Russomano v. Novo Nordisk Inc.

• Decision Date: 02 June 2020
• Docket Number: No. 20-1173,20-1173
• Citation: 960 F.3d 48
• Parties: Thomas A. RUSSOMANO, Plaintiff, Appellee, v. NOVO NORDISK INC., Defendant/Third Party Plaintiff, Appellant, v. BioMarin Pharmaceutical, Inc., Third Party Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

960 F.3d 48

Thomas A. RUSSOMANO, Plaintiff, Appellee,

v.NOVO NORDISK INC., Defendant/Third Party Plaintiff, Appellant,

v.BioMarin Pharmaceutical, Inc., Third Party Defendant, Appellee.

No. 20-1173

United States Court of Appeals, First Circuit.

June 2, 2020

S. Elaine McChesney, Bryan Killian, and Morgan, Lewis & Bockius LLP, Boston, MA, on brief for appellant.

Christopher M. Morrison and Jones Day, Boston, MA, on brief for appellees.

Before Torruella, Lynch, and Kayatta, Circuit Judges.

LYNCH, Circuit Judge.

Pharmaceutical company Novo Nordisk Inc. ("Novo Nordisk") filed a motion for a temporary restraining order and preliminary injunction against Thomas Russomano, one of its former employees, and BioMarin Pharmaceutical, Inc. ("BioMarin"), another pharmaceutical company and Russomano's current employer. The motion sought to enforce the terms of a confidentiality and non-compete agreement that Russomano signed when he was employed at Novo Nordisk. The agreement forbade Russomano from working for a competitor in certain positions for a year after the end of his Novo Nordisk employment and from ever disclosing any confidential information.

The district court denied Novo Nordisk's motion because it found that Novo Nordisk could not show a likelihood of success on the merits. The court found that Russomano was likely no longer bound by the non-compete portion of the agreement because, by its terms, those provisions expired twelve months after the termination of Russomano's employment, and Novo Nordisk briefly laid him off in 2018 before rehiring him without having him sign a new non-compete agreement. Novo Nordisk argues that Russomano was not laid off in 2018 but instead transferred positions within the company, such that his employment was not terminated until Russomano resigned in early 2020. Finding no abuse of discretion, we affirm the district court's denial of Novo Nordisk's motion.

I.

A. Factual Background

Russomano began his employment with Novo Nordisk on January 25, 2016, as a Hemophilia Community Specialist for the New England region. As a condition of his employment, he signed a confidentiality and non-compete agreement on December 14, 2015. The non-compete provisions applied "during [Russomano's] employment and for a period of twelve months following the termination of [his] employment for any reason, voluntary or involuntary."

On October 24, 2016, Novo Nordisk told Russomano that his position was being eliminated, and he would be laid off. On November 18, 2016, Russomano's employment was terminated, along with all other fifteen to twenty employees in the same role. He reapplied for open positions at Novo Nordisk, and after an approximately three-week period during which Novo Nordisk did not employ him, on December 8, 2016, the company rehired Russomano as a Hemophilia Therapy Manager for the Penn West region, encompassing New York, Pennsylvania, and West Virginia.

The job started on December 12, 2016.¹ This position differed from his previous one in several ways. His salary was higher, the region his position covered was larger, and he interacted with patients less often. As a condition of being rehired, Russomano signed a second confidentiality and non-compete agreement on December 7, 2016, which was identical to the 2015 agreement.

Approximately a year and a half later, on June 20, 2018, Novo Nordisk sent Russomano a new letter informing him that it was eliminating his position and terminating his employment as part of a "realignment" of its business. The letter stated: "Based on the new operating model design, your position will be eliminated and your employment will end effective August 3, 2018 (the 'Separation Date')." The letter acknowledged that "one of [his] first priorities ... will be finding new employment" and encouraged Russomano to apply for "a number of open positions throughout the organization." Finally, the letter discussed the conditions Russomano would need to meet in order to receive severance benefits, which included remaining in his role until the Separation Date, abiding by the company's rules and policies, and "not accept[ing] an alternate position with Novo Nordisk prior to the Separation Date."

Russomano then applied for open positions in the company and, after interviewing, was offered the different position of Senior Hemophilia Community Liaison -- New York, NY. Novo Nordisk sent Russomano a letter "formally confirm[ing his] transfer" to the new position. Russomano's start date in the new role was "[e]ffective August 6, 2018," a Monday three days after the Friday end date specified in the earlier letter Novo Nordisk sent Russomano notifying him of his employment's termination. Russomano was not required to sign a new confidentiality and non-compete agreement as part of accepting this new job.

