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NuVasive, Inc. v. Day

United States District Court, D. Massachusetts

May 29, 2019

NUVASIVE, INC., Plaintiff,
v.
TIMOTHY DAY, Defendant. NUVASIVE, INC., Plaintiff,
v.
ADAM RICHARD, Defendant.

          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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