CraneTech, Inc. v. Slack

• Court: U.S. District Court — Northern District of Indiana
• Writing for the Court: GRETCHEN S. LUND, Judge
• Citation: CraneTech, Inc. v. Slack, 789 F.Supp.3d 662 (N.D. Ind. 2025)
• Docket Number: Case No. 3:24-CV-693-GSL-SJF
• Decision Date: 25 June 2025
• Parties: CRANETECH, INC., Plaintiff, v. Richard SLACK, et al., Defendants.

789 F.Supp.3d 662

CRANETECH, INC., Plaintiff, v. Richard SLACK, et al., Defendants.

Case No. 3:24-CV-693-GSL-SJF

United States District Court, N.D. Indiana, South Bend Division

Signed June 25, 2025

Jacob D. Radecki PHV, Pro Hac Vice, Patrick O'Meara PHV, Pro Hac Vice, McDonald Hopkins LLC, Chicago, IL, Jared D. Brown, McDonald Hopkins PLC, Bloomfield Hills, MI, for Plaintiff.

Anna Mandula, Lewis Brisbois Bisgaard & Smith LLP, Highland, IN, Matthew S. Holleb PHV, Pro Hac Vice, Paul J. Cherner, Klein Paull Holleb & Jacobs Ltd, Highland Park, IL, for Defendants.

ORDER

GRETCHEN S. LUND, Judge

Before the Court are two motions: Plaintiff CraneTech's Motion for Temporary Restraining Order and Preliminary Injunction, [DE 2], and Defendants' Motion to Dismiss, [DE 26]. Having reviewed the briefing on both the Motion to Dismiss, and the Motion for Preliminary Injunction, and having considered testimony from the hearing, the Court finds as follows.

BACKGROUND

Plaintiff CraneTech is a crane-servicing company. In 2022, Plaintiff CraneTech approached Defendants, Richard and Lisa Slack, with a proposal to purchase their crane-servicing business, R.L.W.P Service, LLC ("RLWP"), located in Valparaiso, Indiana. [DE 1, at 3]. Plaintiff CraneTech provided similar services as RLWP, and the "acquisition of RLWP offered CraneTech an important opportunity to establish itself in northern Indiana . . ." [Id. at 4]. Plaintiff CraneTech identified RLWP based on "its footprint in the greater Valparaiso, Indiana area and the customer base its principals, the Slacks, had built." [Id.]

On November 10, 2022, Plaintiff CraneTech entered into the Asset Purchase Agreement ("APA") to purchase RLWP's assets from Defendants. [Id.] To protect the customer and employee relationships that Plaintiff CraneTech was acquiring, the APA included restrictive covenants prohibiting certain activity by Defendants. [Id. at 5]. The APA Restrictive Covenants ran for two years from the APA's closing date, from November 10, 2022 through November 10, 2024. [Id. at 6].

In addition to purchasing RLWP from Defendants, because the crane servicing industry is highly interpersonal, Plaintiff CraneTech also wanted to bring on Defendants as employees. [Id. at 4]. Defendants executed their employment agreements, which also contained restrictive covenants, on November 10, 2022. [Id. at 6]. Defendant Lisa Slack joined Plaintiff CraneTech as the Branch Administration Manager; Defendant Richard Slack joined CraneTech as a Branch Manager, and was later promoted to District Manager. [Id. at 6; 8]. Over the next year and a half, the employment relationship with Defendant Richard Slack soured, and both Defendants were terminated on May 10, 2024. [Id. at 10]. This lawsuit ensued.

Plaintiff CraneTech filed a Motion for a Temporary Restraining Order and Preliminary Injunction, at [DE 2], and alleged that Defendant Richard Slack violated the restrictive covenants contained in the APA and Employment Agreements by starting a competing crane-servicing business, and attempting to and succeeding in poaching Plaintiff CraneTech's employees and customers. [DE 3, Page 5]. After reviewing the Motion, the Court granted the Temporary Restraining Order at [DE 6], and set the Preliminary Injunction for hearing.

In the early hours before the Preliminary Injunction hearing occurred, Defendants filed a Motion to Dismiss for want of jurisdiction. [DE 26]. The Court did not entertain argument on the substantive aspects of the Motion at the hearing, and instead, the Motion to Dismiss was fully briefed on paper with Plaintiff CraneTech responding at [DE 34], and Defendants replying at [DE 36].

At the Preliminary Injunction hearing, there was very little substantive discussion of the elements required for a preliminary injunction to issue and how those elements are satisfied in this case.¹ There was even less, if any at all, discussion of the enforceability of the restrictive covenants in either contract, which the Court finds interesting, because the enforceability of the restrictive covenants is a threshold issue and part of the analysis of whether there is a likelihood of success on the merits. See Advent Elecs. v. Buckman, 1995 U.S. Dist. LEXIS 11696, at *12-13 (N.D. Ill. Aug. 11, 1995); Custom Truck One Source, Inc. v. Norris, 2022 WL 594142, *6, 2022 U.S. Dist. LEXIS 34291, *17-18 (N.D. Ind. Feb. 28, 2022). Instead, the full-day hearing was focused almost exclusively on the conduct of Defendant Richard Slack after his employment with Plaintiff CraneTech ended.

