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Artech Information Systems, LLC v. Protek Consulting

United States District Court, D. Maryland

July 25, 2018

ARTECH INFORMATION SYSTEMS, LLC, Plaintiff,
v.
PROTEK CONSULTING, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Paula Xinis United States District Judge

         Pending before the Court in this civil action is Defendants Richard A. Harrison and ProTek Consulting, LLC's motion to transfer or dismiss the case for improper venue. See ECF No. 12. Also pending are Defendants John Bucy and Adam W. Fishbein's motions to dismiss for failure to state a claim under Federal Rules of Civil Procedure 8(a) and 12(b)(6). See ECF Nos. 10 & 11. The matter has been fully briefed, and the Court now rules because no hearing is necessary. See Loc. R. 105.6. For the reasons below, Defendants' motions are DENIED.

         I. Background[1]

         Plaintiff Artech Consulting, LLC (“Artech”) is a limited liability company headquartered in Morristown, New Jersey, with an office in Rockville, Maryland. ECF No. 1 at ¶ 1. All Artech LLC members are citizens of New Jersey. ECF No. 1 at ¶ 1. Defendants Richard A. Harrison (“Harrison), John Bucy (“Bucy”), Adam W. Fishbein (“Fishbein”) are citizens of Maryland and former Artech employees now working at Defendant ProTek Consulting, LLC (“ProTek”). ECF No. 1 at ¶¶ 3, 4, 5. ProTek is a Maryland limited liability company headquartered in Maryland. ECF No. 1 at ¶ 2.

         In March 2011, Artech purchased the membership interests of a Rockville, Maryland company, Edge Professional Services, LLC (“Edge”). ECF No. 1 at ¶ 11. Prior to the buyout, Edge was owned by Defendant Harrison, who “worked closely” in Edge's senior management with Defendant Bucy. ECF No. 1 at ¶¶ 11, 14. In July 2014, Artech hired Harrison as Senior Vice President of Sales and Operations for Artech. ECF No. 1 at ¶ 11. In this role, Harrison oversaw the operations of Artech's Rockville, Maryland office, and helped with hiring and maintaining positive relationships with Artech employees. ECF No. 1 at ¶ 11. At the time of his hiring, Harrison signed an Employment Agreement with Artech which included a “Non-Solicitation or Hire” clause. This clause provided that should Artech and Harrison's employment relationship end, Harrison could not solicit or employ Artech employees for a 24-month “Post-Employment Non-Solicitation Period.” ECF No. 1 at ¶ 12.

         On March 10, 2016, Harrison resigned from Artech. ECF No. 1 at ¶ 13. He then founded ProTek, where he serves as its Executive Vice President. ECF No. 1 at ¶ 20-21. ProTek is a direct competitor to Artech. ECF No. 1 at ¶ 21. Since founding the company, Harrison has hired at least six Artech employees to work at ProTek. ECF No. 1 at ¶¶ 12, 23.

         Defendants Bucy and Fishbein were formerly employed by Artech and now work at ProTek. Bucy was hired by Artech in December 2015 and served as its Managing Director for the Capital Region from April 2016 through his resignation on March 31, 2017. ECF No. 1 at ¶¶ 15, 16. Before starting at Artech, Bucy signed an Employment Agreement that included a “NonCompetition” clause prohibiting Bucy from working with any Artech competitor within a 50 mile radius of Artech for at least 24 months after separation from the company. ECF No. 1 at ¶ 25; see also ECF No. 1-3. Following Bucy's resignation from Artech, Bucy began working as a Vice President for ProTek. ECF No. 1 at ¶ 26. In this new position, Bucy “directly or indirectly” solicits business from one or more of Artech's customers. ECF No. 1 at ¶ 26.

         Defendant Fishbein worked out of Artech's Rockville, Maryland office as a Technical Recruiter from May 5, 2014 through his resignation on February 18, 2017. While at Artech, Fishbein identified and developed new Artech customers and supported existing clients. Similarly to Defendant Bucy, Fishbein's Employment Agreement with Artech included a non-compete clause which prohibited employment with an Artech competitor for a period of 24 months, within a radius of 30 miles of Artech's Rockville, Maryland office. ECF No. 1 at ¶ 27. Following his resignation, Fishbein joined ProTek as a Senior Recruiter. ECF No. 20 at 3.

         On November 21, 2017, Artech filed suit against Defendants for breach of contract, tortious interference, and unfair competition, seeking both monetary and injunctive relief. See ECF No. 1. On December 22, 2017, Bucy and Fishbein moved to dismiss the action on the grounds that Plaintiff failed to state a claim, while ProTek and Harrison moved to dismiss or transfer the action, seeking to enforce a forum selection clause included only in Harrison's employment agreement. See ECF Nos. 10, 11, 12. The Court will first address Harrison and ProTek's motion.

         II. Defendants Harrison and ProTek's Motion to Transfer or Dismiss

         Artech sues Harrison for breach of contract (Count I) and Harrison and ProTek for tortious interference with contract (Count II), and unfair competition (Count V). Harrison and ProTek seek transfer or dismissal of these claims under 28 U.S.C. § 1404(a) and Federal Rule of Civil Procedure 12(b)(3). See ECF No. 12. Harrison and ProTek argue that the forum selection clause in Harrison's Employment Agreement compels such result because the clause specifically sets out that any action arising from a breach of the Employment Agreement must be brought in Washington state. ECF No. 12 at 1; ECF No. 13-1 at 14. The clause more particularly states that:

[T]he parties agree irrevocably to submit to the exclusive jurisdiction of the federal and state courts of the State of Washington, for the purpose of any suit, action, or other proceeding brought by any party arising out of any breach of any of the provisions of this Agreement . . . .

ECF Nos. 1-2 & 12 at 4.

         As a preliminary matter, the Court must first determine what law applies to the disputed forum selection clause. See Koch v. America Online, Inc., 139 F.Supp.2d 690, 692 (D. Md. 2000). Harrison's Employment Agreement provides that it “shall be governed and construed in accordance with the laws of the State of New Jersey, ” and Artech urges the Court to apply New Jersey law. ECF No. 13-1 at 14. Application of a forum selection clause, however, is a procedural matter, and a “federal court sitting in diversity jurisdiction will apply federal law, ” even where the contract includes a valid choice of law provision. See White Oak Power Constructors v. Alstom Power, Inc., No. CB-17-1437, 2017 WL 5158507, at *3 (D. Md. Nov. 7, 2017); Albemarle Corp. v. AstraZeneca UK ...


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