Case No.

S147190

IN THE SUPREME COURT

OF THE STATE OF CALIFORNIA

RAYMOND EDWARDS II,

Plaintiffand Appellant,
v.
ARTHUR ANDERSEN LLP,
Defendant and Respondent.

AFTER A DECISION By THE COURT OF ApPEAL,

SECOND ApPELLATE DISTRICT, DIVISION THREE,
CASE No. B178246

Los ANGELES SUPERIOR COURT CASE No. BC 255796,

HONORABLE ANDRIA K. RICHEY, JUDGE

APPLICATION FOR PERMISSION TO FILE BRIEF AND BRIEF OF

AMICUS CURIAE EMPLOYERS GROUP IN SUPPORT OF DEFENDANT
AND APPELLANT ARTHUR ANDERSEN LLP

O'MELVENY & MYERS LLP

SCOTT H. DUNHAM (S.B. # 65683)
CHRISTOPHER W. DECKER (S.B. #229426)
400 South Hope Street
Los Angeles, CA 90071-2899
Telephone: (213) 430-6000

Attorneys for Amicus Curiae the Employers Group

 IN THE SUPREME COURT
OF THE STATE OF CALIFORNIA

RAYMOND EDWARDS II,

Plaintiffand Appellant,
v.
ARTHUR ANDERSEN LLP,
Defendant and Respondent.

AFTER A DECISION By THE COURT OF ApPEAL,

SECOND ApPELLATE DISTRICT, DNISION THREE,
CASE No. B 178246

Los ANGELES SUPERIOR COURT CASE No. BC 255796,

HONORABLE ANDRIA K. RICHEY, JUDGE

APPLICATION FOR PERMISSION TO FILE BRIEF OF AMICUS

CURIAE EMPLOYERS GROUP IN SUPPORT OF DEFENDANT
AND APPELLANT ARTHUR ANDERSEN LLP

Pursuant to Rule 8.520(f) of the California Rules of Court, proposed amicus

curiae the Employers Group CAmicus") respectfully submits the enclosed brief in
support of Defendant and Appellant Arthur Andersen LLP ("Defendant"). The
enclosed brief offers a unique perspective on one of the two issues presented by
this case: whether a contract provision releasing "any and all" claims the employee
might have against the employer encompasses nonwaivable statutory protections,
such as the employee indemnity protection of Labor Code § 2802.
For the reasons set forth below, Amicus respectfully urges this Court to
reverse the Court of Appeal's decision answering this question in the affirmative.

I. INTEREST OF AMICUS CURIAE

Headquartered in California, the Employers Group is the nation's oldest

and largest human resources management association, representing nearly 5,000
California companies of all sizes and in every industry. These constituent
companies employ approximately 2.5 million individuals. Amicus respectfully
submits that its collective experience in employment matters, including its
appearance as amicus curiae in state and federal forums over a period of many
decades, gives it a unique ability to focus on the short and long-term impact and
implications of the legal issue under consideration in this case. The Employers
Group (formerly known as "The Merchants and Manufacturers Association" and
"The Federated Employers") has been involved as amicus curiae in many
significant cases, including, but not limited to: Dyna-Med, Inc. v. Fair
Employment & Housing Com., 43 Cal. 3d 1379 (1987); Foley v. Interactive Data
Corp., 47 Cal. 3d 654 (1988); Newman v. Emerson Radio Corp., 48 Cal. 3d 973
(1989); Rojo v. Kliger, 52 Cal. 3d 65 (1990); Shoemaker v. Myers, 52 Cal. 3d I
(1990); Gantt v. Sentry Insurance, I Cal. 4th 1083 (1992); Hunter v. Up-Right,
Inc., 6 Cal. 4th 1174 (1993); City ofMoorpark v. Superior Court, 18 Cal. 4th 1143
(1998); Jennings v. Marralle, 8 Cal. 4th 121 (1994); Green v. Ralee Engineering
Co., 19 Cal. 4th 66 (1998); Carrisales v. Department ofCorrections, 21 Cal. 4th
1132 (1999); Reno v. Baird, 18 Cal. 4th 640 (1998); White v. Ultramm~ Inc., 21
Cal. 4th 563 (1999); Armendariz v. Foundation Health Psychcare Services, Inc.,
24 Cal. 4th 83 (2000); Guz v. Bechtel Nat 'l, Inc., 24 Cal. 4th 317 (2000); Cortez v.
Purolator Air Filtration Products Co., 23 Cal. 4th 163 (2000); Sav-on Drug
Stores, Inc. v. Superior Court, 34 Cal. 4th 319 (2004); Yanowitz v. L'Oreal, 36

2
Cal. 4th 1028 (2005); Smith v. Superior Court, 39 Cal. 4th 77 (2006); and Murphy
v. Kenneth Cole Productions, Inc., _ Cal. 4th _ (2007).
Amicus has a substantial interest in the outcome ofthis case because its
members regularly enter into general release agreements with employees upon
their separation from employment in exchange for a severance payment (as well as
in many other circumstances). These agreements typically include the same broad
"any and all" language which the Court of Appeal found encompassed
nonwaivable claims in this case. Until now, all parties assumed that such releases
were valid, lawful, and effective to release existing claims to the extent permitted
by law. If this Court, however, does not reverse the decision of the Court of
Appeal that such contracts are contrary to public policy, tens of thousands of
existing releases will be called into question. If such releases were held unlawful,
then employers may face liability for conditioning the severance payment upon
such a release. Moreover, such releases may be invalid in their entirety, possibly
reviving any number of claims which all involved thought were settled long ago.
Thus, Amicus has a strong interest in correcting the erroneous holding of the Court
of Appeal in this case and respectfully requests the opportunity to submit the
enclosed brief for this Court's consideration.

