Ethicon, Inc. v. Randall
| Decision Date | 28 May 2021 |
| Docket Number | Case No. 3:20-cv-13524 (BRM) (ZNQ) |
| Parties | ETHICON, INC. and MEDICAL DEVICE BUSINESS SPORTS, INC., Plaintiffs, v. BRANDON RANDALL, Defendant. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
Before this Court is Defendant Brandon Randall's ("Randall") Motion to Stay All Proceedings and Transfer Venue to the United States District Court for the District Court of Massachusetts. (ECF No. 23.) Plaintiffs Ethicon, Inc. ("Ethicon") and Medical Device Business Services, Inc. ("DePuy Synthes") (together with Ethicon, "Plaintiffs") opposed Randall's Motion and filed a Cross Motion to Enjoin Proceedings in the District of Massachusetts. (ECF No. 41.) Also before the Court is Plaintiffs' Motion for Preliminary Injunction. (ECF No. 2.) Randall opposed Plaintiffs' Motion for Preliminary Injunction. (ECF No. 29.) Plaintiffs filed a Reply in support of their Motion for Preliminary Injunction. (ECF No. 35.) Randall filed a Sur-Reply in opposition to Plaintiffs' Motion for Preliminary Injunction. (ECF No. 42.) Randall also filed a Reply in support of his Motion to Stay All Proceedings and Transfer Venue, and in opposition to Plaintiffs' Cross Motion to Enjoin Proceedings. (ECF No. 44.) Having reviewed the parties' submissions filed in connection with the motions and having declined to hold oral argument pursuant to Federal Rule of Civil Procedure 78(b), for the reasons set forth below and for good cause having been shown, Randall's Motion to Stay All Proceedings and Transfer Venue to Massachusetts is DENIED, and Plaintiffs' Cross Motion to Enjoin Proceedings in the District of Massachusetts and Motion for Preliminary Injunction are GRANTED.
Ethicon and DePuy Synthes are two entities within the J&J Family of Companies (individually and/or collectively, the "Company"), which is comprised of over 260 companies and together operates one of the world's largest and most diverse medical device, pharmaceutical and consumer products companies. (ECF No. 1 ¶ 11.) Ethicon and DePuy Synthes are two key businesses within J&J's Medical Devices Business ("JJMDB") and, as wholly owned subsidiaries of J&J, are part of the Company. (Id. ¶ 12.) Ethicon is a New Jersey corporation, and primarily focuses on developing and creating innovative products and medical devices for use in surgery. (Id. ¶¶ 6, 14.) DePuy Synthes is an Indiana corporation, and focuses on implants and instrumentation for use in orthopedic surgery for the repair and healing of the musculoskeletal system. (Id. ¶¶ 7, 13.)
Randall is a Massachusetts resident. (Id. ¶ 8.) In September 2003, Randall joined Synthes, Inc. (ECF No. 29 at 6.) In 2012, DePuy acquired Synthes, Inc. to become DePuy Synthes, where Randall worked in various roles for the next seven years. (Id.) In June 2017, Randall accepted a position as the Senior Director, Research and Development Strategy and Business Operations for orthopedics with DePuy Synthes. (Id. at 7.) In connection with the Senior Director position, Randall executed an Employee Secrecy, Intellectual Property, Non-Competition and Non-Solicitation Agreement (the "Agreement"). (Id.)
The Agreement contains a forum selection and choice of law clause, which provides:
This AGREEMENT will be governed by and interpreted according to the laws of the State of New Jersey, without regard to its conflict of law rules. Any action relating to or arising out of this AGREEMENT may be brought in the courts of the State of New Jersey or in the United States District Court for the District of New Jersey. You consent to personal jurisdiction and venue in both such courts.
(ECF No. 1, Ex. A ¶ 6.1.) The Agreement defines "COMPETITOR" as:
any person or entity including, but not limited to, you or anyone acting on your behalf, that is engaged or preparing to be engaged in research, development, production, manufacturing, marketing or selling of, or consulting on, any product, process, technology, machine, invention, or service in existence or under development that resembles, competes with, may now or in the future compete with, can by substituted for or can be marketed as a substitute for any product, process, technology, machine, invention or service of any COMPANY that is in existence or that is, was, or is planned to be under development.
