Clinical Staffing, Inc. v. Worldwide Travel Staffing Ltd.

• Decision Date: 21 October 2013
• Docket Number: No. 5:12–CV–647–D.,5:12–CV–647–D.
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: CLINICAL STAFFING, INC., d/b/a Dzeel Clinical, Plaintiff, v. WORLDWIDE TRAVEL STAFFING LIMITED, Defendant.

60 F.Supp.3d 618

CLINICAL STAFFING, INC., d/b/a Dzeel Clinical, Plaintiff

v.WORLDWIDE TRAVEL STAFFING LIMITED, Defendant.

No. 5:12–CV–647–D.

United States District Court, E.D. North Carolina, Western Division.

Oct. 21, 2013.

Julia Y. Kirkpatrick, Burns, Day & Presnell, P.A., Raleigh, NC, for Plaintiff.

Gale Ellen Carroll, Dinsmore & Shohl LLP, Morgantown, WV, Ryan W. Green, Dinsmore & Shohl LLP, Cincinnati, OH, for Defendant.

ORDER

JAMES C. DEVER III, Chief Judge.

On September 10, 2012, Clinical Staffing, Inc. d/b/a Dzeel Clinical (“Dzeel”) sued its competitor Worldwide Travel Staffing, Limited (“Worldwide Travel Staffing”) in Wake County Superior Court alleging tortious interference with contract and a violation of the North Carolina Unfair and Deceptive Trade Practices Act [D.E. 1–2]. Worldwide Travel Staffing timely removed the action to this court, and the court has jurisdiction based on diversity jurisdiction [D.E. 1]. Essentially, Dzeel contends that after Worldwide Travel Staffing won a contract with the North Carolina Department of Health and Human Services (“NCDHHS”) to provide nursing services, Worldwide Travel Staffing tortiously interfered with contracts that Dzeel had with numerous nurses that Dzeel had hired and placed in various NCDHHS facilities. In support of its two claims against Worldwide Travel Staffing, Dzeel relies on a non-competition provision in the nurses' contracts. Because the non-competition provision in each Dzeel contract is unenforceable under North Carolina law, the court grants Worldwide Travel Staffing's motion for summary judgment.

I.

Dzeel and Worldwide Travel Staffing are staffing companies that compete in filling long-term and short-term nursing positions. In July 2012, the NCDHHS awarded a non-exclusive three-year staffing contract to Worldwide Travel Staffing to provide temporary nursing services for the North Carolina Division of State Operated Healthcare Facilities. After Worldwide Travel Staffing won the contract, a number of nurses who worked for Dzeel resigned and began accepting positions with Worldwide Travel Staffing. In turn, Worldwide Travel Staffing placed a number of these nurses in the same NCDHHS facilities where the nurses had worked as Dzeel employees.

Dzeel's complaint relies on a non-competition provision in each Dzeel employee's contract The non-competition provision states:

I understand that I have come to Dzeel Clinical seeking per diem, contract, or permanent placement, and I will be submitted to one or all of the company's clients. I agree that for a period of six months immediately after the termination of my employment with Dzeel Clinical, I will not directly or indirectly, make known to any person, firm, or corporation the terms of my employment. I will not provide service to any Dzeel client or individual who has received services under the direction of Dzeel Clinical, for a period of (6) six months from my termination date.

This also applies to all written material and information pertinent to the business and distributed to any person/organization unrelated to Dzeel Clinical. Such material and information includes but is not limited to client lists, promotional material, operating policy and procedure manuals, personnel files, forms, etc. as these materials are considered proprietary.

I further understand and agree that after Dzeel Clinical has submitted my profile to a potential employer, on my behalf, and at my request, I will not permit or pursue a duplicate submission from any other agency for a period of (6) six months. I give Dzeel Clinical permission to instruct said client(s) to destroy duplicate submissions. I further understand and agree that I will not be eligible for employment at said facility through Dzeel or any other agency, if I violate this agreement.

[D.E. 22–1] (emphasis added). Dzeel asserts two claims against Worldwide Travel Staffing. First, Dzeel alleges tortious interference with contractual relations. [D.E. 1–2], Compl. ¶¶ 26–31. Second, Dzeel alleges a violation of North Carolina's Unfair and Deceptive Trade Practices Act (“UDTPA”). Id. ¶¶ 32–43. Both claims stem from Worldwide Travel Staffing's decision to recruit and hire former Dzeel nurses, to tell the former Dzeel nurses that the non-competition provision in each nurse's contract with Dzeel was not enforceable, and to place many of the former Dzeel nurses at the same NCDHHS facility where they had previously worked for Dzeel. According to Dzeel, Worldwide Travel Staffing engaged in this conduct to avoid costs associated with recruiting, training, and orienting nurses. See id. ¶¶ 26–43.

