Keener v. Convergys Corp.

• Decision Date: 20 February 2002
• Docket Number: No. 01-CV-182.,01-CV-182.
• Citation: 205 F.Supp.2d 1374
• Parties: James A. KEENER, Plaintiff, v. CONVERGYS CORPORATION, Defendant.
• Court: U.S. District Court — Southern District of Georgia

205 F.Supp.2d 1374

James A. KEENER, Plaintiff, v. CONVERGYS CORPORATION, Defendant.

No. 01-CV-182.

United States District Court, S.D. Georgia, Savannah Division.

February 20, 2002.

Wade Wilkes Herring, II, Colin A. McRae, Hunter, Maclean, Exley & Dunn, Savannah, GA, for James A. Keener, plaintiff.

Dana F. Braun, R. Krannert Riddle, Callaway, Braun, Riddle & Hughes, PC, Savannah, GA, Grant S. Cowan, Frost, Brown & Todd, LLC, Cincinnati, OH, for Convergys Corporation, defendant.

ORDER

EDENFIELD, District Judge.

I. INTRODUCTION

Insisting that his non-compete agreement (NCA) with defendant Convergys Corporation is unenforceably overbroad and violates public policy, plaintiff James A. Keener filed this action seeking injunctive relief against, and various damages from, Convergys. Doc. ## 1, 3. Keener is pursuing a judgment declaring the NCA unenforceable, preventing Convergys from enforcing it. Doc. # 1, Counts One & Two; doc. # 4.

Plaintiff also raises a tortious interference with contract claim and seeks O.C.G.A. § 13-6-11 attorney fees. Doc. # 1, Counts 3-4. Convergys counterclaims for an injunction enforcing the NCA's substance, if not restitution of the consideration paid to Keener, and for attorney fees/costs. Doc. # 11 at 6-12.

Following Keener's F.R.Civ.P. 65(b) notice, doc. # 5, the parties entered into a time-extension Consent Order and a confidentiality stipulation, doc. ## 9, 19, then undertook discovery. Doc. # 31 ¶ 5. Over Convergys's opposition, doc. # 29, Keener now moves for summary judgment. Doc. # 23.

II. SUMMARY JUDGMENT STANDARDS

This Court applies the summary judgment principles explained in Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742-43 (11th Cir.1996) and Cohen v. United American Bank of Cent. Fla., 83 F.3d 1347, 1349 (11th Cir.1996). Unrebutted, evidentially supported Fact Statements are deemed admitted under S.D.GA.LOC. R. 56.1 and Dunlap v. Transamerica Occidental Life Ins. Co., 858 F.2d 629, 632 (11th Cir.1988).

Thus, a party may not simply "deny" or "controvert" an opposing party's evidentially supported S.D.GA.LOC.R. 56.1 statement. See, e.g., Tapley v. Collins, 41 F.Supp.2d 1366, 1368 n. 1 (S.D.Ga.1999), rev'd in part on other grounds, 211 F.3d 1210, 1216 (11th Cir.2000). Instead, the nonmoving party must rebut the fact statement with evidence or show that it is not evidentially supported. Otherwise, the fact is established.

Therefore, where Convergys has failed to rebut Keener's factual statements by either (a) showing them to be evidentially unsupported; or (b) rebutting them with competent evidence, those facts will be established. This includes statements like Keener Fact Statement # 2—Convergys has not rebutted it but simply points to other facts.

III. BACKGROUND

Providers of wireless communications like wireless telephones use a computer-driven interface to provide their services. That requires constantly evolving computer hardware and software.¹ Companies like Convergys employ "knowledge workers" like Keener to construct and maintain such interfaces.²

The interface technology itself requires substantial resources to develop. Companies like Convergys point to that fact when competing for wireless providers' business.³ Convergys, in fact, claims it is "the world's largest provider of integrated customer care and billing services." www.convergys.com/cc.html (site as of 2/20/02).

Knowledge of the interface technology naturally winds up in the minds of knowledge workers to whom competitors are naturally attracted. See supra note 2. Employers therefore employ trade-secret protection measures like NCAs to deter competitors. When an employee jumps to a competitor's ship, the original employer sometimes need only remind his competitor of the NCA to cause "jumper-termination" under the implied if not actual threat of litigation.

That's essentially what happened here. Keener, while employed by a Convergys predecessor, signed a 1995 NCA which granted him stock options. Doc. # 29 exh. A; see also doc. # 26 ¶ 4. At that time, he worked first in an Ohio Convergys facility, but in 7/96 moved to an Illinois office to fill a "development management role" for a major Convergys client. Doc. # 35 at 31-32.

There, Convergys contends, Keener was "responsible for the development of enhancements and product support of a large volume customer care billing system...." Doc. # 29 at 5. Keener says that in 1999 he followed an organizational split wherein he "took over [system] performance enhancements —that's like making the system run better, more efficient—and the architecture team, which is a lot of estimating." Doc. # 35 at 47.