II. ISSUES IN NEED OF FURTHER BRIEFING

Amicus supports the arguments submitted by Defendant regarding the

second issue presented for review (as identified by this Court in its order of
January 17,2007) and does not seek merely to repeat them. Rather, Amicus will
present additional arguments and clarifications that will assist this Court in
evaluating the important legal issue presented.
The enclosed brief supplements the briefs submitted by Defendant in three
ways. First, it identifies an additional error in the Court of Appeal's reasoning that
will have far-reaching effects if not corrected. Specifically, it explains that the
Court of Appeal erred in holding that a release of indemnity claims arising under

3
California Labor Code § 2802 eonflicts with the antiwaiver provision in Labor
Code § 2804 because that statute only prohibits prospective waivers of the
protections in the Labor Code, not compromises of claims arising out of past
events. Under the Court of Appeal's logic, nonwaivable claims cannot be settled
by private agreement, an unprecedented rule that will create endless mischief for
parties and the cOUlis.
Second, the enclosed brief refutes the Court of Appeal's argument that the
general release at issue can only be interpreted in one manner, which would
necessarily include an attempted waiver of nonwaivable indemnification rights.
The enclosed brief explains the basis for an alternative interpretation of the general
release provision, under which the release extends only to those claims which the
releasor is legally able to surrender. In this way, the brief supplements
Defendant's argument that the Court of Appeal should have interpreted the release
so as to make it lawful. At the same time, it also counters Plaintiff's argument that
the plain language of the release does not allow a lawful interpretation of that
agreement.
Finally, the enclosed brief explains the negative impacts that the Court of
Appeal's holding will have on attempts to buy peace through a general release. In
particular, it shows how the holding will greatly expand the class of claims that are
immune to settlement and ean only be resolved by a judgment entered by the
court. It also explains the danger that the Court of Appeal's holding will unwind
existing settlements, while also greatly complicating the drafting of an enforceable
general release. Amicus offers a unique perspective on these issues, based on the
day-to-day experience of its members in resolving disputes arising out of the
employment relationship and attempting to achieve finality and repose.

4
III. CONCLUSION

For the aforementioned reasons, Amicus Curiae the Employers Group

respectfully requests that the Court accept the enclosed brief for filing and
consideration.

Dated: May 1'1 ,2007 Respectfully submitted,

O'MELVENY & MYERS LLP

SCOTT H. DUNHAM
CHRISTOPHER W. DECKER

By Jr
Sc6ttlf.Dunham
4- 4cv
Attorneys for Amicus Curiae the
Employers Group
LA3:1l32662.1

5
 Case No. S147190

IN THE SUPREME COURT

OF THE STATE OF CALIFORNIA

RAYMOND EDWARDS II,

Plaintiffand Appellant,
v.
ARTHUR ANDERSEN LLP,
Defendant and Respondent.

AFTER A DECISION By THE COURT OF ApPEAL,

SECOND ApPELLATE DISTRICT, DIVISION THREE,
CASE No. B178246

Los AJ'<GELES SUPERIOR COURT CASE No. BC 255796,

HONORABLE ANDRIA K. RICHEY, JUDGE

BRIEF OF AMICUS CURIAE EMPLOYERS GROUP

IN SUPPORT OF DEFENDANT AND APPELLANT
ARTHUR ANDERSEN LLP

O'MELVENY & MYERS LLP

SCOTT H. DUNHAM (S.B. # 65683)
CHRISTOPHER W. DECKER (S.B. # 229426)
400 South Hope Street
Los Angeles, CA 90071-2899
Telephone: (213) 430-6000

Attorneys for Amicus Curiae the Employers Group

 Case No. S147190

IN THE SUPREME COURT

OF THE STATE OF CALIFORNIA

RAYMOND EDWARDS II,

Plaintiffand Appellant,
v.
ARTHUR ANDERSEN LLP,
Defendant and Respondent.

AFTER A DECISION By THE COURT OF ApPEAL,

SECOND APPELLATE DISTRICT, DIVISION THREE,
CASE No. B178246

Los ANGELES SUPERIOR COURT CASE No. BC 255796,

HONORABLE ANDRIA K. RICHEY, JUDGE

BRIEF OF AMICUS CURIAE EMPLOYERS GROUP

IN SUPPORT OF DEFENDANT AND APPELLANT
ARTHUR ANDERSEN LLP

O'MELVENY & MYERS LLP

SCOTT H. DUNHAM (S.B. # 65683)
CHRISTOPHER W. DECKER (S.B. # 229426)
400 South Hope Street
Los Angeles,CA 90071-2899
Telephone: (213) 430-6000

Attorneys for Amicus Curiae the Employers Group

 TABL.E OF CONTENTS

Page

INTRODUCTION 1
SUMMARY OF FACTS 3
ARGUMENT AND AUTHORITIES 6
1. THE COURT OF APPEAL ERRONEOUSLY EQUATED A
RELEASE OF CLAIMS ARISING OUT OF PRIOR EVENTS
WITH AN ADVANCE WAIVER OF STATUTORY RIGHTS 6
A. A Release Of Claims Arising Out Of Prior Events Is Not A
Waiver For Purposes Of Labor Code § 2804 And Other
Antiwaiver Rules 6
B. The TONC Is An Enforceable Release Of Claims Arising Out
Of Past Events, Not An Invalid Advance Waiver Of Statutory
Protections 11
II. THE COURT OF APPEAL'S HOLDING THAT A RELEASE OF
"ANY AND ALL" CLAIMS INCLUDES NONRELEASABLE
CLAIMS IGNORES SETTLED PRINCIPLES OF CONTRACT
INTERPRETATION 12
III. THE COURT OF APPEAL'S HOLDING WILL HAVE
NEGATIVE CONSEQUENCES FOR EMPLOYERS AND
EMPLOYEES, JEOPARDIZING THE ENFORCEMENT OF
GENERAL RELEASES AND, THEREBY, GREATLY
COMPLICATE SETTLEMENT 15
A. The Court Of Appeal's Holding Greatly Expands The
Number Of Claims Which Cannot Be Settled By Private
Agreement, Fostering Litigation Over Finality And Repose 15
B. The Court Of Appeal's Holding Creates Potential Tort
Liability, Jeopardizing The Enforcement Of General Releases
And, Thereby, Greatly Complicates Settlement. 16
CONCLUSION 19

-1-
 TABLE OF AUTHORITIES

Page

CASES
Adams v. Philip Morris, Inc.,
67 F.3d 580 (6th Cir. 1995) 8
Alexander v. Gardner-Denver Co.,
415 U.S. 36 (1974) 8
Armendariz v. Foundation Health Psychcare Services, Inc.,
24 Cal. 4th 83 (2000) 7,8,9, 10, 17
Axa S.A. v. Union Pacific R.R. Co.,
269 F. Supp. 2d 863 (S.D. Tex. 2003) 8
Baker Pacific Corp. v. Suttles,
220 Cal. App. 3d 1148 (1990) 5, 6, 7, 9
California Bank v. Stimson,
89 Cal. App. 2d 552 (1949) 9
Callen v. Pennsylvania R.R. Co.,
332 U.S. 625 (1948) 8, 9
Constant v. Continental Tel. Co. ofIllinois,
745 F. Supp. 1374 (C.D. Ill. 1990) 9
County ofRiverside v. Sup. Ct.,
27 Cal. 4th 793 9
D'sa v. Playhut, Inc.,
85 Cal. App. 4th 927 (2000) 7
Edwards v. Arthur Andersen LLP,
47 Cal. Rptr. 3d 788 (2006) 4, 5, 13, 14
Farnham v. Superior Court (Sequoia Holdings, Inc.),
60 Cal. App. 4th 69 (1997) 8
Hamilton v. Oakland School Dist. ofAlameda County,
219 Cal. 322 (1933) 9
In re Retirement Cases,
110 Cal. App. 4th 426 (2003) 12
Jefferson v. California Dep 't ofYouth Authority,
28 Cal. 4th 299 (2002) 7,8,18
Latona v. Aetna u.s. Healthcare Inc.,
82 F. Supp. 2d 1089 (C.D. Cal. 1999) 7
Little v. Auto Stiegler, Inc.,
29 Cal. 4th 1064 (2003) 17
McClure v. McClure,
100 Cal. 339 (1893) 16,18
People v. Parmar,
86 Cal. App. 4th 781 (2001) 12