On May 24, 2013, Worldwide Travel Staffing filed a motion for summary judgment [D.E. 20] and a supporting memorandum [D.E. 20–1]. On June 14, 2013, Dzeel responded in opposition [D.E. 25], including three affidavits and various exhibits [D.E. 22–24]. On June 27, 2013, Worldwide Travel Staffing replied [D.E. 26].

In considering a motion for summary judgment, the court views the evidence in the light most favorable to the nonmoving party (i.e., Dzeel) and applies well-established principles under Federal Rule of Civil Procedure 56. See, e.g., Fed.R.Civ.P. 56 ; Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) ; Celotex Corp. v. Catrett, 477 U.S. 317, 325–26, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a) ; see Anderson, 477 U.S. at 247–48, 106 S.Ct. 2505. The party seeking summary judgment must initially come forward and demonstrate an absence of a genuine issue of material fact See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. Once the moving party has met its burden, the nonmoving party then must affirmatively demonstrate that there exists a genuine issue of material fact for trial. See Matsushita, 475 U.S. at 586–87, 106 S.Ct. 1348. “[T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505. It is insufficient to show a “mere ... scintilla of evidence in support of the [nonmoving party's] position ...; there must be evidence on which the [fact finder] could reasonably find for the [nonmoving party].” Id. at 252, 106 S.Ct. 2505.

The court is exercising diversity jurisdiction, and the parties agree that North Carolina substantive law applies. In applying North Carolina substantive law, the court “must determine how the Supreme Court of [North] Carolina would rule. If the Supreme Court of [North] Carolina has spoken neither directly nor indirectly on the particular issue before us, [this court is] called upon to predict how that court would rule if presented with the issue. In making that prediction, [this court] may consider lower court opinions in [North] Carolina, the teachings of treatises, and the practices of other states.” Twin City Fire Ins. Co. v. Ben Arnold–Sunbelt Bev. Co., 433 F.3d 365, 369 (4th Cir.2005) (citations and quotations omitted).

Worldwide Travel Staffing argues that the non-competition provision “is so poorly constructed as not to even constitute a noncompete for which analysis under noncompete legal principles is even possible.” [D.E. 20–1] 3. Alternatively, Worldwide Travel Staffing argues that if the non-competition provision contains competition restrictions that can be identified with any reasonable specificity, such restrictions are not connected either at all, or in any reasonable way, to time, geography, or customers. Thus, according to Worldwide Travel Staffing, the non-competition provision is unenforceable, and Dzeel's two claims fail. Id.

Dzeel responds in two ways. First, Dzeel contends that Worldwide Travel Staffing's motion for summary judgment is premature because discovery is not yet complete. [D.E. 25] 5. Oddly, however, Dzeel did not move pursuant to Rule 56(d)(2) of the Federal Rules of Civil Procedure and specifically explain why it needed more time to oppose Worldwide Travel Staffing's motion for summary judgment.¹ Generally, “summary judgment is appropriate only after adequate time for discovery.” Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 961 (4th Cir.1996) (quotation omitted). Moreover, Rule 56(d) provides:

If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.

Fed.R.Civ.P. 56(d). Accordingly, Rule 56(d) permits a court to delay ruling on a motion for summary judgment if the nonmoving party shows by affidavit or declaration specific discovery that the nonmoving party needs to oppose summary judgment Id.; Crawford–El v. Britton, 523 U.S. 574, 599 n. 20, 118 S.Ct. 1584, 140 L.Ed.2d 759 (1998) ; Nader v. Blair, 549 F.3d 953, 961–62 (4th Cir.2008) ; White v. BFI Waste Servs., LLC, 375 F.3d 288, 295 n. 2 (4th Cir.2004).

A party requesting relief pursuant to Rule 56(d) must specifically demonstrate that the party has not had sufficient time to obtain and present information it needs to oppose the summary judgment motion. Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th Cir.2002). In considering a party's request for relief under Rule 56(d), a court may consider the diligence that the nonmoving party has demonstrated in pursuing discovery. See White, 375 F.3d at 295 n. 2 ; Harrods Ltd., 302 F.3d at 245 ; Strag v. Bd. of Trs., 55 F.3d 943, 953–54 (4th Cir.1995). A court also may consider whether the case “involves complex factual questions...