Boone v. Corestaff Support Servs., Inc.

• Decision Date: 17 October 2011
• Docket Number: Civil Action No. 1:11–CV–1175–RWS.
• Citation: 805 F.Supp.2d 1362
• Parties: James E. BOONE and Volt Information Sciences, Inc., Plaintiffs, v. CORESTAFF SUPPORT SERVICES, INC. and Impellam Group PLC, Defendants.
• Court: U.S. District Court — Northern District of Georgia

805 F.Supp.2d 1362

James E. BOONE and Volt Information Sciences, Inc., Plaintiffs,

v.CORESTAFF SUPPORT SERVICES, INC. and Impellam Group PLC, Defendants.

Civil Action No. 1:11–CV–1175–RWS.

United States District Court,N.D. Georgia,Atlanta Division.

Aug. 3, 2011.Order Denying Certification Oct. 17, 2011.

Brian Michael Harris, Robert Jason D'Cruz, Morris, Manning & Martin LLP, Gary Daniel Knopf, Rebecca Shanlever, Troutman Sanders, LLP–ATL, Atlanta, GA, for Plaintiffs.

Brett David Zudekoff, Eric Leroy Barnum, Samuel David Almon, Schiff Hardin, LLP, Atlanta, GA, for Defendants.

ORDER

RICHARD W. STORY, District Judge.

This case comes before the Court on Plaintiffs' Motion to Alter or Amend Judgment, or in the Alternative, for Reconsideration [30] and Plaintiffs' Motion for Hearing [33]. After considering the record, the Court enters the following Order.

As an initial matter, the Court does not find a hearing on Plaintiffs' Motion for Reconsideration [30] necessary to resolve the issues presented therein. Plaintiffs' Motion for Hearing [33] is DENIED.

Background

Plaintiffs filed this action on April 22, 2011 seeking a declaration that restrictive covenants contained in a non-compete agreement (“Non–Compete”) [1–2] entered into between James E. Boone and Corestaff Support Services, Inc. ¹ (“Corestaff”) in association with an employment agreement (“Employment Agreement”) [1–1] are unenforceable as a matter of law and seeking injunctive relief preventing Defendants from enforcing the covenants, instituting an action against Plaintiffs arising from Boone's employment with Corestaff, or precluding Boone's employment with Volt Information Sciences, Inc.² (“Volt”). (Dkt. [1] at 27). Both the Non–Compete and Employment Agreement were signed by Boone and Defendants at the offices of Corestaff and Impellam in Atlanta, Georgia. (Dkt. [18] at 1).

Boone began employment with Corestaff, as its President and CEO, in December 2008 by entering into the Employment Agreement. (Complaint, Dkt. [1] at ¶¶ 16, 17, 30). In association with the Employment Agreement, Boone signed the Non–Compete which, among other things, restricts his engagement or participation in the business of staffing services and temporary employment services or any other business in which Corestaff and its affiliates engage in, upon leaving Corestaff. ( Id. at ¶¶ 18–29). As President and CEO of Corestaff, Boone lived and worked in Georgia. ( Id. at ¶ 33).

On April 11, 2011, Boone hand-delivered to Cheryl Jones, Impellam Group PLC's ³ (“Impellam”) Chairman, and Boone's boss, sixty days written notice of his intent to resign his employment with Corestaff. ( Id. at ¶ 34). Jones informed Boone that Defendants “will definitely enforce the [NCA].” ( Id. at ¶ 37). Boone's positions with Volt—including group CEO of ProcureStaff Technologies Ltd., a subsidiary of Volt, and CEO of Volt Consulting Group, a unit of another Volt Subsidiary—will be based in Georgia. ( Id. at ¶ 41). In the course of his employment with Volt, Boone will solicit, or attempt to solicit, current or former Corestaff customers to purchase competing products and services from Volt and solicit the employment of former employees or agents of Corestaff or Impellam and its subsidiaries. ( Id. at ¶ 45, 46). If the restrictive covenants in the Non–Compete are enforceable, Boone's activities on behalf of Volt will violate one or more of these covenants. ( Id. at ¶ 47). Plaintiffs therefore believe that Volt will take legal action to prevent Boone from working for it and have thus filed the present action. ( Id. at ¶ 49).

On May 6, 2011, Corestaff and Impellam, defendants in this action, along with Corporate Employment Resources, Inc.⁴ (“CER”), Guidant Group, Inc. ⁵ (“Guidant”), Corporate Services Groups Holdings, Inc.⁶ (“CSGH”), and The Corporate Services Group, Ltd.⁷ (“CSG”) (collectively the “Delaware Plaintiffs”), filed suit against Plaintiffs in a Delaware court (“Delaware Action”). (Complaint in Delaware Action, Dkt. [7–4] ). CER, Guidant, and Corestaff are all subsidiaries of CSGH (collectively the “U.S. Companies”). ( Id. at ¶¶ 5, 12). CSGH is a wholly owned subsidiary of CSG, which is a wholly owned subsidiary of Impellam. ( Id. at ¶¶ 5, 7). After entering into the Employment Agreement and Non–Compete, Boone was elected by the written consent of CSG to be a director of CSGH and was elected by written consent of CSGH to be a director on the boards of Corestaff, CER, and Guidant. ( Id. at ¶ 18). Boone was also elected by the Boards of Directors of CSGH, Corestaff, and CER to serve as President of these companies and elected by the Board of Directors of Guidant to serve as its Vice President. ( Id.). In practice, he was the head of Impellam's United States operations. ( Id.). The Delaware Plaintiffs filed suit to prevent Boone “from violating his fiduciary duties and contractual obligations owed to [Delaware] Plaintiffs by taking their confidential information and trade secrets and using them in the employ of a direct competitor, Volt.” ( Id. at ¶ 1). The Delaware Action was subsequently removed to the U.S. District Court for the District of Delaware.