-)-
 TABLE OF AUTHORITIES
(continued)
Page

Plaza Hollister Ltd. Partnership v. County ofSan Benito,

72 Cal. App. 4th 1 (1999) 16, 18
Rogers v. General Elec. Co.,
781 F.2d 452 (5th Cir. 1986) 8
Safeco Ins. Co. ofAmerica v. Robert s.,
26 Cal. 4th 758 (2001) 13,18
Swenson v. File,
3 Cal. 3d 389 (1970) 12
Thompson v. Municipal Bond Co.,
23 Cal. App. 2d 402 (1937) 8
STATUTES
49 U.S.C.A. § 11706(c)(1) 8
Business & Professions Code § 16600 7
Cal. Civ. Code § 1668 7,8, 10
§ 1751 10
§ 1789.19 10
§ 1801.1 10
§ 3513 10,16,18
Cal. Gov't Code §§ 12900 et seq 7
Cal. Lab. Code § 219(a) 10
§§ 2800-2810 10
§ 2804 passim
Cal. Unemp. Ins. Code § 1342 10

OTHER AUTHORITIES
1 West's California Civil Code Forms, Obligations
(3d ed. 1989) 5
Black's Law Dictionary (8th ed. 2004) 13
Justice Ming W. Chin, et aI.,
Cal. Prac. Guide: Employment Litigation (The Rutter Group
2003) 5, 18

-11-
 IN THE SUPREME COURT
OF THE STATE OF CALIFORNIA

RAYMOND EDWARDS II,

Plaintiffand Appellant,
v.
ARTHUR ANDERSEN LLP,
Defendant and Respondent.

AFTER A DECISION By THE COURT OF ApPEAL,

SECOND ApPELLATE DISTRICT, DIVISION THREE,
CASE No. Bl78246

Los ANGELES SUPERIOR COURT CASE No. BC 255796,

HONORABLE ANDRIA K. RICHEY, JUDGE

BRIEF OF AMICUS CURIAE EMPLOYERS GROUP

IN SUPPORT OF DEFENDANT AND APPELLANT
ARTHUR ANDERSEN LLP

INTRODUCTION

Every day, employers and employees throughout California enter into

agreements whereby the employee abandons any lawsuit the employee may have
based on past alleged violations of the employee's rights in exchange for a
monetary payment or some other valuable consideration. The purpose of such
agreements is to "buy peace" - i.e., to resolve fully and finally all claims which
the employee may have against the employer so that the parties may go their

1
separate ways. To achieve that end, these agreements typically employ the most
expansive language possible, in order to ensure the released party that it is
receiving that for which it bargained - peace. That peace will prove elusive,
however, unless this Court corrects the unprecedented (and erroneous) holding of
the Court of Appeal that the standard form language employed in these agreements
makes them invalid and unlawful.
In this case, the Court of Appeal held that typical form language releasing
"any and all" claims based on events prior to the date of the release made the
agreement unlawful because it would necessarily encompass rights which are
nonwaivable as a matter oflaw. That holding was in error for two reasons. First,
the Court of Appeal confused the distinction between a compromise of disputed
claims and an advance waiver of future claims. The various antiwaiver rules
pronounced by the legislature and the courts generally invalidate only advance
waivers, not settlements of claims arising out of prior events. Were it otherwise, it
would be legally impossible to settle any claim which the legislature or courts
have declared nonwaivable. No California eourt has so held and this Court's
reeent deeisions reflect precisely the opposite.
Second, the Court of Appeal misinterpreted the general release at issue here
as extending to claims which cannot be surrendered as a matter oflaw. In so
doing, it disregarded settled rules for the interpretation of contracts which required
it to construe the contract in accordance with existing law, if possible. Indeed
such an interpretation was possible, as the critical language "employee hereby
releases and forever discharges" can be interpreted to mean "employee
extinguishes those legal obligations which he or she is legally able to extinguish."
The Court of Appeal overlooked this possible interpretation because it focused
exclusively on what was being released, as opposed to the meaning of "release
and ... discharge" in the first place. Thus, it incorrectly held that the release was
only susceptible to one interpretation and an unlawful one at that.

2
 The Court of Appeal's erroneous holding threatens the peace that a general
release is designed to achieve in several ways. First, by holding that an antiwaiver
statute also invalidates a compromise of claims arising out of past events, the
Court of Appeal creates a new law that claims asserting nonwaivable rights cannot
be settled by private agreement. Hence, all existing settlements of such claims are
void, and, in the future, such claims can only be resolved by a final judgment of a
court oflaw. Given the large number of rights which the legislature and courts
arguably have pronounced nonwaivable, such a rule would greatly reduce the
peace that parties are able to buy with a general release of claims.
Second, by holding that a standard general release of "any and all" claims
necessarily encompasses nonwaivable protections and, therefore, is unlawful, the
Court of Appeal has greatly complicated the drafting of an enforceable release
agreement. To ensure validity, future agreements must either specifically identify
all the claims to be released or specifically exclude all the claims which the law
deems nonwaivable. Either task would be burdensome, if not simply impossible.
Moreover, the penalty for any mistake would be high. Under the Court of
Appeal's holding, requiring another party to execute a flawed release would be a
"wrongful act" and the basis for tort liability. In addition, there is a risk that the
release would be unenforceable in its entirety, even as to claims which could have
been surrendered by a properly executed release. In short, where there was once
peace, there will now be risk and uncertainty.
For the reasons detailed below, this Court should reverse the Court of
Appeal's erroneous holding that the general release at issue here constituted an
unlawful attempt to waive nonwaivable statutory protections.

