Kelly Services v. Eidnes, Civil No. 07-14989.
| Decision Date | 10 January 2008 |
| Docket Number | Civil No. 07-14989. |
| Citation | 530 F.Supp.2d 940 |
| Parties | KELLY SERVICES, Plaintiff, v. Cynthia EIDNES, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
James J. Giszczak, Katherine D. Goudie, Butzel Long, Detroit, MI, for Plaintiff.
Anne Bagno Widlak, Michael P. Donnelly, Fraser, Trebilcock, Detroit, MI, for Defendant.
Before this Court are Plaintiff Kelly Services Inc.'s (Kelly) motion for a preliminary injunction, pursuant to Fed.R.Civ.P. 65(a), and Defendant Cynthia Eidnes's (Eidnes) motions to dismiss for lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)1; for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2); for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6); as well as Eidnes's motion to dismiss or transfer for improper venue, pursuant to 28 U.S.C. §§ 1391, 1404. For the reasons explained below, this Court GRANTS Plaintiffs motion for a preliminary injunction, and DENIES Defendant's motions to dismiss and transfer venue.
Plaintiff Kelly Services is a Delaware corporation with its principal place of business in Troy, Michigan. Defendant Cynthia Eidnes is a citizen and resident of Minnesota. Eidnes is a Stanford Law School graduate who began in the legal staffing business in November 1993 when she joined the Wallace Law Registry. Both parties agree she was very successful in this industry, developing contacts throughout the Minneapolis legal market and establishing a market niche for temporarily placing attorneys for discrete projects.
Eidnes's employment with Kelly Services began the day Kelly Services bought the Wallace Law Registry in May 1996. Without any previous presence in the Minneapolis legal market, Kelly Services relied heavily on Eidnes to continue her success, which she did with the vast majority of her work confined to the greater Minneapolis area.1 On May 1, 2000, Eidnes signed a document entitled "Agreement with Full-Time Employees of Kelly Corporation."2 (Agreement). As relevant to this litigation, the Agreement contained the following non-competition, non-solicitation clauses which were included as consideration for her employment with Kelly Services.
(1) ... I will never disclose, use, copy, or retain any confidential business information or trade secrets belonging to Kelly, Kelly's customers, or Kelly's suppliers. This includes customer and employee lists; sales, service, recruiting and training techniques and manuals; sales and marketing strategies; computer programs; financial date and other similar information.
(2) While I am working for Kelly, I will not solicit any of Kelly's customers or employees for a competing business, and I will not compete against Kelly or associate myself with any Kelly competitor as an employee, owner, partner, stockholder, investor, agent or consultant. These same limitations apply for one year after I leave Kelly in any market area in which I worked or had responsibility during the past five years of my employment with Kelly.
On October 31, 2007, Eidnes informed her immediate supervisor that it would be her last day with Kelly Services. She gave no indication why she was quitting or who she would be working for in the future. It was Only after reviewing the website of Beacon Hills, a direct competitor of Kelly's, that it was discovered that Eidnes had left to become the Beacon Hills Legal Division Director.
Kelly alleges that as part of her employment and because of the nature of her position with Kelly, Eidnes had access to and regularly utilized Kelly's trade secrets and confidential information, including its customer lists, marketing and sales strategies, contractual details for its customers, regional pricing lists and profit margins. Kelly also alleges that Eidnes had at least semi-regular access to this information through Kelly's Troy based computer system. As a result of these development, Kelly claims Eidnes is in violation of the Agreement she signed and that she is in violation of the Michigan Uniform Trade Secrets Act (MUTSA), M.C.L. § 445.1901 et. seq. As a result, Kelly fears that Eidnes will use its trade secrets and confidential information unlawfully and that as a result, it will lose the value of this information as well as customers, clients and revenues.
On December 6, 2007, following arguments on Plaintiffs motion for a Temporary Restraining Order, this Court issued an order restraining Defendant Eidnes from working for a Kelly Services competitor in the Minneapolis area legal staffing market until further notice of this Court. Plaintiff now seeks a preliminary injunction that retrains or enjoins Defendant Eidnes from violating its agreement with Eidnes until November 1, 2008.
