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Depuy Synthes Sales, Inc. v. Edwards

United States District Court, E.D. Pennsylvania

May 15, 2014

DEPUY SYNTHES SALES, INC., Plaintiff,
v.
RYAN EDWARDS, Defendant

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[Copyrighted Material Omitted]

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For DEPUY SYNTHES SALES, INC., Plaintiff: LEIGH ANN BUZIAK, LEAD ATTORNEY, ANTHONY B. HALLER, STEPHANIE GANTMAN KAPLAN, BLANK ROME, LLP, PHILADELPHIA, PA.

For RYAN EDWARDS, Defendant: JASON P. STIEHL, MICHAEL D. WEXLER, LEAD ATTORNEYS, SEYFARTH SHAW LLP, CHICAGO, IL; ANNE KOZUL, PAUL J. GRECO, BUCHANAN INGERSOLL & ROONEY PC, PHILADELPHIA, PA.

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MEMORANDUM

YOHN, J.

DePuy Synthes Sales, Inc. (" Synthes" ) brings a breach of contract action against its former employee Ryan Edwards to enforce restrictive covenants contained in an employment agreement signed by Edwards on November 12, 2009. Presently before me is Edwards's motion to dismiss, transfer, or stay the action under Rule 12(b)(2), Rule 12(b)(3), Rule 12(b)(6), and 28 U.S.C. § 1404(a). For the following reasons, Edwards's motion will be denied.

I. Background[1]

Synthes is a Massachusetts-based medical device manufacturer with a craniomaxillofacial (" CMF" ) surgical implant division based in West Chester, Pennsylvania.[2] Edwards, a Californian, joined Synthes's

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CMF division in 2008 as an associate sales consultant. Concurrent with his hiring, Edwards signed a non-disclosure agreement as well as a separate employment agreement containing restrictive covenants not at issue in this case.

In 2009, Edwards accepted a promotion to sales consultant. This put Edwards in charge of Synthes's sales and business development efforts within a particular region of the San Francisco Bay area. Within his region, Edwards's job included formulating and implementing Synthes's pricing and customer recruitment strategies; developing and maintaining relationships with physicians and hospital personnel who play roles in determining what implants and/or instrumentations are used in particular surgeries; and serving as a technical resource to surgeons using Synthes's products. In preparation for this job, Edwards received specialized training from Synthes on the use of Synthes's products and the medical procedures with which they are associated, as well as coaching from Synthes on how to educate surgeons and operating room personnel about using Synthes's products. Though Edwards lived and worked in California, he received administrative, managerial, and training support from Synthes's offices in Pennsylvania; communicated daily with Synthes's Pennsylvania offices and Pennsylvania-based Synthes personnel; relied on Pennsylvania-originating product samples in developing customer relationships; and, when he completed sales, sent customer purchase orders to Synthes's Pennsylvania offices.

On November 12, 2009, concurrent with his promotion to sales consultant, Edwards signed a second employment agreement, which is the document at issue in this litigation. This 2009 agreement contained restrictive covenants prohibiting Edwards from (1) using or disclosing Synthes's confidential information; and (2) soliciting or servicing Synthes's customers located in is geographic area or that he dealt with in the previous two years, or soliciting or servicing prospective customers that he contacted in the previous two years. The agreement contained a choice of law and forum selection clause stating:

This agreement will be governed by Pennsylvania law applicable to contracts entered into and performed in Pennsylvania. I agree that this agreement shall exclusively be enforced by any federal or state court of competent jurisdiction in the Commonwealth of Pennsylvania and hereby consent to the personal jurisdiction of these courts.

On December 31, 2013, Edwards resigned from Synthes to take a position with the Stryker company, a different manufacturer of CMF surgical implants and, allegedly, a direct competitor of Synthes. The day of his resignation, Edwards filed a lawsuit against Synthes in the Northern District of California seeking declaratory judgment that the restrictive covenants in the 2008 employment agreement were contrary to California law and, therefore, invalid. On January 8, 2014, Synthes filed this action claiming that Edwards's employment with Stryker puts him in breach of the nonsolicitation covenants of his 2009 employment agreement and the nondisclosure covenant of his 2008 employment agreement. Concurrently with filing suit, Synthes moved for a preliminary injunction to enforce the covenants. On January 10, 2014, Edwards filed an amended complaint in the California litigation. Under the amended complaint,

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Edwards sought declaratory judgment against the restrictive covenants in the 2009 employment agreement as well as against the restrictive covenants in the 2008 employment agreement.

On January 24, 2014, Synthes, pointing to the forum selection clause in the 2009 agreement, moved in the California court to dismiss that action or to transfer it to the Eastern District of Pennsylvania. On February 3, 2014, Edwards filed the instant motion to dismiss this action, transfer it to the California court, or impose a stay of proceedings. On February 20, 2014, Synthes filed a second motion to transfer in the California action, this time on the basis of 28 U.S.C. ยง 1404(a). On March 10, 2014, Edwards filed a motion for summary judgment in the California action, which the California court thereafter denied without prejudice on the basis that the motion was premature. On April 3, 2014, the California court held a hearing on ...


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