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Adhesives Research, Inc. v. Newsom

United States District Court, M.D. Pennsylvania

April 13, 2015

SUSAN NEWSOM, Defendant.


WILLIAM W. CALDWELL, District Judge.

I. Introduction

We are considering a Motion for Preliminary Injunction. (Doc. 2). This matter relates to an employment dispute between Adhesives Research, Inc. (Plaintiff) and its former employee, Susan Newsom (Defendant). Plaintiff alleges that by working for one of its competitors, Defendant breached a covenant not to compete, engaged in unfair competition, and will inevitably misappropriate trade secrets. (Doc. 1). On February 13, 2015, Plaintiff filed a Motion for Preliminary Injunction, seeking to enjoin Defendant from working for her current employer and from disclosing confidential information. (Doc. 2). For the reasons discussed below, we will deny Plaintiff's motion.

II. Background

Plaintiff is a manufacturer of specialty tape. (Doc. 1 at 2; Doc. 19 at 21). It produces rolls of adhesives which it sells as a raw material to other businesses. (Doc. 19 at 21). Plaintiff's customers convert the tape into a final product that is sold to consumers in the medical, pharmaceutical, electronics, and industrial markets. (Id.). Although based in Glen Rock, Pennsylvania, Plaintiff maintains facilities in Europe, Asia, and South America, and it sells its products to customers throughout the world. (Id.).

Between September of 2000 and August of 2014, Defendant was employed by Plaintiff. Defendant worked for Plaintiff almost exclusively from her home in California. (Doc. 14-1 at 2; Doc. 19 at 42). She communicated with Plaintiff's headquarters by telephone on a daily basis, and she traveled to Plaintiff's Pennsylvania facility six to eight days a year to attend training and seminars. (Doc. 1 at 3; Doc. 14 at 2; Doc. 19 at 25, 64). For the first thirteen years of her employment, Defendant held the position of Medical Marketing Manager. (Doc. 19 at 22). In this position, Defendant was responsible for selling the company's products and services to customers in the western half of the United States. (Doc. 19 at 23). In 2013, Defendant was promoted to Pharmaceutical Business Manager. (Doc. 19 at 22). As business manager, Defendant was responsible for the oversight of Plaintiff's pharmaceutical sales force, and she assisted with the development and execution of Plaintiff's strategic business plan. (Doc. 19 at 27-28, 62). In both of Defendant's positions, she had access to Plaintiff's confidential business information, and she had frequent contact with Plaintiff's customers. (Doc. 19 at 23-26).

In January of 2012, intending to protect its confidential information, Plaintiff required all of its employees, including Defendant, to sign a "Confidentiality, Assignment, and Non-Compete Agreement." (Doc. 19 at 30; Pl. Ex. 3). The non-compete portion of the agreement provides, in pertinent part, as follows:

During the period of the Associate's employment by the Company and for a period of two (2) years thereafter, the Associate shall not... perform any services similar to the services performed by the Associate during his employment with Company, for... any business... that develops, manufactures or sells any products that compete in kind with... any products manufactured, sold or under development by the Company..., in any area of the world in which such products are sold by the Company....

(Pl. Ex. 3 at 4). The agreement provides that it "shall be construed and enforced in accordance with the law of the Commonwealth of Pennsylvania, without regard to conflicts of law principles of Pennsylvania or any other jurisdiction." (Pl. Ex. 3 at 6) (hereinafter "choice of law clause"). Additionally, the agreement selects the forum where any legal proceeding related to agreement must be initiated:

Any legal proceeding arising out of or relating to this Agreement shall be instituted in the United States District Court for the Middle District of Pennsylvania, or if such court does not have or will not accept jurisdiction, in any court of general jurisdiction in York County, Pennsylvania, and the Associate hereby consents to the personal and exclusive jurisdiction of such court and hereby waives any objection that the Associate may have to the laying of venue of any such proceeding and any claim or defense of inconvenient forum.

(Pl. Ex. 3 at 15-16) (hereinafter "forum selection clause"). Believing that the terms were not negotiable, Defendant signed the agreement on January 31, 2012. (Doc. 14-1 at 2).

On August 15, 2014, Defendant terminated her employment with Plaintiff. (Doc. 14-1 at 2). In January 2015, she was hired by Scapa Tapes North America, LLC (Scapa) as a Senior Strategic Sales Executive for the western United States. (Doc. 19 at 55). Scapa is a "manufacturer of bonding products and adhesive components." (Doc. 19 at 35; Pl. Ex. 5 at 1). Primarily, Scapa converts its adhesives into a final product to be used by consumers in the electronic, healthcare, industrial, and automotive markets. (Doc. 19 at 45-47; Def. Ex. 1). By letter dated February 4, 2015, Defendant notified Plaintiff of her employment with Scapa. (Doc. 1 at 6; Pl. Ex. 7).

On February 13, 2015, believing that Defendant's employment with Scapa violates the non-compete agreement, Plaintiff filed a complaint alleging common law claims of breach of contract and unfair competition, as well as a statutory claim under the Pennsylvania Uniform Trade Secrets Act. (Doc. 1). On the same date, Plaintiff filed a Motion for Temporary Restraining Order and/or Preliminary Injunction. (Doc. 2). On February 18, 2015, we issued a temporary restraining order, enjoining Defendant from working for Scapa for a period of ten days. (Doc. 7). On February 26, 2015, we held an evidentiary hearing on the Motion for Preliminary Injunction. At the conclusion of the hearing, we vacated the temporary restraining order, allowing Defendant to return to work, and we instructed the parties to submit ...

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