SUMMARY OF FACTS

The second issue on appeal concerns the interpretation of typical,

boilerplate language found in the Termination of Non-Compete Agreement (the
"TONC") releasing Defendant from liability for claims arising out of Plaintiffs

3
 employment. Like countless other employees, at the time of his separation
Plaintiff executed a broad general release (the "Release") in favor of his former
employer which provided:

"Employee does hereby release andforever discharge [Defendant}

from any and all actions, causes of action, claims, demands, debts,
damages, costs, losses, penalties, attorney's fees, obligations,
judgments, expenses, compensation or liabilities of any nature
whatsoever, in law or equity, whether known or unknown,
contingent or otherwise, that Employee now has, may have ever had
in the past or may have in the future against any ofthe Released
Parties by reason ofany act, omission, transaction, occurrence,
conduct, circumstance, condition, harm, matter, cause or thing that
has occurredfrom the beginning oftime up to and including the date
hereof, including, without limitation, claims that in any way arise
from or out of, are based upon or relate to Employee's employment
by, association with or compensation from [Defendant] or any of its
affiliated firms, except for claims (i) arising out of [Defendant's]
obligations set forth in this Agreement or (ii) for any accrued and
unpaid salary or other employee benefit or compensation owing to
Employee as of the date hereof." (App. 579 (TONC § led))
(emphasis added).)

The Court of Appeal held that this commonplace language contravened

public policy because it covered the employee's statutory indemnification rights,
which are nonwaivable as a matter oflaw under California Labor Code § 2804. 1
The court reasoned that, although the language did not expressly mention
indemnification rights, "[t]hey were necessarily encompassed within the clear
tern1S of the broad release. A broadly worded release covers all claims within the
scope of its language, even if the particular claim is not expressly listed."
Edwards v. Arthur Andersen LLP, 47 Cal. Rptr. 3d 788,807 (2006) (depublished)
(internal citations omitted). According to the court, since the statutes providing
employees with indemnification rights for expenses incurred in the course of their

IAll statutory references in this amicus brief are to the California Codes, unless
otherwise noted.
4
employment embody public policy and inure to the public benefit, a release of
those rights violates public policy and is void. Id. at 808-09. Moreover, requiring
an employee to execute such a release is a wrongful act, which can be the basis for
tort liability. Id. at 809.
The language which the Court of Appeal invalidated is standard form
language employed in countless agreements between employers and employees.
At the time of separation, it is commonplace for employers to offer the employee a
severance payment in exchange for a general release of all claims arising out of
the now-concluded employment relationship. The common practice in drafting
such releases is to use the broadest language possible without separately
identifying rights which cannot be surrendered as a matter oflaw. Indeed, this is
the practice recommended by widely-used and respected practice aids, such as the
one authored by Justice Chin of this Court. See, e.g., Justice Ming W. Chin, et aI.,
Cal. Prac. Guide: Employment Litigation) Forms 8:A & 8:B, at 8-86 & 8-107
(The Rutter Group 2003) (containing a form general release agreement releasing
all "claims" defined as "any and all manner of action or actions, cause or causes of
action ... of any nature whatsoever, known or unknown, fixed or contingent ...
by reason of any matter, cause, or thing whatsoever from the beginning of time to
the date hereof ...."); 1 West's California Civil Code Forms, Obligations § 1541,
form 3, at 573 (3d ed. 1989) (containing a form general release agreement
providing for release "of and from all claims ... of whatever kind or nature ...
relating to any matter whatsoever ....); see also Baker Pacific Cop. v. Suttles,
220 Cal. App. 3d 1148, 1156-57 (1990) (acknowledging that "'all' and 'any and
all' language ... is common to virtually every form release contemporarily and
heretofore used by practitioners").

5
 ARGUMENT AND AUTHORITIES

I. THE COURT OF APPEAL ERRONEOUSLY EQUATED A

RELEASE OF CLAIMS ARISING OUT OF PRIOR EVENTS WITH
AN ADVANCE WAIVER OF STATUTORY RIGHTS.

A. A Release Of Claims Arising Out Of Prior Events Is Not A

Waiver For Purposes Of Labor Code § 2804 And Other
Antiwaiver Rules.

The Court of Appeal held that the language of the TONC to "release and
forever discharge" Defendant from any and all claims based on prior events
conflicted with the prohibition in Labor Code § 2804 of agreements "to waive the
benefits of this article." This holding was in error because Section 2804, like
similar antiwaiver provisions found throughout the California Codes, merely
prevents a party from entering into an advance waiver of future claims asserting
rights covered by the antiwaiver provision. It does not prohibit a party from
settling existing claims asserting those same rights arising out of a prior event.
Indeed, prior to the decision of the Court of Appeal in this case, no California
court had applied any antiwaiver statute to invalidate a compromise of claims
asserting such rights. The Court of Appeal, however, blurred this critical
distinction between an unenforceable advance waiver and an enforceable
settlement agreement, leading to its erroneous conclusion.
The Court of Appeal relied on three cases to support its holding that a
release of indemnification rights arising out of prior events conflicted with the
antiwaiver provision contained in Section 2804. In each, however, the agreement
before the court was an advance waiver, not a retrospective compromise and
release. For example, in Baker Pacific Corp. v. Suttles, 220 Cal. App. 3d 1148
(1990), the court analyzed a pre-employment waiver ofthe right to sue third
parties (other than the employer) for injuries arising from future workplace
exposure to asbestos. Id. at 1151. The Baker court held that the waiver was void
because it exculpated those third parties from liability for their future fraud and

6
other intentional acts, in violation of Civil Code § 1668. Id. at 1154. Similarly, in
D'sa v. Playhut, Inc., 85 Cal. App. 4th 927 (2000), and Latona v. Aetna Us.
Healthcare Inc., 82 F. Supp. 2d 1089 (C.D. Cal. 1999), the courts analyzed
agreements not to compete and held them invalid under Business & Professions
Code § 16600 because they overly restricted the employees' ability to pursue
future economic opportunities. D'sa, 85 Cal. App. 4th at 930-31; Latona, 82 F.
Supp. 2d at 1091, 1094-97.
None of these cases invalidated a release of claims arising out of past
events. Indeed, the Baker court expressly acknowledged that the release before it
would be valid if it were limited to causes of action arising from past events.
Baker, 220 Cal. App. 3d. at 1156-57. Evidently, the court did not believe that the
prohibition in Civil Code § 1668 on contracts "to exempt anyone from the
responsibility for his own fraud or willful injury to the person or propeliy of
another" extended to releases "expressly designed for the settlement of cases." Id.
Indeed, prior to the decision of the COUli of Appeal in the instant case, no
California couli had held that an individual may not compromise a claim asseliing
a right which the legislature or the coulis have pronounced nonwaivable. To the
contrary, coulis routinely enforce compromises of such claims. The decisions of
this Court regarding claims under the Fair Employment and Housing Act (the
"FEHN'), Cal. Gov't Code §§ 12900 et seq., provide a case in point. This Court
held in Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83,
100-01 (2000), that a prospective waiver of the rights conferred by the FEHA
would be "contrary to public policy and unlawful". Yet, less than two years later,
this Couli recognized that a release of claims under the FEHA arising out of past
events was valid, holding that a general release of claims arising out of a past
injury barred litigation ofa FEHA claim arising out of that same injury. Jefferson
v. California Dep 't ofYouth Authority, 28 Cal. 4th 299,302,309-10 (2002). If the
logic of the Court of Appeal were sound, the Jefferson Couli should have held that
the FEHA claim was not barred because claims under the FEHA are nonwaivable,