Defendants sought to have this action stayed or dismissed in favor of the Delaware Action. Neither the Employment Agreement nor the Non–Compete has a forum selection clause prescribing that suit be brought in Delaware. Both the Employment Agreement and the NCA have choice-of-law provisions stating that Delaware law is to govern both agreements. (Dkt. [1–1] at ¶ 15(a)); (Dkt. [1–2] at ¶ 4(d)).

On June 9, 2011, the Court issued an Order (the “Order”) [28] granting Defendant's Motion to Dismiss [7] and denying as moot Plaintiffs' Motion for Summary Judgment [5], Defendants' Motion to Disqualify [8], and Plaintiffs' Motion to Stay Discovery [26]. Plaintiffs' Motion for Reconsideration asks the Court to revisit its rulings as to the Motion to Dismiss that: (1) a recent shift in Georgia's public policy towards restrictive covenants in employment agreements allowed for the application of Delaware law without violating Georgia's public policy; (2) this action was filed in response to a threat of litigation; and (3) this action does not encompass the entire controversy between the parties. (Dkt. [30] at 2). The Court now examines Plaintiffs' arguments.

Discussion

I. Motion for Reconsideration [30]A. Standard for Reconsideration

Under the Local Rules of this Court, “[m]otions for reconsideration shall not be filed as a matter of routine practice[,]” but rather, only when “absolutely necessary.” LR 7.2(E), NDGa. Such absolute necessity arises where there is “(1) newly discovered evidence; (2) an intervening development or change in controlling law; or (3) a need to correct a clear error of law or fact.” Bryan v. Murphy, 246 F.Supp.2d 1256, 1258–59 (N.D.Ga.2003). However, a motion for reconsideration may not be used “to present the court with arguments already heard and dismissed or to repackage familiar arguments to test whether the court will change its mind.” Id. at 1259. Furthermore, “[a] motion for reconsideration is not an opportunity for the moving party ... to instruct the court on how the court ‘could have done it better’ the first time.” Pres. Endangered Areas of Cobb's History, Inc. v. U.S. Army Corps of Eng'rs, 916 F.Supp. 1557, 1560 (N.D.Ga.1995), aff'd, 87 F.3d 1242 (11th Cir.1996).

B. Georgia's Public Policy

The Court previously stated:

In determining the validity of the Non–Compete this Court would likely apply Delaware law, and this weighs strongly in favor of dismissal. The District Court for the District of Delaware, being more familiar with Delaware law, is better equipped to adjudicate this dispute.

Both the Employment Agreement and the Non–Compete contain Delaware choice-of-law provisions. In Georgia, the law of the jurisdiction chosen by parties to a contract govern their contractual rights unless the application of the other jurisdiction's law violates Georgia's public policy. Convergys Corp. v. Keener, 582 S.E.2d 84, 85 (Ga.2003); Rayle Tech, Inc. v. DeKalb Swine Breeders, Inc., 133 F.3d 1405, 1409 (11th Cir.1998) (citations omitted). Therefore, the threshold question is whether the application of Delaware law in this context violates Georgia's public policy.

(Dkt. [28] at 12). Relying upon the passage of a new restrictive covenant law in Georgia (the “New Act”) as indicative of a shift in Georgia's public policy, the Court found that Delaware law as to restrictive covenants in employment agreements was not violative of Georgia's public policy as reflected by the New Act. ( Id. at 12–15). In reaching this conclusion, the Court overlooked the decision of the Court of Appeals of Georgia in Bunker Hill Int'l, Ltd. v. Nationsbuilder Ins. Servs., Inc., 309 Ga.App. 503, 710 S.E.2d 662 (2011), cited by Plaintiffs in their Response to the Motion to Dismiss. (Dkt. [18] at 17).

Bunker Hill is analogous to the facts of this action. In that case, an employee and his new employer brought an action seeking a declaration that the restrictive covenants the employee entered into with his previous employer are unenforceable under Georgia law. Id. at 664. The employee in that case entered into an employment agreement with his previous employer in April 2006 and June 2008, before the effective date of the New Act. Id. The court's decision, coming after the effective date of the New Act, relied upon Georgia's public policy at the time of the agreement to hold that the non-compete and non-solicitation provisions of the agreements are unenforceable in Georgia. Id. at 666. The court specifically noted that “[b]ecause the agreement at issue was entered into in 2008, we apply the law of restrictive covenants as it existed before the November 2010 ratification of [the New Act].” Id. at 665 n. 1. Furthermore the Court stated that “Georgia courts do not edit or ‘blue-pencil’ employment agreements in order to salvage some provisions when others have been...