United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER RE: PLAINTIFF'S
MOTION FOR PRELIMINARY INJUNCTION (DKT. 3)
HONORABLE RONALD E. BUSH, U.S. MAGISTRATE JUDGE.
is Plaintiff's Motion for Preliminary Injunction (Dkt.
3). Having carefully considered the record, heard oral
argument, and otherwise being fully advised, the undersigned
enters the following Memorandum Decision and
Motion for Preliminary Injunction is DENIED for failure to
make a clear showing of likely success on the merits and for
failure to make a clear showing of likely irreparable harm
absent preliminary injunctive relief.
DePuy Synthes Sales, Inc. (“DePuy”) seeks a
preliminary injunction barring Defendant Richard Williams
(“Williams”) from taking actions that DePuy
contends violate a non-competition agreement he signed when
he began employment with DePuy. Williams is now working for
Steelhead Surgical, Inc. (“Steelhead”), a
competitor of DePuy.
its Mitek Sports Medicine division,  DePuy designs, manufactures,
and sells medical devices and instruments for the diagnosis
and treatment of soft tissue joint injuries and conditions in
the market for arthroscopic and sports medicine devices,
instruments, and tools. Decl. of Stephen Stranzl ¶ 3
(Dkt. 3-6) (“Stranzl Decl.”). These products are
used, as may be appropriate, in orthopedic surgeries
involving the shoulder, elbow, hand, wrist, hip, knee, and
ankle. Id. ¶ 4. Orthopedic surgeons use them to
diagnose and treat various joint injuries or conditions such
as ACL reconstruction and meniscus and rotator cuff repair.
Id. The customers involved in buying such devices
are primarily orthopedic surgeons, the medical centers where
they perform procedures, and employees involved with
purchasing medical devices. Id.
hired Williams as an associate sales consultant in June 2015.
Id. ¶ 7. In that role, according to DePuy,
Williams “covered surgical cases in his territory,
participated in sales strategy for his territory, and served
as one of the faces of DePuy Synthes products for the
customers in his territory.” Id. Prior to
starting with DePuy, and as a condition of his employment,
Williams signed an Employee Secrecy, Intellectual Property,
Non-Competition and Non-Solicitation Agreement (the
“Employee Secrecy Agreement”). Id. In
broad terms, the Employee Secrecy Agreement purports to
prohibit Williams from competing with DePuy for 18 months
after the termination of his employment with DePuy. See
generally Employee Secrecy Agreement (Dkt. 1-1). The
parties dispute the enforceability and scope of the Employee
DePuy sales representative, Williams worked in the Boise
area. Stranzl Decl. ¶ 9 (Dkt. 3-6). He worked primarily
with 10 DePuy customer accounts, which are the same customer
accounts DePuy now seeks to enjoin Williams from contacting
on Steelhead's behalf. His responsibilities included attending
surgeries and providing DePuy medical devices when asked.
Decl. of Richard “Jake” Williams ¶ 21
(Dkt.15-1) (“Williams Decl.”). Williams likens
his role to that of a golf caddy, handing equipment to the
professional upon request. Id. Most of
Williams's work involved knee surgeries, but he also had
connections to some shoulder surgeries and he observed some
hand surgeries. Id. ¶¶ 20, 23.
parties dispute the circumstances of Williams's departure
from DePuy. Williams claims he was shown the door after being
led to believe by his supervisor, Bob Davis, and the regional
manager, Stephen Stranzl, that his job was in jeopardy.
Id. ¶¶ 26, 27, 29. Davis and Stranzl both
claim that Williams's job at DePuy was not in jeopardy
and that nobody at DePuy suggested to Williams that it was.
Supplemental Decl. of Stephen Stranzl ¶¶ 15-17
(Dkt. 21-1) (“Stranzl Supplemental Decl.”); Decl.
of Robert “Bob” Davis ¶¶ 14-16 (Dkt.
21-2) (“Davis Decl.”). Regardless, on August 28,
2017 Williams submitted his notice of resignation, effective
September 11, 2017. Stranzl Decl. ¶ 18 (Dkt. 3-6). On
September 11, 2017, Williams began working at Steelhead.
Williams Decl. ¶ 31 (Dkt. 15-1).
distributes sports medicine devices manufactured by Arthrex.
DePuy considers both Steelhead and Arthrex competitors.
Stranzl Decl. ¶ 18 (Dkt. 3-6). Orthopedic surgeons in
the Boise area commonly use products from both DePuy and
Steelhead/Arthrex, sometimes even during the same surgery.
Williams Decl. ¶¶ 33, 38-39.
concluded that Williams intended to represent Steelhead in
the same customer accounts he serviced for DePuy. DePuy's
counsel sent Williams a letter demanding he comply with the
Employee Secrecy Agreement. Decl. of Christopher M. Lindstrom
¶ 2 (Dkt. 3-2); see also (Dks. 3-3). When
Williams began representing Steelhead to DePuy customers,
DePuy's counsel sent a cease and desist letter. Decl. of
Christopher M. Lindstrom ¶ 4 (Dkt. 3-2); see
also (Dkt. 3-5). Subsequently, DePuy filed this lawsuit
and now moves for a preliminary injunction. Subject matter
jurisdiction exists under 28 U.S.C. § 1334, as the
diversity and amount-in-controversy requirements are
injunctions are governed by Federal Rule of Civil Procedure
65. “A preliminary injunction is an extraordinary
remedy never awarded as of right.” Winter v. Nat.
Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). A party
seeking a preliminary injunction must establish that (1) it
is likely to succeed on the merits; (2) it is likely to
suffer irreparable harm in the absence of preliminary relief;
(3) the balance of equities tips in his favor; and (4) an
injunction is in the public interest. Id. at 20. The
court may apply a sliding scale test, under which “the
elements of the preliminary injunction test are balanced, so
that a stronger showing of one element may offset a weaker
showing of another.” Id. However, the party
seeking a preliminary injunction must carry its burden of
persuasion by a “clear showing” of the four
required elements. Mazurek v. Armstrong, 520 U.S.
968, 972 (1997) (per curiam); Lopez v. Brewer, 680
F.3d 1068, 1072 (9th Cir. 2012) (a “preliminary
injunction is an extraordinary and drastic remedy, one that
should not be granted unless the movant, by a clear showing,
carries the burden of persuasion”) (quoting
Mazurek, 520 U.S. at 972).
A Preliminary Injunction Is Not Warranted.
DePuy Has Not Clearly Shown A Likelihood of Success on
succeed on its motion for preliminary injunction, DePuy must
demonstrate it is likely to succeed on the merits of its
claims. DePuy alleges Williams is liable for breaching the
Employee Secrecy Agreement. To evaluate whether DePuy is
likely to succeed on this claim, the Court must first
determine what law governs the Employee Secrecy Agreement.
New Jersey Law Applies to the Employee Secrecy
federal district court sitting in diversity must apply the
forum state's choice of law rules to determine the
controlling substantive law. Fields v. Legacy Health
Sys., 413 F.3d 943, 950 (9th Cir. 2005). Idaho, the
forum state, applies the Restatement (Second) of Conflict of
Laws, including section 187 thereof. Carroll v. MBNA