7
as stated in Armendariz. The fact that thc Jefferson Court enforccd a general
release to bar a FEHA claim despite the antiwaiver rule in Armendariz proves that
an antiwaiver rule does not invalidate a release of claims arising out of past events.
The same can be seen in the law of fraud. Contractual releases of future
liability for fraud and other intentional wrongs are unenforceable by virtue of Civil
Code § 1668. See, e.g., Farnham v. Superior Court (Sequoia Holdings, Inc.), 60
Cal. App. 4th 69,71 (1997). Nonetheless, claims of fraud may be settled by
private agreement, and those agreements will be enforced by the courts. See, e.g.,
Thompson v. Municipal Bond Co., 23 Cal. App. 2d 402, 410 (1937).
The federal courts have made explicit what is implicit in these California
decisions - a rule prohibiting waiver of statutory rights does not prevent parties
from contracting to settle existing claims asserting those rights. The United States
Supreme Court held in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), that
"there can be no prospective waiver of an employee's rights under Title Vll," but
then immediately clarified that this antiwaiver rule would not preclude an
employee from releasing a cause of action under Title VII as part of a voluntary
settlement. Id. at 51-52.
Since then, the fedcral courts have repeatedly held Title VII claims barred
by a release of all claims arising out of prior events, all the while acknowledging
that a waiver of claims arising out of future events would be unenforceable. See,
e.g., Rogers v. General Elec. Co., 781 F.2d 452,454,456 (5th Cir. 1986); Adams
v. Philip Morris, Inc., 67 F.3d 580, 584-85 (6th Cir. 1995). The federal courts
have drawn the same distinction in applying other antiwaiver rules as well. See,
e.g., Axa S.A. v. Union Pacific R.R. Co., 269 F. Supp. 2d 863, 865-66 (S.D. Tex.
2003) (antiwaiver rule in 49 U.S.C.A. § 11706(c)(1) does not preclude private
settlements of claims under that section); Callen v. Pennsylvania R.R. Co., 332
U.S. 625, 630-31 (1948) (same conclusion regarding antiwaiver provision ofthe
Federal Employers Liability Act); Constant v. Continental Tel. Co. ofIllinois, 745

8
F. Supp. 1374,1379 (C.D. Ill. 1990) (same conclusion regarding policy against
waiver of claims under the Age Discrimination in Employment Act).
The different treatment of advance waivers and compromises of claims
arising out of prior events flows from the differing public policies at stake in each
situation. Where the legislature enacts a law for a public purpose, advance
waivers of those statutory protections undermines the public benefit to be gained
by the law, and makes it possible to avoid the law entirely by private agreement.
California Bank v. Stimson, 89 Cal. App. 2d 552, 555 (1949) (holding advance
waiver of statutory protections void under Section 3513 because "if [a party] could
be permitted to waive the provisions of the statute, the effect of the section could
be entirely nullified."); County ofRiverside v. Sup. Ct., 27 Cal. 4th 793,805
(allowing advance waivers of statutory rights would render those rights
"nugatory"). On the other hand, a compromise and settlement of a claim under
that law does not avoid the law but rather gives effect to it since there would be no
claim to compromise but for the existence of the law. See Callen, 332 U.S. at 630-
31 ("It is obvious that a release is not a device to exempt from liability, but is a
means of compromising claimed liability and to that extent recognizing its
possibility. ").
Moreover, the strong public policies favoring settlement of disputes and
repose provide additional reasons to enforce such compromises, even though an
advance waiver of the same claims would be unenforceable. See Baker, 220 Cal.
App. 3d at 1157 (policy of repose justifies enforcement of provisions in settlement
agreement that would not be enforceable in an advance waiver); Hamilton v.
Oakland School Dist. ofAlameda County, 219 Cal. 322,329 (1933) ("[l]t is the
policy of the law to discourage litigation and to favor compromises of doubtful
rights and controversies, made either in or out of court."). This Court made a
similar point in Armendariz when it commented that a pre-dispute agreement to
arbitrate FEHA claims that did not meet certain minimum requirements was
tantamount to a prohibited waiver ofFEHA rights, while a post-dispute agreement

9
to arbitrate that same claim need not meet those same requirements to be
enforceable. Armendariz, 24 Cal. 4th at 103 n.8.
The error in reading antiwaiver rulcs to prohibit releases of claims arising
out of prior events is evident if one considers the implications of the Court of
Appeal's holding. If it were indeed the law that a release of claims arising out of
past events is a "waiver" for purposes of any antiwaiver rule, then any private
agreement releasing such claims will be unenforceable, making it impossible to
settle these claims outside of court. Thus, the only way to resolve a claim
asserting a nonwaivable right will be to bring suit and enter judgment, either by
consent of the parties or by judicial decision. But, there are easily dozens of
statutory antiwaiver provisions both inside and outside the employment law
context,2 some of which are extremely broad. 3 If each of these pronouncements
were also a bar to settlement of such claims, then not only would there be quite a
number of claims that henceforth can only be resolved by judicial action, but
existing settlements of such claims are void, re-opening any number of disputes
which the parties thought settled long ago. The fact that, up until now, parties
have freely settled these claims by private agreement demonstrates a widespread

2 See, e.g., Cal. Unemp. Ins. Code § 1342 (rights or benefits under the
Unemployment Insurance Act cannot be waived); Cal. Lab. Code § 219(a)
(statutory provisions regulating the payment of wages cannot be altered by private
agreement); Cal. Lab. Code § 2804 (any agreement to waive the employer's
obligations under Lab. Code §§ 2800-2810 is "null and void"); Cal. Civ. Code
§ 1751 (any waiver by a consumer of the provisions of the Consumers Legal
Remedies Act is "unenforceable and void"); Cal. Civ. Code § 1801.1 (buyer may
not waive the protections of the Unruh Act governing retail installment sales); Cal.
Civ. Code § 1789.19 (buyer may not waive the protections of the Credit
Services Act of 1984).
3 See, e.g., Cal. Civ. Code § 1668 (declaring void "[a]ll contracts which have for
their object, directly or indirectly, to exempt anyone from responsibility for his
own fraud, or willful injury to the person or propeliy of another, or violation
oflaw, whether willful or negligent"); Cal. Civ. Code § 3513 (prohibiting
agreements to waive the benefits of any law established for a public reason).

