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BEHAVIORAL HEALTH INDUS. NEWS v. LUTZ

November 4, 1998

BEHAVIORAL HEALTH INDUSTRY NEWS, INC. d/b/a OPEN MINDS, Plaintiff
v.
LORRIE L. LUTZ, Defendant



The opinion of the court was delivered by: CALDWELL

MEMORANDUM

 I. Introduction.

 The plaintiff, Behavioral Health Industry News, Inc., d/b/a/ Open Minds ("BHIN"), a corporation with its principal place of business in Gettysburg, Pennsylvania, filed a complaint against the defendant, Lorrie L. Lutz, a former employee of BHIN and a resident and citizen of New Hampshire, for breach of a written employment agreement. BHIN seeks specific performance against Lutz of a clause in the agreement prohibiting her from contacting BHIN's clients.

 We are considering Lutz's motion to dismiss for lack of personal jurisdiction. Although Lutz argues that she lacks sufficient personal contact with Pennsylvania to allow the court to exercise personal jurisdiction over her, her motion can be denied because she consented to jurisdiction by way of the forum selection clause in the employment agreement.

 II. Background.

 This background is based on the complaint and the undisputed facts as they appear from evidence in the record. On or about July 15, 1997, Lutz executed a two-year employment contract with BHIN to act as a consultant in the field of child welfare. Lutz had previously operated her own consulting business and had had clients in various states. In the past, she had also been the Director of Child Welfare for the State of New Hampshire and the Director of Catholic Charities for the State of Minnesota.

 Paragraph 10(C) of the agreement prohibits Lutz from soliciting BHIN's clients for a 24-month period after termination of the agreement. The nine-page agreement also contains a forum selection clause which reads as follows:

 
Any action arising out of or relating to any of the provisions of this Agreement may, at the election of the Employer, be brought and prosecuted only in the courts of the Commonwealth of Pennsylvania, and in the event of such election the parties hereto consent to the jurisdiction and venue of said courts.

 (Complaint, exhibit A, P 15).

 Before signing the agreement, Lutz discussed the following terms with Monica E. Oss, BHIN's president: (1) the noncompete provision, (2) BHIN's option on a manuscript Lutz had written, (3) compensation, (4) severance pay, and (5) Lutz's right to terminate the agreement with notice. They did not discuss the forum selection provision, and Lutz asserts that she was unaware of it until this litigation was filed. Lutz came to Pennsylvania at least one time to discuss the agreement, and she returned to New Hampshire with it unsigned. Lutz executed the agreement in New Hampshire.

 With about 14 months left on the agreement, Lutz resigned in May of 1998. Thereafter, BHIN filed this suit, seeking to enforce the noncompete provision.

 III. Discussion.

 In moving to dismiss for lack of personal jurisdiction, Lutz argues that the forum selection clause is unenforceable, relying mainly on The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S. Ct. 1907, 32 L. Ed. 2d 513 (1972), and Dentsply International Corp. v. Benton, 965 F. Supp. 574 (M.D. Pa. 1997) (Caldwell, J.). Based on these cases, she argues that the clause should be invalidated because: (1) it was the result of unequal bargaining power between herself as employee and BHIN as employer; and (2) BHIN never explained the clause to her, she was unaware of it, and the clause is merely "boilerplate" that BHIN "drafted to its advantage" and buried on page eight of a nine-page agreement.

 In The Bremen, the Supreme Court held that forum selection clauses should generally be upheld unless the facts show that enforcement would be unfair or unreasonable or that the agreement was procured through fraud, undue ...


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