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Oxford Global Resources, LLC v. Hernandez

Supreme Judicial Court of Massachusetts, Suffolk

September 7, 2018

OXFORD GLOBAL RESOURCES, LLC
v.
JEREMY HERNANDEZ.

          Heard: March 8, 2018.

         Civil action commenced in the Superior Court Department on December 21, 2016. A motion to dismiss was heard by Kenneth W. Salinger, J.

         The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

          David G. Thomas for the plaintiff.

          Barry S. Scheer (Lisa M. Scalisi also present) for the defendant.

          Philip J. Gordon & Benjamin Flam, for Massachusetts Employment Lawyers Association, amicus curiae, submitted a brief.

          Present: Gants, C.J., Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

          GANTS, C.J.

         The defendant was employed in California by the plaintiff company, which is headquartered in Massachusetts. As a condition of employment, he signed a confidentiality, nonsolicitation, and noncompetition agreement (agreement) that declared that the agreement would be governed by the laws of Massachusetts and that all lawsuits arising from the agreement would be brought in a Massachusetts court. After the employee left to work for a competitor in California, and allegedly violated the nonsolicitation and confidentiality provisions of the agreement in performing his new job, his prior employer filed suit against the employee in the Massachusetts Superior Court. The issue on appeal is whether the judge abused his discretion by allowing the employee's motion to dismiss on the ground of forum non conveniens.

         We conclude that the Massachusetts choice of law provision in the agreement is not enforceable, where California substantive law would apply under our choice of law principles, and where the application of Massachusetts substantive law would violate the fundamental public policy of California favoring open competition and employee mobility. We also conclude that the Massachusetts forum selection provision in the agreement does not bar the employee from moving to dismiss on the ground of forum non conveniens. Finally, we conclude that the judge did not abuse his discretion in deciding, after consideration of the relevant private and public concerns, that in the interest of substantial justice this action should be dismissed on the ground of forum non conveniens so that the case can be resolved in a California court.[1]

         Background.

         The plaintiff, Oxford Global Resources, LLC (Oxford), is a recruiting and staffing company that places consultants who have specialized technical expertise with corporate and individual clients. It presently has twenty-four offices throughout the United States and Europe, with three offices in Massachusetts, including its headquarters in Beverly, and four offices in California.[2] Oxford's account managers supervise relationships with Oxford's clients and client managers, and assist Oxford's recruiters and recruiting managers in placing consultants with clients. In its amended complaint, Oxford alleges that it devotes a substantial amount of time and resources in developing the "Oxford Database," a secure database of detailed client information, to which employees have access, with some restrictions.

         The defendant, Jeremy Hernandez, was offered an entry-level position as an account manager with Oxford in its Campbell, California, office in May, 2013, and commenced working for Oxford several months later. Before beginning his employment, Hernandez signed an offer letter in which he agreed to "sign and strictly abide by [Oxford's] Confidentiality, Non-Solicitation and Non-Competition Agreement"; he also signed that agreement.

         Under that agreement, as to confidentiality, Hernandez agreed, among other things, that he would never, "directly or indirectly, use or disclose to anyone . . . any of the Confidential Information revealed to or learned by [him], unless such use or disclosure [was] both consistent with the Company's obligations and for the sole purpose of carrying out [his] duties to the Company." "Confidential Information" is a defined term in the agreement and includes a vast amount of company information, "whether or not meeting the legal definition of a trade secret."[3] As to nonsolicitation, Hernandez agreed that, for twelve months following the termination of his employment, he would not, among other things, solicit or seek to employ or retain the services of any person who was an employee or independent contractor of Oxford within the previous twelve months, or use his knowledge of Oxford's customers and prospective customers to solicit or provide services to those customers or persuade them to reduce their use of services from Oxford.[4] As to noncompetition, the agreement only barred Hernandez from competing with Oxford during his employment with Oxford; it did not prohibit him from working for a competitor after the termination of his employment.

         As to choice of law, the agreement provides that "this Agreement will be governed by the laws of Massachusetts, without giving effect to the conflict of laws provisions thereof." As to forum selection, it provides:

"All suits, proceedings and other actions relating to, arising out of or in connection with this Agreement will be submitted to the in personam jurisdiction of the United States District Court for the District of Massachusetts . . . or to the courts of the Commonwealth of Massachusetts, if the Federal Court lacks jurisdiction to hear the matter or if Oxford so chooses. Venue for all such suits, proceedings and other actions will be in Massachusetts. Employee hereby waives any claims against or objections to such in personam jurisdiction and venue."

         In March, 2016, Hernandez voluntarily terminated his employment with Oxford and, the following month, commenced work as an account manager for MindSource, Inc. (MindSource) -- an Oxford competitor located in Mountain View, California. In November, 2016, Oxford received an anonymous memorandum by mail alleging that Hernandez had "retained proprietary information including call lists, manager names etc. from when he worked at Oxford" and "used th[at] confidential information" at MindSource to solicit clients located in California. The memorandum was accompanied by what appeared to be images of Oxford's "Manager Lead Sheets," which are confidential forms located in the Oxford Database that identify Oxford's client and client manager contacts and prospects, and an image of a message from Hernandez attempting to solicit a former client from Oxford. Oxford alleged that it then came to learn that Hernandez was communicating with a number of Oxford's current and prospective clients and consultants, and sending invitations to others to contact him through a social networking Web site.

         In its amended complaint, filed in January, 2017, Oxford alleged that Hernandez violated the agreement when he "misappropriated and disclosed Oxford's trade secrets and/or confidential information, solicited Oxford's customers and consultants, and improperly competed with Oxford on behalf of himself and [MindSource]." The four counts of its amended complaint claim alleged (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) tortious interference with contractual or advantageous relations between Oxford and Oxford's clients; and (4) statutory and common-law misappropriation of Oxford's trade secrets.

         Hernandez moved to dismiss the amended complaint on the grounds of forum non conveniens, arguing that the agreement's forum selection provision was "inoperative" and that the interest of substantial justice required that the case be tried in California. Oxford opposed the motion, arguing that the parties had entered into an enforceable agreement that provided that the agreement would be governed by the laws of ...


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