Until Keener resigned in 2001, his work basically was "related to the software product .... [the] running of it, either changing the schedules or just some form of improvement of the overall performance." Id. at 48. He concedes he became privy to confidential, proprietary information after 2/95, id. at 45, so he obviously can be presumed to have retained at least some of it when he joined "H.O. Systems, Inc." (H.O.) in 2001. See doc. # 25 at 7-8. And, he concedes that Convergys was, as of 2/95, reaching a national market. Doc. # 35 at 40.

Keener disputes that H.O. is a "true" competitor of Convergys. Doc. # 25 at 6-7; # 35 at 143 ("They're [in] totally different leagues...."). No material fact dispute exists on that score. H.O. is a competitor, just a very small one. See doc. # 35 at 144 ("I mean, you're talking single A versus Major Leagues here, and there's a big difference"); id. at 126-27 (Keener admits he signed an H.O. NCA that specifically references Convergys as its competitor, and that he understood that to mean if he left H.O. he could not go back to work for Convergys); doc. # 34 at 30, 47-48; www. hosystems.com/welcome/company. htm (site as of 2/20/02) ("H.O. Systems currently has client coverage in over 2/3rds of the United States and plans to not only encompass the entire country but to also spread internationally").

Keener disclosed Convergys's NCA to H.O. prior to joining it. Doc. # 35 at 93-94. He exercised his NCA-related stock options just prior to leaving Convergys. Doc. # 35 at 11112. Convergys contacted H.O. after it hired Keener. Doc. # 35 at 140-41. H.O. thereafter terminated Keener but paid him severance. Id. at 145-46. Keener continues to reside in Georgia, where he intends to remain if he prevails here. Id. at 149-50; see also id. at 149 ("Well, I could go back to H.O. potentially"). H.O., a Delaware-registered corporation, is located and transacts business in Savannah, Georgia. Doc. # 29 exh. B-C.

IV. ANALYSIS

The NCA contains time, subject-matter and geographic restrictions, see doc. # 29 exh. A, all of which Keener argues are unenforceably overbroad under Georgia law. Doc. ## 25, 30. Convergys says the parties agreed that Ohio law applies and under it the NCA is enforceable. Doc. # 29 at 14, 22-25.

A. Choice of Law

Ohio law applies, Convergys contends, because the NCA selects it. Doc. # 29 at 14. Pointing out that this Court is sitting in diversity, Convergys cites Bryan v. Hall Chemical Company, 993 F.2d 831, 834 (11th Cir.1993) and Nordson Corp. v. Plasschaert, 674 F.2d 1371 (11th Cir.1982), to support this result. Doc. # 29 at 14.

The NCA states that "[t]his Agreement shall be governed by the laws of the State of Ohio." Doc. # 29 exh. A at 3 ¶ 8. "Generally, Georgia will follow a forum selection clause in an employment contract. However, [the Convergys/Keener] contract involves not a forum selection clause, but a choice of law selection clause and requires a different legal analysis." Hulcher Services, Inc. v. R.J. Corman R.R. Co., L.L.C., 247 Ga.App. 486, 489, 543 S.E.2d 461 (2000) (cite omitted; emphasis added).

That different analysis is applicable here: "Georgia conflicts of law will not follow a contractual selection of law of a foreign state where such chosen law would contravene the public policy of Georgia against certain unlawful covenants not to compete." Id. at 489, 543 S.E.2d 461. The burden is on Keener to show this. Id.; Bryan, 993 F.2d at 834.

The Hulcher employer sought, inter alia, to prevent its employee from working "in any capacity, either directly or indirectly, and from owning, managing, operating, controlling, being employed or connected with in any capacity" any similar business. 247 Ga.App. at 492, 543 S.E.2d 461. Because that was unreasonable, the court held the NCA there void as against Georgia's public policy. Id. at 493, 543 S.E.2d 461.

So, Georgia courts faced with this sort of case first apply Georgia law to determine whether an NCA violates Georgia's public policy. Id; see also Salsbury Laboratories, Inc. v. Merieux Laboratories, Inc., 735 F.Supp. 1545, 1549 (M.D.Ga.1988) (Even where Georgia's conflict of laws rules dictate that law of sister state should apply, district court sitting in diversity should apply Georgia law where application of foreign law would result in decision that either was contrary to Georgia's public policy or was prejudicial to citizens of Georgia). Only if the NCA does not violate public policy will courts apply the contractually selected State law.

Convergys insists Hulcher does not apply because the ex-employer there sought to apply Texas law to an ex-employee who had never worked in Texas and, although the employment contract had been executed there, he had never performed on it in that State. Doc. # 29 at 21-22. And, Convergys points out, the ex-employee had been a Georgia resident the last time he'd worked for his ex-employer. Id.; see also Hulcher, 247 Ga.App. at 488-89, 543 S.E.2d 461. Here, in contrast, Convergys seeks application of Ohio law to an ex-employee who lived, worked and performed on the contract in Ohio at the time it was entered. And, Keener was not a Georgia resident the last time he worked for Convergys.

These are all valid points but they do not carry the day. First, for most of the contractual period (i.e., mid-1996-20...