Senior Hemophilia Community Liaison was a new role within the organization. The offer letter Russomano received described the role as offering him "the opportunity to work with new colleagues and learn a new area." Russomano was no longer responsible for interfacing with prescribers and potential prescribers. The boundaries of his territory changed again. And his incentive compensation was decreased by more than ten thousand dollars.

Russomano resigned from his position at Novo Nordisk on January 6, 2020. His first day at BioMarin as a "Senior Account Manager -- Hemophilia Gene Therapy" was January 21, 2020.

B. Procedural History

Despite Russomano's request, Novo Nordisk declined to give Russomano written assurance that it did not intend to try to enforce the non-compete provisions of the agreement against him for his new role at BioMarin. In consequence, on January 9, 2020, Russomano sued Novo Nordisk in state court seeking a declaratory judgment that his future employment with BioMarin would not violate a confidentiality and non-compete agreement he signed while working at Novo Nordisk.²

Novo Nordisk removed the case to federal court on January 15, 2020, and filed counterclaims against Russomano on January 21, 2020, for breach of contract, unfair competition, and misappropriation of trade secrets. The same day, it also filed a third-party complaint against BioMarin for tortious interference with a contract, unfair competition, and misappropriation of trade secrets.

On January 21, 2020, Novo Nordisk filed a motion for a temporary restraining order and preliminary injunction against Russomano and BioMarin. In its motion, Novo Nordisk asked the district court (1) to enjoin Russomano, for a year, from violating the terms of the Agreements; (2) to enjoin BioMarin, for a year, from employing Russomano in violation of the Agreements; and (3) to enjoin Russomano and BioMarin from "using, disclosing or misappropriating" confidential information. Russomano and BioMarin opposed the motion on January 21 and 24, 2020.

The district court heard testimony on Novo Nordisk's motion on January 27 and 28, 2020. Russomano testified, as did John Cones, the BioMarin employee who recruited and hired Russomano, and Tammy Shelor-Blain, a Novo Nordisk BioPharm Region Director who supervised Hemophilia Therapy Managers and Community Liaisons like Russomano. The parties submitted evidence including declarations from Russomano, Cones, Shelor-Blain, and Keith Middleton, a Novo Nordisk Human Resources employee.

The court denied Novo Nordisk's motion for a temporary restraining order and preliminary injunction on February 5, 2020. It wrote that "at this stage," based on a "review of the evidence presented," Russomano's employment subject to his December 7, 2016, agreement with Novo Nordisk was terminated on August 3, 2018. The court viewed the language Novo Nordisk used in its letter notifying Russomano that his position would be eliminated as unambiguous, and it rejected Novo Nordisk's argument that the termination of Russomano's employment was conditional upon him not finding a new position with the company. It found that the twelve-month non-compete provisions he agreed to in 2016 had expired in August 2019, twelve months after he left his position in August 2018, and Russomano thus was free to work in any role at BioMarin.³

Novo Nordisk timely appealed the district court's denial of the preliminary injunction on February 7, 2020. We have jurisdiction under 28 U.S.C. § 1292(a)(1).

II.

A. Standard of Review and Choice of Law

A trial court ruling on a motion for a preliminary injunction must consider the following four factors: "'the movant's likelihood of success on the merits'; 'whether and to what extent the movant will suffer irreparable harm' in the absence of injunctive relief; 'the balance of [relative] hardships,' that is, the hardship to the nonmovant if enjoined as opposed to the hardship to the movant if no injunction issues; and 'the effect, if any, that an injunction [or the lack of one] may have on the public interest.' " CVS Pharmacy, Inc. v. Lavin, 951 F.3d 50, 55 (1st Cir. 2020) (alterations in original) (quoting Corp. Techs., Inc. v. Harnett, 731 F.3d 6, 9, (1st Cir. 2013) ).

Novo Nordisk's likelihood of success on the merits is the factor that "weighs most heavily in the preliminary injunction analysis." Id. (citing Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 16 (1st Cir. 1996) ). "[I]f the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity." Maine Educ. Ass'n Benefits Tr. v. Cioppa, 695 F.3d 145, 152 (1st Cir. 2012) (alteration in original) (quoting New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002) ).⁴

We review the district court's ruling on a motion for a preliminary injunction for abuse of discretion. Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 31 (1st Cir. 2011). Within that framework, "we examine legal questions de novo, findings of fact for clear error, and the balancing of the four factors for abuse of discretion." CVS Pharmacy, Inc., 951 F.3d at...