10
understanding among practitioners that the various antiwaiver rules are no bar to
compromising a claim asserting nonwaivable rights.
B. The TONC Is An Enforceable Release Of Claims Arising Ont Of
Past Events, Not An Invalid Advance Waiver Of Statntory
Protections.

As shown above, given that Labor Code § 2804, like other antiwaiver
statutes, only prohibits advance waivers, the TONC could only run afoul of that
statute if it purported to waive claims for indenmification arising out of future
events. In fact, by its express language, the TONC only covers claims which the
employee has, had or will have "by reason of any act, omission, transaction,
occurrence, conduct, circumstance, condition, hann, matter, cause or thing that
has occurredfrom the beginning oftime up to and including the date hereof"
(App. 579 (TONC § led»~ (emphasis added).) Nothing in the TONC purports to
surrender legal rights arising out of future events. Thus, the TONC is not an
advance waiver, and the antiwaiver rule of Labor Code § 2804 does not come into
play.
Although the Court of Appeal did not distinguish between advance waivers
and settlement of claims arising out of past events, it did at one point suggest that
the TONC extended to "past, present andfuture" claims. This is a misreading of
the TONC. In fact, it covers claims which the Plaintiff might have in the future,
but only if Plaintiff has that claim "by reason of any act ... that has occurred from
the beginning of time up to and including the date hereof" (App. 579 (TONC
§ l(d».) Claims which Plaintiff may have in the future arising out of future events
are not included. This, in tum, is precisely the distinction between an
unenforceable advance waiver and a valid compromise of claims. Defendant did
not ask Plaintiff to surrender his right to indemnification for expenses he might
incur in the future related to his employment, but only to settle any claim he might
have for expenses already incurred. Thus, the TONC did not implicate the
concerns of the antiwaiver rule in Labor Code § 2804 and the Court of Appeal
erred in invalidating the TONC on that basis.
11
II. THE COURT OF APPEAL'S HOLDING THAT A RELEASE OF
"ANY AND ALL" CLAIMS INCLUDES NONRELEASABLE
CLAIMS IGNORES SETTLED PRINCIPLES OF CONTRACT
INTERPRETATION.

The Court of Appeal committed an additional error in holding that the

scope of the TONC extended to claims which the employee was legally incapable
of surrendering. Even assuming, arguendo, that the Court of Appeal were correct
that an antiwaiver rule such as Labor Code § 2804 also prohibits retrospective
releases of claims, the court still should have held the TONC valid because it does
not encompass any nonwaivable rights. The trial court held - and Defendant
argued on appeal- that, since the TONC did not expressly mention
indenmification rights (or any other nonwaivable right), it should not be
interpreted as surrendering them, as any such provision would be void as a matter
oflaw in any event. The Court of Appeal, however, rejected this sound reasoning,
concluding, instead, that the phrase "any and all ... claims" necessarily
encompassed indemnification rights, even though the release made no mention of
those rights. Edwards, 47 Cal. Rptr. 3d at 807 (depublished). In so doing, it
misconstrued the language ofthe TONC, and ignored settled principles of contract
interpretation.
Defendant's briefs accurately state the relevant principles of contract
interpretation and Amicus joins in those arguments. Specifically, in interpreting a
contract, a court should presume that the parties knew the law and intended to
comply with it. In re Retirement Cases, 110 Cal. App. 4th 426,447 (2003); see
also Defendant's Opening Brief ("Def. 's Open.") at 49-50. Hence, all applicable
laws in existence at the time of contracting are incorporated into the contract, as if
fully set forth therein. Swenson v. File, 3 Cal. 3d 389, 393 (1970); see also Def.'s
Open. at 49. Moreover, the court must construe the contract to be lawful to the
extent possible. People v. Parmar, 86 Cal. App. 4th 781, 802 (200 I); see also
Def.'s Open. at 57-60.

12
 The Court of Appeal failed to apply any of these principles, asserting that,
by its plain language, the TONC clearly purports to waive indemnification rights.
Edwards, 47 Cal. Rptr. 3d at 807 (depublished). The Court of Appeal- and
Plaintiff - reached this conclusion by focusing entirely on what the TONC
purports to "release and forever discharge," namcly: "any and all ... claims ...
whether known or unknown, contingent or otherwise, that Employee now has,
may have ever had in the past or may have in the future." (App. 579 (TONC
§ l(d)).) Neither, however, analyzed what it means to "release and forever
discharge" a claim in the first place. As a result, both the court and plaintiff
overlooked an alternative reading that would not encompass indemnification
rights - or any other nonwaivable right - and, thus, would avoid any conflict with
Labor Code § 2804 and the public policy it expresses.
According to Black's Law Dictionary, "release" and "discharge" may be
considered synonyms, both meaning "to extinguish a legal duty." Black's Law
Dictionary at 495, 1315 (8th ed. 2004). That definition, in tum, limits the terms to
duties which can be extinguished, since, by definition, one cannot extinguish a
legal duty which the law does not allow one to extinguish. Thus, it is possible to
read the operative verbs in the TONC as meaning, in effect: "Employee
extinguishes those claims which the Employee is legally able to extinguish by
entering into this release." That interpretation would avoid any conflict with
Labor Code § 2804 (or any other antiwaiver rule) and would incorporate existing
law into the contract, in accordance with the presumed intent of the parties. It
would also render the general release provision entirely lawful and enforceable.
Given the rules of interpretation set forth above, since this interpretation is
possible, it is also required.
This alternative interpretation is also entirely consistent with the common
understanding of a general release of claims, as well as the presumed (if not
actual) intent of the parties to such agreements. Cf Safeco Ins. Co. ofAmerica v.
Robert s., 26 Cal. 4th 758, 763 (2001) ("The goal of contractual interpretation is to

