United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
DENISE
J. CASPER, UNITED STATES DISTRICT JUDGE
I.
Introduction
Plaintiff
NuVasive, Inc. (“NuVasive”) seeks preliminary
injunctive relief against Defendants Timothy Day
(“Day”) and Adam Richard
(“Richard”)[1] to enjoin Day and Richard from
allegedly violating their non-competition and
non-solicitation obligations. Day, D. 8; Richard, D. 4.
For the
reasons discussed below, the Court ALLOWS IN PART and DENIES
IN PART the motion for preliminary injunction against Day,
Day, D. 8, and DENIES the motion for preliminary injunction
against Richard, Richard, D. 4.
II.
Factual Allegations
A.
NuVasive and Rival Employment
NuVasive
is a manufacturer of products used to treat spinal disease.
Day, D. 1 at ¶ 2. NuVasive is incorporated in Delaware
and maintains its principal place of business in San Diego,
California. Id.
Day
worked as a sales representative for an exclusive distributor
of NuVasive's products and then as a sales director for
NuVasive from August 2011 to April 2019. Id. at
¶ 4. Day's territory as a sales representative was
six Boston-area hospitals and then expanded to Massachusetts
and Rhode Island when he became a sales director.
Id.
Richard
also began as a sales associate for an exclusive distributor
of NuVasive's products, with a territory of fifteen
Massachusetts hospitals. Richard, D. 1 at ¶ 13. In
January 2018, Richard became a sales representative for
NuVasive. Id. at ¶ 14. In January 2019, Richard
became a sales representative for Rival Medical, LLC
(“Rival”), Richard, D. 1 at ¶ 17, which at
the same time became the exclusive distributor for
NuVasive's products in Massachusetts and Rhode Island.
Day, D. 1 at ¶ 4.
Day was
the principal of Rival. Day, D. 1 at ¶ 4. On March 30,
2019 and April 1, 2019, Day sent emails to NuVasive's
President, U.S. Commercial, Paul McClintock stating that
Rival was dissolving and that April 1, 2019 would be
Day's last day. Id. at ¶¶ 21-22.
Richard terminated his relationship with NuVasive soon after
Day resigned from Rival. Richard, D. 1 at ¶ 28.
Both
Day and Richard currently are affiliated with Alphatec Spine,
Inc. (“Alphatec”), which NuVasive identifies as a
competitor in the spinal products market. Id. at
¶ 25.
B.
Relevant Agreements
While
both Defendants have multiple contracts that NuVasive might
seek to enforce, NuVasive relies upon the NuVasive PIIA as to
Day, Day, D. 8 at 1, and upon the Rival PIIA as to Richard,
Richard, D. 4 at 1, for the injunctive relief it seeks here.
Accordingly, the Court turns to the relevant portions of both
agreements.
As to
Day, NuVasive relies upon the Proprietary Information,
Inventions Assignment, Arbitration, and Restrictive Covenants
Agreement (the “NuVasive PIIA”). D. 1-1. Although
NuVasive alleges that each Defendant executed this agreement
as a condition of their employment, Day, D. 1 at ¶ 14;
Richard, D. 1 at ¶ 15, NuVasive has only produced the
NuVasive PIIA as executed by Day. D. 1 at 12-13 (signed by
Day on January 6, 2018). The NuVasive PIIA includes both a
non-solicitation clause (Section VI) and a non-competition
clause (Section VII). Day, D. 1-1 at 6-9. Both clauses
include provisions extending the terms of the clauses for one
year following the termination of Defendants' engagement
with NuVasive, “regardless of the reason for the
termination.” Id. The non-solicitation clause
provides that the employee agrees not to “solicit,
entice, persuade, induce, call upon or provide services to
any of the Customers (as defined in Section VII), accounts or
clients that I worked with, had responsibility or oversight
of, provided services related to, or learned significant
information about during my employment (or other association)
with the Company for any purpose other than for the benefit
of the Company” or to “induce or influence, or
seek to induce or influence, any person who is employed or
engaged by the Company . . . with the purpose of obtaining
such person as an employee . . . for a business competitive
with the Company.” Id. at 7. The
non-competition clause forbids the employee from any
affiliation with a “Conflicting Organization, ”
which is defined as “any person, group of persons, or
organization that is engaged in, or about to be engaged in,
research on, consulting regarding, or development,
production, marketing or selling of any product, process,
invention or service, which resembles, competes with, or
replaces a product, process, machine, invention or service
upon which I shall have worked or about which I became
knowledgeable as a result of my relationship with the
Company, and whose use or marketability could be enhanced by
the application of Proprietary Information to which I shall
have had access during such relationship.” Id.
