NuVasive, Inc. v. Day

          MEMORANDUM AND ORDER

          Denise J. Casper United States District Judge

         I. Introduction

         Plaintiff NuVasive, Inc. (“NuVasive”) has filed this lawsuit against Defendants Timothy Day (“Day”) and Adam Richard (“Richard”)^[1] alleging tortious interference (Day, Count I), breach of contract (Day, Count II; Richard, Count I) and seeking injunctive relief (Day, Count III; Richard, Count II). Day and Richard have each moved to dismiss the complaints filed against them for failure to state a claim. Day, D. 40; Richard, D. 27. For the reasons discussed below, the Court DENIES IN PART Day's motion to dismiss, Day, D. 40, and DENIES IN PART Richard's motion to dismiss, Richard, D. 27, allowing both motions only as to the freestanding claims for injunctive relief, Count III in the Day complaint and Count II in the Richard complaint.

         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 also affiliated with 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

         Both Defendants have two contracts with NuVasive or in which NuVasive has a third-party interest. The first contract, relevant to both Defendants, is the Proprietary Information, Inventions Assignment, Arbitration, and Restrictive Covenants Agreement (the “NuVasive PIIA”) between each Defendant and NuVasive. Day, D. 1-1. 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.

         The second relevant contract for Day is the Sales Representative Agreement between Rival Medical and NuVasive (the “Sales Agreement”). Day, D. 1 at ¶ 17. The Sales Agreement was executed on January 1, 2019 and has a three-year term. Day, D. 1-1 at 14. The Sales Agreement permits Rival to terminate the contract if NuVasive materially breaches its terms. Id. at 25.

         The second relevant contract for Richard is the Proprietary Information, Inventions Assignment, Arbitration, and Restrictive Covenants Agreement between Richard and Rival (the “Rival PIIA”). Richard, D. 1 at ¶¶ 18-19. The Rival PIIA contains a substantially identical non-solicitation clause (Section VI) and non-competition clause (Section VII) as the NuVasive PIIA. Richard, D. 1-2 at 7-9. The Rival PIIA also includes a ...