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EMC Corp. v. Petter

United States District Court, D. Massachusetts

May 13, 2015

EMC CORPORATION, Plaintiff,
v.
JAMES PETTER, Defendant

For EMC Corporation, Plaintiff: Joan A. Lukey, LEAD ATTORNEY, Justin J. Wolosz, Choate, Hall & Stewart LLP, Boston, MA; Jesse B. Siegel, Choate, Hall & Stewart, Boston, MA.

For James Petter, Defendant: Jennifer Pavane Kenter, LEAD ATTORNEY, PRO HAC VICE, Colley LLP, New York, NY; Michael Sheetz, Colley LLP, New York, NY.

ORDER ON DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S AMENDED COMPLAINT OR STAY THE ACTION (Docket No. 11)

TIMOTHY S. HILLMAN, DISTRICT JUDGE.

Plaintiff EMC Corporation (" Plaintiff" or " EMC" ) asserts claims against Defendant James Petter (" Defendant" ) arising out of the alleged scheme of a business competitor, Pure Storage, Inc., (" Pure Storage" ) to collude with former EMC employees to misappropriate confidential EMC information and trade secrets. On January 15, 2015, Defendant announced that he was resigning from his position with EMC Europe Ltd. (" EMC Europe" ), a subsidiary of EMC, to work for Pure Storage. Plaintiff seeks declaratory relief and damages under the EMC Corporation Amended and Restated 2003 Stock Plan (" Stock Plan" ) and Restricted Stock Unit Agreement (" RSU Agreement" ), entered into by the parties during Defendant's employment with EMC Europe.

Specifically, the Amended Complaint (Docket No. 8) asserts claims for declaratory judgment regarding the vesting of Restricted Stock Units (Count One), declaratory judgment regarding detrimental activity and rescission of vested Restricted Stock Units (Count Two), attorney's fees and costs (Count Three), declaratory judgment regarding jurisdiction (Count Four), breach of contract (Count Five), and breach of the covenant of good faith and fair dealing (Count Six). Defendant has moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(6). (Docket No. 11). Defendant alternatively requests that this case be dismissed under the doctrine of forum non conveniens, or stayed pending the outcome of parallel litigation in the United Kingdom. For the following reasons, Defendant's motion is denied. Summary judgment on Count Four is granted.

Background and Jurisdictional Facts

Plaintiff EMC is a Massachusetts corporation with its principal place of business in Massachusetts, and offices and facilities throughout the District of Massachusetts. Defendant resides in Surrey, England, and worked in London during his employment with EMC Europe. See Petter Decl., Docket No. 13, ¶ 8. At the time of his resignation from EMC Europe, he was Senior Vice President and Managing Director for the United Kingdom and Ireland. Id. at ¶ 5. As part of Defendant's compensation, EMC periodically awarded him shares of EMC stock, or " Restricted Stock Units" (RSUs). To receive RSUs, Defendant was required to agree to the terms of the RSU Agreement, which he would electronically accept from his office in London. Id. at ¶ 16-18. On multiple occasions Defendant also signed hard copies of the RSU Agreement and mailed them to EMC's stock administration director in Hopkinton, Massachusetts. See Grace Decl., Docket No. 21, ¶ 8. The RSU Agreement expressly incorporates the terms of the Stock Plan, stating that an award " is made pursuant to and is subject to the provisions of this Restricted Stock Unit Agreement and the Company's Amended and Restated 2003 Stock Plan." RSU Agreement, Grace Decl., Docket No. 21, Ex. C. The Stock Plan, in turn, includes the following forum selection and choice-of-law clause:

13. Jurisdiction and Governing Law.
The parties submit to the exclusive jurisdiction and venue of the federal or state courts of The Commonwealth of Massachusetts to resolve issues that may arise out of or relate to the Plan or the same subject matter. The Plan shall be governed by the laws of The Commonwealth of Massachusetts, excluding its conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction.

Stock Plan, Docket No. 8, Ex. A, ¶ 13. The Stock Plan also includes a provision allowing EMC to cancel or rescind RSU awards where senior employees engage in " detrimental activity" as defined in the plan. Id. at ¶ 6.7. It is this provision that EMC relies upon in seeking to void Defendant's RSV awards.

Beginning in 2009, Defendant traveled annually to Massachusetts once per year for an EMC Leadership Summit. See Petter Decl., Docket No. 13, ¶ 14. On January 10, 2015, Defendant traveled to Boston for the 2015 Leadership Summit. Id. at ¶ 20. At the time of the 2015 summit, Defendant had received an informal offer of employment from Pure Storage. Id. at ¶ 22. Defendant accepted the offer on January 12, 2015, once he had returned to the United Kingdom. Id. EMC alleges that the Leadership Summit was a confidential conference and that Defendant's attendance, after having received an offer from Pure Storage, was " detrimental activity" under the Stock Plan. See Pl.'s Am. Compl., Docket No. 8, ¶ 62-63. Due to this and other conduct, EMC rescinded 8,721 vested RSUs that had been awarded to Defendant.

EMC filed this action on February 27, 2015. Two weeks later, Defendant filed suit against EMC and EMC Europe in the High Court of Justice, Queen's Bench Division, in London, England (" the U.K. action" ). Defendant's U.K. action seeks declarations that certain provisions of the Stock Plan are unenforceable, that he has not engaged in detrimental activity under the Stock Plan, and that EMC's rescission of the RSU awards was void.

Analysis

Defendant's motion to dismiss asserts that the Stock Plan's forum selection clause is unenforceable and that Defendant lacks sufficient contacts with Massachusetts for this Court to exercise personal jurisdiction. Defendant alternatively argues that this Court should dismiss this case in favor of the U.K. action under the doctrine of forum non ...


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