At the conclusion of the hearing, the parties agreed that the TRO would be extended through and including the date of the Court's ruling, and the Court permitted limited briefing on the merits of the Motion for Preliminary Injunction. [DE 33, Page 280]. Plaintiff CraneTech filed their Brief in Support at [DE 35]. Defendants responded at [DE 38], with Plaintiff CraneTech replying at [DE 43].

As an initial starting point, the Court notes that even after this additional opportunity for briefing, there remain issues which the parties fail to address. First, the Asset Purchase Agreement and the Employment Agreement, signed on the same day, by the same parties, during the same transaction, contain conflicting choice of law and forum selection provisions. [DE 1-1, Pages 29, 59]. This is problematic, because employment law varies from state to state and greatly impacts the enforceability of restrictive covenants. Despite there being conflicting choice of law and forum selection provisions, the parties did not take particular care to provide this Court with appropriate, relevant caselaw. For this reason, the Court spent an inordinate amount of time both identifying the controlling law, and applying it to the facts of this case. See DeSilva v. DiLeonardi, 181 F.3d 865, 867 (7th Cir. 1999) ("A brief must make all arguments accessible to the judges, rather than ask them to play archaeologist with the record."). Having reviewed the briefing on both the Motion to Dismiss, and the Motion for Preliminary Injunction, and having considered testimony from the hearing, the Court's analysis is below.

Defendants' Motion to Dismiss: [DE 26]

Defendants argue that because the forum selection clause requires actions arising under the APA to be brought exclusively in the state or federal courts of Illinois that this Court lacks subject matter jurisdiction and must dismiss the APA-related count. [DE 27]. This Court disagrees.

The appropriate way to enforce a forum-selection clause which requires suit in a specific federal forum, like here, is through a motion to transfer under 28 U.S.C. § 1404(a), not a motion to dismiss under Rule 12(b)(1). Mueller v. Apple Leisure Corp., 880 F.3d 890, 894 (7th Cir. 2018) (quoting Atl. Marine Constr. Co. v. United States Dist. Court, 571 U.S. 49, 134 S. Ct. 568, 579, 187 L.Ed.2d 487 (2013)). In a similar case in this division, H.E.D., Inc. v. Konica Minolta, the court denied a Rule 12(b)(1) motion to dismiss based on a forum-selection clause for failure to "address[ ] the questions pertinent to" transfer under § 1404(a). 2016 WL 5369589, at *2, 2016 U.S. Dist. LEXIS 130987, at *4-5 (N.D. Ind. Sept. 26, 2016). It would appear, based on H.E.D., Inc., that Defendants' choice to move under Rule 12(b)(1) instead of through a motion to transfer under 28 U.S.C. § 1404(a) is sufficient grounds to deny their motion, because they failed to provide the Court with the necessary information to "address[ ] the questions pertinent to" transfer under § 1404(a).² Id.

Notwithstanding, a forum selection clause does not divest a court of jurisdiction over a party where it otherwise exists. While personal jurisdiction is a right that a litigant may waive or forfeit through a forum selection clause, litigants cannot confer subject-matter jurisdiction by agreement or omission. BouMatic, LLC v. Idento Operations, BV, 759 F.3d 790, 793 (7th Cir. 2014). Because forum selection clauses allow parties to stipulate to personal jurisdiction only, the Asset Purchase Agreement's forum selection clause has no bearing on this Court's subject-matter jurisdiction. Defendants' Motion to Dismiss is DENIED.

Plaintiff CraneTech's Motion for Preliminary Injunction: [DE 2]

"A preliminary injunction is an extraordinary remedy never awarded as of right." Zimmer US, Inc. v. Miller, 2023 WL 3839516, at *2, 2023 U.S. Dist. LEXIS 98152, at *5 (N.D. Ind. June 6, 2023) (quoting Winter v. NRDC, Inc., 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) (internal citations omitted)). To obtain a preliminary injunction, a plaintiff must make four showings: (1) without this relief it will suffer irreparable harm; (2) traditional legal remedies would be inadequate; (3) it has some likelihood of prevailing on the merits of its claims; and (4) that the balance of harms weighs in favor of granting the injunction. Speech First, Inc. v. Killeen, 968 F.3d 628, 637 (7th Cir. 2020) (quoting Courthouse News Serv. v. Brown, 908 F.3d 1063, 1068 (7th Cir. 2018)). If the plaintiff is likely to prevail on the merits, the balance of harms need not weigh as heavily in her favor. Speech First, 968 F.3d at 637 (quoting Courthouse News, 908 F.3d at 1068). If the plaintiff cannot establish both a likelihood of success on the merits and that he will suffer irreparable harm absent the injunction, "then the district court's analysis ends and the preliminary injunction should not be issued." Adams v. City of Chicago, 135 F.3d 1150, 1154 (7th Cir. 1998) (citing Abbott Lab'ys v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992)).

Before reaching the elements, the Court must address the Asset Purchase Agreement and the Employment Agreement, which were executed on the same day, by the same parties, during the same transaction, and contain extremely similar restrictive covenants. [DE 1-1, Pages 29, 59]. The Asset Purchase Agreement, and restrictive covenants contained within, went into effect on the day it was signed and...