Defendant has also filed her own motions. First, Eidnes claims this court does not have subject matter jurisdiction over these facts because the dispute does not amount to $75,000 of damages which is required in a diversity jurisdiction matter such as this. Second, Eidnes argues this court does not have personal jurisdiction over her because she lacked contact with Michigan, other than incidental contacts that bear no relationship to these events. Third, Eidnes argues that Plaintiff failed to state a claim because of the general nature of its complaint. Finally, Eidnes claims the venue chosen is improper because the events and conduct at issue occurred in Minnesota, not Michigan. In the alternative, Eidnes asks that this court to transfer venue to Minnesota as a matter of convenience.
The Court will address Defendant's Motions first, and then address Plaintiffs Motion for a Preliminary Injunction.
Eidnes argues that this court does not have subject matter jurisdiction because the damages alleged are indefinite and not readily ascertained, pursuant to Federal Rules of Civil Procedure 12(b)(1). Subject matter jurisdiction based on diversity citizenship requires $75,000 to be at stake, exclusive of attorney fees and court costs. When the amount in controversy is challenged by the Defendant, the Complaint will be dismissed only "if it appears to a legal certainty that the plaintiff in good faith cannot claim the jurisdiction amount." Massachusetts Cas. Ins. Co. v. Harmon, 88 F.3d 415, 416 (6th Cir.1996) Plaintiff is not required to show an absolute certainty that it will be entitled to a verdict in excess of $75,000. Instead, there must be a legal certainty that Plaintiff will not recover that amount for this matter to be dismissed for lack of subject matter jurisdiction. Olden v. LaFarge Corp., 203 F.R.D. 254, 259-60 (E.D.Mich. 2001) (Lawson, J.)
I cannot conclude that there is a legal certainty that Plaintiff will not be able to recover more than $75,000 in damages. If Defendant were allowed to work in the Minneapolis market, based upon the affidavits submitted by both parties to this Court, it is very conceivable that it would only take several customers or contracts before Plaintiff sustained over $75,000 in lost business. It is undisputed that Eidnes is very capable and successful. Losing her services in violation of the agreement that she made with Plaintiff would almost certainly cause damages in excess of $75,000. I therefore, DENY Defendant's motion to dismiss for lack of subject matter jurisdiction.
Eidnes moves to dismiss this case for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). She argues that she is a resident of Minnesota and has come to Michigan once, for a training session entirely unrelated to her job with Kelly Services. Moreover, she claims that the events and facts of this case occurred in Minnesota, and not Michigan.
Plaintiff bears the burden of establishing personal jurisdiction. Bird v. Parsons, 289 F.3d 865, 871 (6th Cir.2002). When the evaluation of personal jurisdiction is made without an evidentiary hearing, the Plaintiff "need only make a prima facie showing of jurisdiction." Id. at 871. The Sixth Circuit has instructed this Court to consider the pleadings and affidavits in a light most favorable to the Plaintiff. Plaintiff's burden is "relatively slight." Kelly Services, Inc. v. Noretto, 495 F.Supp.2d 645, 651 (E.D.Mich.2007) (Gadola, J.)3; McCuiston v. Hoffa, 313 F.Supp.2d 710, 715 (E.D.Mich.2004)(Feikens, J.).
To establish personal jurisdiction in this district, Plaintiff must show that (1) Michigan's long-arm statute supports this court's exercise of personal jurisdiction, and (2) that the Due Process Clause of the Fourteenth Amendment is not violated by that exercise. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 888 (6th Cir.2002); Niemi v. NHK Spring Co. Ltd., 276 F.Supp.2d 717, 719-20 (E.D.Mich.2003)(Feikens, J.) The first requirement is uncontested, and, in any event, that standard of the Michigan Long Arm Statute is "extraordinarily easy to meet." Noretto, 495 F.Supp.2d at 652. The slightest act of business meets this standard, and that is conceded by both parties as both cite to a training meeting Eidnes attended at Kelly Services' Troy. Headquarters. Further, Defendant signed the contract to work for Michigan based Kelly Services which is at issue in this matter.
The second step ascertains whether Defendant has the requisite minimum contacts with this state so that personal jurisdiction over the suit does not offend "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The Sixth Circuit has instructed this Court to apply a three-part analysis in determining this analysis. First, Plaintiff must show that Defendant purposefully availed herself of the...
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