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DENTSPLY INT'L, INC. v. BENTON

May 20, 1997

DENTSPLY INTERNATIONAL, INC., TULSA DENTAL PRODUCTS, INC., Plaintiffs
v.
BRETT C. BENTON, Defendant



The opinion of the court was delivered by: CALDWELL

 I. Introduction.

 Invoking our diversity jurisdiction, the plaintiffs, Dentsply International, Inc. and Tulsa Dental Products Inc. (Tulsa), Dentsply's wholly owned subsidiary, filed a complaint against the defendant, Brett C. Benton, a former employee of Tulsa. (We will refer to the plaintiffs collectively as "Dentsply" or the "plaintiff.") Dentsply seeks damages and injunctive relief for breach of an employment contract allegedly consisting of solicitation of Dentsply's customers and use of Dentsply's confidential information.

 We are considering the defendant's motion pursuant to Fed. R. Civ. P. 12(b)(2) to dismiss the complaint for lack of personal jurisdiction, which, in the alternative, seeks a transfer to the United States District Court for the Central District of California pursuant to 28 U.S.C. ยง 1631.

 The main question raised by Benton's motion is whether he is subject to personal jurisdiction in Pennsylvania by virtue of a forum selection clause in the employment contract. Benton contends that the clause is unenforceable and that he has no other contacts with Pennsylvania that would justify our exercise of jurisdiction over him.

 While the defendant bears the initial burden to raise the issue of personal jurisdiction, see Clark v. Matsushita Electric Industrial Co., Ltd., 811 F. Supp. 1061, 1064 (M.D. Pa. 1993), the burden then shifts to the plaintiff to prove, through the use of sworn affidavits or other competent evidence, that the exercise of jurisdiction is permissible. Id. In light of this standard, we present the following background to the motion. *fn1"

 II. Background.

 In May 1993, old Tulsa hired Benton as a sales manager. *fn2" (Complaint, P 8; Benton declaration, P 2). He did not execute an employment agreement at that time. (Benton declaration, P 2). In February 1994, Benton was promoted to national sales manager, and in February 1995, he was promoted to director of sales, becoming a nonvoting member of old Tulsa's executive board. (Complaint, PP 9, 11 and 12; Benton declaration, P 2).

 While he was employed by old Tulsa, Benton lived and worked in Oklahoma and he never visited Pennsylvania on business. Until its acquisition by Dentsply, old Tulsa had offices in Oklahoma and Tennessee, and most of Tulsa's employees still remain in those states although Tulsa opened an office in Pennsylvania after the acquisition. (Benton declaration, P. 8).

 In January 1996, Dentsply, through its subsidiary, Tulsa Dental Products, Inc., made the acquisition of old Tulsa by acquiring certain assets, including its technology and trade secrets and "the right to continue [old Tulsa's] business" and "to offer employment" to old Tulsa's employees. (Complaint, P 13)(brackets added). Dentsply has its principal place of business in York, Pennsylvania, and is engaged in the nationwide sale of dental products and devices. (Complaint, P 2).

 Also in January 1996, Benton signed the employment agreement with Tulsa that contained the covenant not to compete which gave rise to the instant lawsuit. The agreement had a choice-of-law provision, making Pennsylvania law applicable to its construction and enforcement, and a forum selection clause. The latter clause read as follows:

 (Complaint, exhibit A).

 In his declaration, Benton explained the circumstances leading up to the execution of the agreement. In May 1995, around the time Dentsply began its negotiations to acquire old Tulsa, Benton became concerned about his future with the latter when old Tulsa's general manager told him that old Tulsa's sales force would probably be overhauled if the acquisition happened. In Benton's view, some change [thus] seemed inevitable because Dentsply had a well-established sales network of at least several hundred employees, while Tulsa maintained a sales network of about 10 to 15 employees." (Benton declaration, P 3) (brackets added).

 Ominously, the general manager also refused to tell Benton about a meeting he had had "with Dentsply that outlined changes to be made to [old] Tulsa's sales force." (Id., P 4)(brackets added). Benton's concern about his future with Tulsa "escalated" when the general manager refused to discuss this matter with Benton, the director of sales. (Id.,)(brackets added).

 Benton executed the agreement at a January 1996 meeting held for all old Tulsa employees, including secretaries and clerical workers, to fill out forms related to administrative changes such as changes in the retirement plan. One of these forms was the employment agreement. Benton alleges:

 
Tulsa did not explain the terms of the employment agreement. Tulsa simply told the employees to fill out the forms. Although I did not understand the substance of the employment ...

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