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Former Employee Who Won Arbitration Against Former Employer May Sue for Malicious Prosecution
Description An employee who went to work for a competitor was sued by their former employer on numerous counts. Matter was settled in arbitration in favor of employee. The fact that arbitration was used to help resolve the prior litigation does not preclude the employee from now suing the former employer for malicious prosecution.
Topic Alternate Dispute Resolution
Key Words Arbitration; Malicious Prosecution
C A S E   S U M M A R Y
Facts Brennan, a Tremco employee, went to work for a competitor. He was then sued by Tremco for breach of contract, conversion, misappropriation of trade secrets, intentional interference with prospective economic advantage, and unfair competition. After three years of litigation, Brennan obtained summary judgment on two of the claims. The parties then agreed to arbitrate the remaining claims. The arbitrator ruled for Brennan on the remaining claims and the trial court confirmed the award and entered judgment for Brennan. Brennan then sued Tremco for malicious prosecution. The trial court dismissed the suit. Brennan appealed.
Decision Reversed. To establish a cause of action for malicious prosecution, a plaintiff must show that the prior action 1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, the plaintiff's, favor; 2) was brought without probable cause; and 3) was initiated with malice. The fact that there was arbitration in the previous proceedings does not change the ability of Brennan to bring this action. He has stated a cause of action against his former employer and the case should proceed.
Citation Brennan v. Tremco, Inc., 92 Cal.Rptr.2d 821 (Ct. App., 2nd Dist., Calif., 2000)

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