Opinion
Civil Action No. 07-40023-FDS.
July 31, 2007
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO DISMISS
This action arises out of an employment relationship between plaintiff Optasite, Inc., and a former employee, defendant Donald Taylor Robinson. Optasite alleges that Robinson used the company's money, employees, contractors, and other resources to develop an independent business in violation of (among other things) his employment agreement. The complaint asserts claims of breach of fiduciary duty, interference with contract and advantageous business relationships, conversion, deceit, breach of contract, and violations of Mass. Gen. Laws ch. 93, § 42 (taking of trade secrets). Jurisdiction is based on diversity of citizenship.
Defendant has moved to dismiss the case, contending that a forum selection clause in the parties' employment agreement provides for venue in Delaware, not Massachusetts. Defendant further seeks dismissal on the grounds that this Court lacks personal jurisdiction over him. In response, plaintiff contends that it would be unreasonable and unfair to enforce the forum selection clause. For the reasons stated below, the motion to dismiss will be granted without prejudice.
Plaintiff also contends that defendant's motion should be denied for failure to comply with the Local Rules regarding appearances. Defendant, a member of the Alabama bar, did not seek leave to appear pro hac vice pursuant to Local Rule 83.5.3(b). Nor did he follow his signature with the words "pro se," in accordance with Local Rule 83.5.2(b). Because these are mere technical violations, the Court will not deny the motion to dismiss on these grounds.
I. Background
Plaintiff Optasite is a Delaware corporation with a principal place of business in Massachusetts. Plaintiff owns tower sites and provides acquisition and development services to wireless carriers, broadcasters, public safety organizations, and private enterprises throughout the United States. Defendant is a licensed attorney and citizen of Alabama.
In February 2005, the parties entered into an employment agreement whereby defendant became Vice President of plaintiff's Southeast Region. Defendant was in charge of operations throughout Alabama, Georgia, Tennessee, Mississippi, Louisiana, and northern Florida. His duties were to build cellular towers in the region and lease them to plaintiff's customers.
The agreement between the parties includes terms defining defendant's extent of service for plaintiff; definitions of confidential information; a non-competition clause; and a non-solicitation and no-hire clause. The employment agreement also includes a forum selection clause:
21. Jurisdiction/Venue. The Employee and the Employer hereby designate the appropriate Courts for the State of Delaware, or the United States District Courts for the State of Delaware, as the exclusive courts of proper jurisdiction and venue of and for any and all lawsuits or other legal proceedings relating to this Agreement; hereby irrevocably consent to such designation, jurisdiction and venue; and hereby waive any objection or defense relating to jurisdiction or venue with respect to any lawsuit or other legal proceeding initiated in or transferred to the above courts.
The complaint alleges that defendant violated the employment agreement by using Optasite's confidential information, personnel, and other resources to acquire and develop tower sites for his personal benefit. Optasite contends that defendant hired personnel to perform services unrelated to and contrary to its business interests, and improperly obtained and used proprietary information and trade secrets to support an independent business in direct competition with it.
II. Analysis
Defendant has moved to dismiss on the basis of the forum selection clause and for lack of personal jurisdiction. According to defendant, because each of plaintiff's claims relates to the employment agreement, the forum selection clause requires dismissal of the present action. On the issue of personal jurisdiction, defendant contends that he has not had the requisite continuous and systematic contacts with the Commonwealth of Massachusetts. Because this dispute is governed by the forum selection clause, the Court does not reach the issue of personal jurisdiction.
In his motion to dismiss, defendant sets forth the grounds for relief under the general headings "Forum Selection Clause" and "Minimum Contacts Analysis." He does not invoke a specific Federal Rule of Civil Procedure as a vehicle for dismissal. In the First Circuit, when a party seeks dismissal on the basis of a forum selection clause, the motion is treated as one to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). See Silva v. Encyclopedia Britannica Inc., 239 F.3d 385, 387 (1st Cir. 2001); Lambert v. Kysar, 983 F.2d 1110, 1112 n. 1 (1st Cir. 1993); LFC Lessors, Inc. v. Pacific Sewer Maint. Corp., 739 F.2d 4, 7 (1st Cir. 1984).