13
 detennine and give effect to the mutual intention of the parties."). Employers do
not typically ask employees to surrender rights which they are legally incapable of
surrendering, which is why one rarely sees express waivers of future
indemnification rights, workers' compensation claims or any of the other myriad
rights which the courts and legislature have pronounced nonwaivable. Rather,
employers draft releases to cover "any and all claims" which can be surrendered.
These releases do not state the obvious ~ that they do not extend to claims which
the employee is legally incapable of surrendering ~ because that rule is already
incorporated into the contract itself both by operation oflaw and by the meaning
of the words "release" and "discharge." Moreover, expressly excluding these
nonwaivable claims would be an unreasonable burden given the long list of
nonwaivable rights employees enjoy.4 It must also be presumed that employees
share their employer's intent, since employees are presumed to know the law and
to contract in light of it.
The Court of Appeal hesitated to charge Plaintiff with knowledge of the
relevant law, expressing concern that a broad, unqualified release would have an
in terrorem effect on unsophisticated employees who would not realize that it
could not affect rights which the courts and legislature had declared nonwaivable.
Edwards, 47 Cal. Rptr. 3d at 810 (depublished). In essence, this amounts to an
argument that the court should construe the contract to make it unlawful and void,
because some employees might misinterpret it in that manner.
Moreover, if the Court of Appeal's goal was to place the burden on
employers to avoid language which "unsophisticated" employees might
misinterpret, the court chose the wrong path to follow. Under the Court of
Appeal's ruling, "any and all ... claims" is unacceptably broad and, thus, drafters
must list each covered claim separately (or, alternatively, expressly exclude each
nonwaivable right), making the language of a general release even more
complicated for unsophisticated parties and, hence, even more prone to

4 See statutes identified at notes 2 & 3, supra.

14
misinterpretation. Plaintiff's proposed solution - adding the phrase "to the extent
enforceable by law" - does not address the court's concern, since unsophisticated
parties do not know where the limits oflegal enforcement lie. A laundry list of all
of the potentially nonwaivable claims would hardly make the release more
accessible to those the Court of Appeal seeks to protect. Rather, the true solution
is to encourage parties to seek legal advice before entering into a general release,
not to abandon the settled rules for the interpretation of such agreements.

III. THE COURT OF APPEAL'S HOLDING WILL HAVE NEGATIVE

CONSEQUENCES FOR EMPLOYERS AND EMPLOYEES,
JEOPARDIZING THE ENFORCEMENT OF GENERAL
RELEASES AND, THEREBY, GREATLY COMPLICATE
SETTLEMENT.
A. The Court Of Appeal's Holding Greatly Expands The Number
Of Claims Which Cannot Be Settled By Private Agreement,
Fostering Litigation Over Finality And Repose.

As explained above, the Court of Appeal's holding that an antiwaiver

statute such as Labor Code § 2804 prohibits retrospective releases of those claims
it covers makes it impossible to settle any such claim by private agreement. Such
agreements will now be unenforceable since, by the Court of Appeal's logic, they
"waive" a right which the legislature or the courts have declared nonwaivable.
Hence, existing settlements of such claims are void and, in the future, the only
way to resolve such a claim will be to obtain a final judgment or order from a
court of law. Both results greatly undermine the public policies favoring the
settlement of claims without any corresponding benefit.
As noted above, there are easily dozens of statutory protections which the
legislature or courts have declared nonwaivable. Moreover, the list continues to
expand since, in many instances, no court has yet determined whether a particular
statute was enacted for a public purpose and, thus, is nonwaivable by virtue of

15
 Civil Code § 3513. 5 Under the holding of the Court of Appeal, all existing
settlements of claims arising under these statutes are void and the claims
themselves revived for further litigation. Naturally, one can expect that a large
number of these claims will be litigated, and even if they were not, the released
party will no longer be able to rely on the settlement agreement to protect it. Thus,
the peace which thc released party attempted to purchase is destroyed and will
only be restored once the applicable statute oflimitations has expired. Moreover,
in the future, settling such claims outside of court will not be a viable means of
resolving them. Rather, each one will have to proceed to judgment, either by
consent of the parties or by judicial action. The increased burden on the courts,
and inefficiencies for the parties, are evident.
These consequences undermine settlement, finality and reposc, each of
which is an important public benefit. McClure v. McClure, 100 Cal. 339, 343
(1893) (settlement agreements "are highly favored as productive of peace and
goodwill in the community, and reducing the expense and persistency of
litigation."); Plaza Hollister Ltd. Partnership v. County ofSan Benito, 72 Cal.
App. 4th 1, 12 (1999) (same, quoting McClure). Moreover, they do so without
providing any offsetting benefit to parties, the public or the courts. Unwinding (or
preventing) negotiated settlements of these claims is not necessary to uphold the
underlying rights: the very fact that the releasor obtained something of value in
exchange for a surrender of those rights demonstrates that the rights have been
upheld.
B. The Court Of Appeal's Holding Creates Potential Tort Liability,
Jeopardizing The Enforcement Of General Releases And,
Thereby, Greatly Complicates Settlement.

By holding that a typical general release of "any and all claims" includes
claims which cannot be released as a matter oflaw, the Court of Appeal has

5 Section 3513 states in its entirety: "Anyone may waive the advantage of a law
intended solely for his benefit. But a law established for a public reason cannot be
contravened by a private agreement." Cal. Civ. Code § 3513.
16
greatly increased the risk and uncertainty associated with these agreements. As
this case demonstrates, if a release of "any and all claims" were to cover
nonreleasable claims, then requiring an employee (or any other party) to execute
such a release could potentially be a "wrongful act" and the basis for tort liability.
Moreover, such a release may be void in its entirety, not simply void with respect
to nonreleasable claims. Under the Court of Appeal's interpretation, the general
release provision may itself be illegal, since it includes an attempt to release
nonreleasable claims, in violation of public policy. Thus, it is unenforceable,
unless the court is able to restrict it to its lawful objects and apply it in that
manner. See Armendariz, 24 Cal. 4th at 122-24. 6
Restriction, however, is impossible if the court finds that "the central
purpose of the contract is tainted with illegality." Id. at 124. The result cannot be
predicted in advance, and could vary from one case to another depending on the
terms of the particular release and the relationship of the parties. See, e.g., id. at
124-25 (discussing multiple factors to be considered in determining whether a
contract is tainted with illegality); Little v. Auto Stiegler, Inc., 29 Cal. 4th 1064,
1074-76 (2003) (same). The enforceability of general releases will then depend on
case-by-case determinations. Rather than assuring finality and repose, these
standard form releases will now create uncertainty as to what, if anything, has
been released and whether the releasee may be at risk for insisting that the releasor
enter into such an agreement. Moreover, if the release were declared a nullity,
then the Court of Appeal's interpretation will have produced the exact opposite of