(Id., Ex. A ¶ 3.6.) The Agreement defines "CONFIDENTIAL INFORMATION" as:
product development, product performance, product know-how, product specifications, techniques, drawings, prints, designs, and tolerances; regulatory strategies, clinical trials and investigations; manufacturing, engineering, logistics, and quality systems and related processes, data and techniques; information systems, computer programs, software, and hardware configurations; business, financial, operating, sales and marketing plans and strategies; inventions, ideas, discoveries, improvements, innovations and intellectual property strategies; pricing and pricing strategies, forecasts, contract and bidding details, financial data, models and analyses, sales volume, sales data and analyses; customer, business partner and vendor relationships and arrangements; personnel data and compensation; human resources strategies and goals, recruitment methods and plans; and training methods and procedures.
(Id., Ex. A ¶ 2.1.) A non-compete provision in the Agreement states:
Except as provided in Section 3.3 below, you agree that, for a period of eighteen (18) months after the termination of your employment within the COMPANY (whether voluntary or involuntary), you will not directly or indirectly perform, or assist others to perform, work for a COMPETITOR in a position or in any geographical locationin which you could disadvantage the COMPANY or advantage the COMPETITOR through (a) your disclosure or use of CONFIDENTIAL INFORMATION and/or (b) your use of the COMPANY's CUSTOMER relationships and goodwill.
(Id., Ex. A ¶ 3.2.) Section 3.3, which provides an exception to Section 3.2, sets forth the preconditions Randall must satisfy before working for a competitor of Plaintiffs:
After the termination of your employment within the COMPANY, you may work for a COMPETITOR provided that (a) the competitor has a DIVERSIFIED BUSINESS; (b) the role you seek to perform is not a role in which the COMPETITOR could benefit from the CONFIDENTIAL INFORMATION to which you had access during the last two (2) years of your employment within the COMPANY; and (c) before you accept the position and begin work for the COMPETITOR, the COMPANY is provided, and has accepted as satisfactory to it, written assurances from both you and the COMPETITOR that you will not be rendering any services which conflict with the obligations in this AGREEMENT.
(Id., Ex. A ¶ 3.3.) Section 3.4 describes a required procedure upon an employee's voluntary resignation:
In the event of a voluntary termination of your employment from the COMPANY, including a resignation, you agree to notify your EMPLOYER in writing at least fourteen (14) days before your anticipated last day of employment. You also agree during the eighteen (18) months after your employment ends to provide your EMPLOYER with fourteen (14) days' written notice of any new employment or any change in position with a COMPETITOR before assuming the new role to allow for the opportunity to obtain written assurances satisfactory to the COMPANY from you and from the COMPETITOR that you will not be rendering services which conflict with the obligations in this AGREEMENT.
(Id., Ex. A ¶ 3.4.) Section 5.1 provides the remedies for a breach of the Agreement:
You agree and acknowledge that your breach of the covenants contained in this AGREEMENT will cause irreparable harm to the COMPANY and that damages arising out of a breach may be difficult to determine. You therefore agree and acknowledge that, in addition to all other remedies provided at law or by equity, the COMPANY shall be entitled to specific performance and temporary and/or permanent injunctive relief, from any court of competentjurisdiction restraining the breach or further breaches from you, your new employer or others acting in concert with you, without the necessity of the COMPANY proving actual damages or posting of a bond.
(Id., Ex. A ¶ 5.1.)
Randall's position with DePuy Synthes ended in October 2019, when he joined Ethicon as its Senior Director for Integration Programs, Robotics and Digital Solutions. (ECF No. 29 at 13.) On August 31, 2020, Randall announced his resignation from Ethicon, and accepted a position of Vice President R&D, Robotics and Surgical Enablers ("Head of Robotics") with Smith & Nephew plc ("Smith & Nephew"). (Id. at 14.) Plaintiffs claim they and Smith & Nephew are both developing innovative and key enabling technologies for state-of-the-art medical device systems involving robotics, navigation, augmented reality, and visualization including in the areas of wound closure, trauma, orthopedic, and joint reconstruction surgery. (ECF No. 1 ¶ 3.) As a result, Plaintiffs now seek an injunction to prevent irreparable harm as a result of the impending threat by Randall to assume the Head of Robotics position with Smith & Nephew in breach of the Agreement, because, inter alia, Randall allegedly had access to competitively critical trade secret and confidential information of Plaintiffs directly related to this Head of Robotics position, with which he could significantly disadvantage Plaintiffs by his use or disclosure of such confidential information. (Id. ¶ 1.)
On September 29, 2020, Plaintiffs filed a Complaint against Randall for breach of contract in this Court (id.), along with an Order to Show Cause with Temporary Restraints seeking a Temporary Restraining Order and Preliminary Injunction to enjoin Randall from directly or indirectly performing work for Smith & Nephew in any position in which he could disadvantage Plaintiffs or advantage Smith & Nephew or any other...
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