Specifically, defendant suggests that the forum selection clause "precludes this Court from exercising jurisdiction over this matter." This argument misconceives the jurisdictional impact of a forum selection clause, for "even a mandatory forum-selection clause does not in fact divest a court of jurisdiction that it otherwise retains." Silva, 239 F.3d at 388 n. 6. Rather, a forum selection clause "merely constitutes a stipulation in which the parties join in asking the court to give effect to their agreement by declining to exercise its jurisdiction." LFC Lessors, 739 F.2d at 6 (quoting Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341, 345 (3d Cir. 1966)).
It is well-settled that a forum selection clause "should control absent a strong showing that it should be set aside." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). A forum selection clause is enforceable except where it could be shown to be "unreasonable or unjust, or that the clause was invalid for such reasons as fraud or overreaching." Id. See also Restatement (Second) of Conflict of Laws § 80 (1988 revision) ("The parties' agreement as to the place of the action will be given effect unless it is unfair or unreasonable").
Plaintiff does not appear to challenge the reasonableness of the forum selection clause, but contends that the clause does not apply to the majority of its claims. The forum selection clause designates the courts of Delaware as "the exclusive courts of proper jurisdiction and venue of and for any and all lawsuits or other legal proceedings relating to this Agreement." (emphasis added.) According to plaintiff, the clause applies only to its breach of contract claim, as the remaining claims are based in tort or statutory law and not the employment contract. The determination of whether the clause applies to plaintiff's tort and statutory claims therefore hinges on whether these claims "relate to" the employment agreement.
"We cannot accept the invitation to reward attempts to evade enforcement of forum selection agreements through artful pleading of tort claims in the context of a contract dispute." Lambert v. Kysar, 983 F.2d 1110, 1121 (1st Cir. 1993) (citation and internal quotation omitted) (holding that forum selection clause on an order form made venue proper in Washington State as to both contract claims and related tort claims). A forum selection clause applies to non-contract claims "where the basic source of any duty owed by defendants to the plaintiff is derived from the contractual relationship structured by the underlying agreement." Doe v. Seacamp Ass'n, Inc., 276 F. Supp. 2d 222, 228 (D. Mass. 2003) (quoting McAdams v. Massachusetts Mut. Life Ins. Co., 2002 WL 1067449, at *12 (D. Mass. May 15, 2002)). Therefore, contract-related tort claims "involving the same operative facts as a parallel claim for breach of contract should be heard in the forum selected by the contracting parties." Lambert, 983 F.2d at 1121-22. In the setting of an employment contract, a forum selection clause governs tort claims that arise out of the existence of the contract. See Marinechange Shipping Ltd. v. Sebastian, 143 F.3d 216, 222-23 (5th Cir. 1998) (holding that seamen were bound by forum selection clause in employment agreement to litigate tort causes of action in the Phillippines); see also Cuno, Inc. v. Hayward Indus. Products, Inc. No. 03 Civ. 3076(MBM), 2005 WL 1123877, at *4 (S.D.N.Y. May 10, 2005) (applying forum selection clause to other claims that depended on the existence of a contractual employment relationship between the parties).
It appears that plaintiff is challenging a forum selection clause that its own attorneys drafted and approved. Usually the concern about enforcing a forum selection clause in an employment contract is the possibility of unequal bargaining power between the employer and the employee. That concern seems to be of minimal significance here.
The fact that plaintiff has presented a variety of claims in contract (breach of contract), tort (breach of fiduciary duty, interference with contract and advantageous business relationships, conversion, and deceit), and statutory law (taking of trade secrets) does not compel a different result. Indeed, in its complaint, plaintiff sets forth several pages of "facts common to all counts." (emphasis added). Within these facts, plaintiff quotes the Employment Agreement extensively, including the "Extent of Service," "Confidential Information," "Non-Competition," and "Non-Solicitation and No-Hire" provisions. Plaintiff then describes how defendant violated those contractual provisions by developing tower sites for his personal benefit and using its money and employees to further his own business interests. Because the complaint directly states that these facts are common to all the counts, it is illogical to argue that the tort and statutory claims "have nothing to do" with the contract. More importantly, the basic source of defendant's duties to plaintiff is the employment agreement. Plaintiff must honor that agreement — which it appears to have drafted — by litigating its claims in the designated forum of Delaware. See Doe, 276 F. Supp. 2d at 228.
III. Conclusion
For the foregoing reasons, defendant's motion to dismiss the complaint on the basis of a forum selection clause is GRANTED. The dismissal is without prejudice to plaintiff's bringing the action in a court which is in compliance with the forum selection clause.