6 Severance, the other option for enforcing the legal provisions of a contract which
includes some illegal provisions, is of no use here. Since, under the Court of
Appeal's reasoning, the provision in which thc releasor "releases and forevcr
discharges any and all ... claims" is itself illegal, the court would havc to sever
that provision from the contract. Once this language is severed, the release will no
longer be general, but will only cover whatever claims are specifically identified
in the agreement. Thus, severance of the illegal provisions would not save the
contract as to all of its lawful objects, but only those which the drafters happened
to identify in the release.
17
the bargain intended by the parties. Certainly, both intended that the releasee
would receive at least some protection against future litigation in exchange for the
consideration it paid to the releasor. Cf Safeco, 26 Cal. 4th at 763 (the intent of
the contracting parties should guide the interpretation of the contract).
Given the widespread use of standard form releases covering "any and all"
claims, see, e.g., Justice Ming W. Chin et aI., Cal. Practice Guide: Employment
Litigation at 8-86 & 8-107, the potential for controversy and litigation arising out
of previously-settled disputes is substantial. Moreover, to avoid these problems in
the future, practitioners will have to abandon the shorthand "any and all" and,
instead, specifically identify each and every claim to be released, or expressly
exclude each and every nonreleasable claim. Neither solution is workable,
however. It is not always certain whether a particular claim is releasable. Even
where a statute does not include an antiwaiver provision, it may still be covered by
the general antiwaiver rule in Civil Code § 3513, but the COUlis have not yet
considered that issue for every single statute in the California Codes. In addition,
even if reasonable certainty could be achieved, the resulting list of claims would
be long and cumbersome, rendering the release indecipherable. This Court
recognized in Jefferson v. California Dep 't of Youth Authority the importance of
avoiding such a requirement:
"[I]f courts did not enforce general releases, an employer ... seeking
a comprehensive settlement, would have to struggle to enumerate all
claims the employee might plan to allege. The employer would
never be able to know for sure that it had thought of every claim, and
therefore it would never be able to put a definitive end to the matter.
Employers would then be disinclined to enter into settlements,
because certainty as to the full extent ofliability is one factor that
motivates employers to choose settlement over litigation." Id. at
306.

In the end, both past and future settlements would become much more precarious,
if not impossible, undermining the public interest in the resolution of disputes,

18
finality and repose. See McClure, 100 Cal. at 343; Plaza Hollister Ltd.
Partnership, 72 Cal. App. 4th at 12.

CONCLUSION

For all the foregoing reasons, Amicus Curiae the Employers Group
respectfully requests that this Court reverse the erroneous holding of the Court of
Appeal that an antiwaiver rule such as Labor Code § 2804 makes unlawful an
agreement to "release and forever discharge" a party from "any and all" claims
arising out of prior events. Rather, Amicus respectfully requests that this Court
clarify that (1) such antiwaiver rules do not apply to a retrospective release of
claims, and (2) a general release of any and all claims does not encompass any
claim which cannot be released as a matter oflaw.

Dated: May --'!L, 2007 Respectfully submitted,

O'MELVENY & MYERS LLP

SCOTT H. DUNHAM
CHRISTOPHER W. DECKER

BY~-+!V~--c;L-~--¥b~_
Scd'tt H. Dunham
Attorneys for Amicus Curiae the
Employers Group

19
 CERTIFICATE OF COMPLIANCE
PURSUANT TO RULE OF COURT 8.204(c)(1)

I, Scott H. Dunham, declare:

I. I am an attorney at law duly licensed to practice before all Courts of

the State of California and am a partner ofO'Melveny & Myers LLP, attorneys of
record for Amicus Curiae the Employers Group.

2. According to the computer program used to prepare this brief, the

word count, including footnotes, of this brief is 6,441 words.

I declare under penalty of perjury under the laws of the State of California
that the foregoing is true and correct.

11
EXECUTED this ~ day of May 2007, at Los Angeles County,
California.

20
 PROOF OF SERVICE

I, Carol R. Hawkins, declare:

I am a resident of the State of California and over the age of eighteen years,
and not a party to the within action; my business address is 400 South Hope Street, Los
Angeles, CA 90071-2899. On May 14, 2007, I served the within document(s):

APPLICATION FOR PERMISSION TO FILE BRIEF AND BRIEF OF

AMICUS CURIAE EMPLOYERS GROUP; IN SUPPORT OF
DEFENDANT AND APPELLANT ARTHUR ANDERSEN LLP;

BRIEF OF AMICUS CURIAE EMPLOYERS GROUP IN SUPPORT OF

DEFENDANT AND APPELLANT ARTHUR ANDERSEN LLP

by placing the document(s) listed above in a sealed envelope with postage

thereon fully prepaid, in the United States mail at Los Angeles, California
addressed as set forth below.

Wayne S. Flick (SBN 149525) Kristine L. Wilkes (SBN 116693)

Yury Kapgan (SBN 218366) Colleen C. Smith (SBN 231216)
LATHAM & WATKINS LLP Shireen M. Becker (SBN 237930)
633 West Fifth Street, Suite 4000 LATHAM & WATKINS LLP
Los Angeles, CA 90071-2007 600 West Broadway, Suite 1800
Tel.: (213) 485-1234 San Diego, CA 92101-3375
Fax: (213) 891-8763 Tel.: (619) 236-1234
wayne.s.flick@lw.com Fax: (619) 696-7419
Kristine.wilkes@lw.com

Richard A. Lovc, Esq. Marc J. Poster, Esq.

Beth N. Shenfeld, Esq. Greines, Martin, Stein & Richland LLP
Law Offices of Richard A. Love 5700 Wilshire Blvd., Suite 375
11601 Wilshirc Blvd., Suite 2000 Los Angeles, CA 90036-3626
Los Angeles, CA 90025

Paul Grossman, Esq. Erika C. Frank, Esq.

California Employment Law Council General Counsel
Employers Group California Chamber of Commerce
515 S. Flower Street, 25th Floor 1215 K Street, Suite 1400
Los Angeles, CA 90071 Sacramento, CA 95812-1736

LAJol13J038.1
 Jeffrey A. Berman, Esq.
Sidley Austin LLP
555 W. Fifth Street, Suite 4000
Los Angeles, CA 90013-1010

Clerk of the Court Clerk of the Court

California Court of Appeal Superior Court of Los Angeles
Second District, Division Three III N. Hill Street
Ronald Reagan State Building Los Angeles, CA 90012
300 South Spring Street
Second Floor
Los Angeles, CA 90013

I declare under penalty of petjury under the laws of the State of California
that the above is true and correct.

Executed on May 14, 2007, at Los Angeles, California.

Carol R. Hawkins