For employees with certain titles, including Sales Director,
Sales Associate and “any substantially similar
position[s], ” the “post-employment
restrictions” are limited to Customers “for which
I . . . was assigned responsibility for by the Company,
participated in sales calls and/or marketing efforts on
behalf of the Company, and/or covered medical procedures on
behalf of Company, during the last twelve months of my
employment with Company . . . .” Id. at 8.
As to
Richard, NuVasive relies upon the Proprietary Information,
Inventions Assignment, Arbitration, and Restrictive Covenants
Agreement between Richard and Rival (the “Rival
PIIA”). The Rival PIIA contains a substantially
identical non-solicitation clause (Section VI) and
noncompetition clause (Section VII) as the NuVasive PIIA.
Richard, D. 1-2 at 7-9. The Rival PIIA also includes a
third-party beneficiary clause that identifies NuVasive as an
intended third-party beneficiary of the agreement.
Id. at 9.
III.
Standard of Review
To
obtain a preliminary injunction, a plaintiff must show:
“(1) a substantial likelihood of success on the merits;
(2) a significant risk of irreparable harm if the injunction
is withheld; (3) a favorable balance of hardships, and (4) a
fit (or lack of friction) between the injunction and the
public interest.” Nieves-Marquez v. Puerto
Rico, 353 F.3d 108, 120 (1st Cir. 2003) (citation
omitted). The Court may accept as true “well-pleaded
allegations [in the complaint] and uncontroverted affidavits,
” Rohm & Haas Elec. Materials, LLC v. Elec.
Circuits, 759 F.Supp.2d 110, 114, n.2 (D. Mass. 2010)
(quoting Elrod v. Burns, 427 U.S. 347, 350, n.1
(1976)), but when “courts are faced with affidavits at
odds and must make a credibility determination between them,
courts generally do not issue a preliminary injunction, but
rather leave the issue for a jury to resolve.” Rohm
& Haas, 759 F.Supp.2d at 125, n.107; see Spencer
Cos., Inc. v. Armonk Indus., Inc., 489 F.2d 704, 707
(1st Cir. 1973) (affirming trial court's denial of a
preliminary injunction when a “major factual
dispute” existed regarding the materiality of any
misrepresentations and finding that the district court
“was within its discretion to conclude that there was
uncertainty whether [the plaintiff] would ever prevail on the
merits”). Further, injunctive relief is an
“extraordinary and drastic remedy.” Voice of
the Arab World v. MDTV Med. News Now, Inc., 645 F.3d 26,
32 (1st Cir. 2011) (citation and quotations omitted); see
Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22
(2008).
IV.
Procedural History
On
April 22, 2019, NuVasive filed its complaint against Day
asserting claims for tortious interference, breach of
contract and injunctive relief. Day, D. 1 at 7-8. Four days
later, on April 26, 2019, NuVasive filed its complaint
against Richard asserting claims for breach of contract and
injunctive relief. Richard, D. 1 at 7-8. On April 23, 2019,
NuVasive moved for a preliminary injunction against Day, Day,
D. 8, and followed three days later, April 26, 2019, with a
motion for a preliminary injunction against Richard, Richard,
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