insight wants “all electronic communications” with every

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so-called Overlap Customer because it cannot identify any actual, affected customer. This smells

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United States District Court
Northern District of California

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like another fishing expedition, and the court will not countenance it.
The request for preparation of any “lists” and for production of documents according to the

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compromise is denied. The subpoenas are quashed. The question of reopening depositions is

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moot.1
SO ORDERED.

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Dated: September 7, 2017

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HOWARD R. LLOYD
United States Magistrate Judge

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The court is not foreclosing appropriately framed discovery on the issues here.
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