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Stone Surgical, LLC v. Stryker Corp.

United States Court of Appeals, Sixth Circuit

May 24, 2017

Stone Surgical, LLC, Plaintiff-Appellant,
v.
Stryker Corporation; Howmedica Osteonics Corporation, Defendants-Appellees. Stryker Corporation; Howmedica Osteonics Corporation, Plaintiffs-Appellees,
v.
Christopher Ridgeway, Defendant-Appellant.

          Argued: February 1, 2017

         Appeal from the United States District Court for the Western District of Michigan at Grand Rapids. Nos. 1:13-cv-01066; 1:14-cv-00889-Robert Holmes Bell, District Judge.

         ARGUED:

          Louis C. LaCour Jr., ADAMS AND REESE LLP, New Orleans, Louisiana, for Appellants Stone Surgical and Christopher Ridgeway.

          Michael D. Wexler, SEYFARTH SHAW LLP, Chicago, Illinois, for Appellees.

         ON BRIEF:

          Louis C. LaCour Jr., ADAMS AND REESE LLP, New Orleans, Louisiana, for Appellants Stone Surgical and Christopher Ridgeway.

          Michael D. Wexler, Justin K. Beyer, Robyn E. Marsh, SEYFARTH SHAW LLP, Chicago, Illinois, David J. Gass, MILLER JOHNSON, Grand Rapids, Michigan, for Appellees.

          Before: GIBBONS, ROGERS, and McKEAGUE, Circuit Judges.

          OPINION

          JULIA SMITH GIBBONS, Circuit Judge.

         This case arises out of the deterioration of a decade-plus employment relationship between Stryker Corporation and Christopher Ridgeway. Stryker, a medical-device manufacturing company, employed Ridgeway as a sales representative, where he sold customized plates and screws for use in craniomaxillofacial (CMF) surgery on Stryker's behalf in his Louisiana-based sales territories. In 2013, however, the relationship between Stryker and Ridgeway became strained as Ridgeway sought other business opportunities with a regional competitor, Biomet. Stryker terminated Ridgeway as a result. Litigation ensued, a jury trial was conducted in the Western District of Michigan, and judgment was awarded to Stryker. At the core of the present dispute is a non-compete agreement Ridgeway signed at the start of his tenure with Stryker and whether that agreement is valid. For the reasons that follow, the district court properly ruled for Stryker.

         I.

         Christopher Ridgeway was employed as a sales representative by Stryker Corporation and Howmedica Osteonics Corporation (collectively, "Stryker") from 2001 to 2013. Stryker offered Ridgeway the sales representative position through a sixteen-page fax letter on October 24, 2001. Ridgeway's employment was contingent on his signing and returning certain attached documents-an offer letter, a form non-compete agreement, and a code of conduct. From 2000 to 2005, Stryker used the same form non-compete agreement with all employees, which included a one-year non-compete clause, a customer non-solicit clause, and an employee non-solicit clause. The non-compete agreement included a Michigan choice-of-law clause and a Michigan forum-selection clause. On October 25, 2001, Ridgeway accepted the job offer with a four-page fax containing a cover page, the signed offer letter, and executed signature pages for his form non-compete agreement and code of conduct. The cover letter stated: "Here are signed copies of my offer letter, non-compete agreement, and code of conduct."

         Once hired, Ridgeway was responsible for selling Stryker medical-device products to customers within his Louisiana-based sales territories. During this time, Ridgeway received products from Stryker at his home in Louisiana, delivered products to Louisiana doctors and hospitals, and conducted sales meetings with other employees in his Louisiana territories. Despite becoming one of Stryker's top performers, in 2013, Ridgeway began to consider working for a Stryker competitor, Biomet.[1]

         At this point, Ridgeway's and Stryker's accounts of their business relationship diverge. Ridgeway says that he discussed on multiple occasions with Stryker management the fact that he did not have a non-compete agreement as part of his employment contract. Specifically, he alleges he asked Stryker's Human Resources director whether an agreement existed in his file, and the director told him it did not. Based on Stryker's assurances, Ridgeway began talking to Biomet about future employment opportunities.

         Stryker contends that its management did not, at any time, represent to Ridgeway that he was not covered under a non-compete agreement. The conversation Ridgeway references with the Stryker Human Resources director, according to Stryker, concerned whether Ridgeway had to sign a new non-compete agreement to receive the stock options associated with his 2012 promotion to District Sales Manager. Stryker maintains that the director merely told Ridgeway that she did not see a new stock-option non-compete in his personnel file. The director followed up their conversation with an email titled "Stock" that allegedly detailed the same. The company states that all Stryker employees were required to sign the initial form non-compete or else they would not be hired, so it was impossible for Ridgeway to have worked for them without signing one.

         When Stryker got wind that Ridgeway was considering working with Biomet, two Stryker representatives traveled to Louisiana and fired Ridgeway, effective immediately. At that September 10, 2013 meeting, Ridgeway was given a termination letter, which reminded him of his obligation to protect confidential Stryker trade secrets. Following his termination, Ridgeway began working for Biomet within his former Stryker Louisiana-based sales territories.[2]

         Stryker filed suit against Ridgeway in the Western District of Michigan, claiming breach of contract, breach of fiduciary duty, and misappropriation of trade secrets. Ridgeway moved to dismiss for lack of personal jurisdiction, which the district court denied based on the forum-selection clause in the non-compete agreement. Ridgeway also counterclaimed, alleging various counts including fraud under Louisiana law.

         While the Michigan suit was pending, Ridgeway's company, Stone Surgical, filed suit against Stryker in the Eastern District of Louisiana. This action was transferred to the Michigan forum and consolidated with the first-filed Michigan action. Stryker moved for a preliminary injunction against Ridgeway, seeking to prevent him from continuing his Biomet employment until resolution of this litigation; the motion was denied but had the effect of ending Ridgeway's and Biomet's business relationship out of Biomet's fear of liability.

         Leading up to trial, a dispute arose between Stryker and Ridgeway over the authenticity of the non-compete agreement attached as an exhibit to Stryker's initial complaint. When Stryker filed its complaint, it attached as an exhibit the company's form non-compete agreement as well as the signature page of Ridgeway's agreement, which contains the document control number 573287.03. Ridgeway contends that Stryker fabricated the document by attaching his signed page to a form non-compete agreement, rather than the original that accompanied his entire agreement. Stryker, on the other hand, contends that it never possessed a returned version of the entire agreement, but rather only the signature page, which was attached to the October 25, 2001 fax in which Ridgeway accepted his employment. The terms of all 132 form non-compete agreements with the same document control number as ...


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