Rimkus Consulting Group Inc. v. Cammarata - Ballard Spahr LLP

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Case 4:07-cv-00405 Document 450 Filed in TXSD on 02/19/10 Page 40 of 139 Louisiana state trial court declared that the nonsolicitation-of-employees clause in the defendants’ Employment Agreements was “ambiguous and unenforceable.” (Docket Entry No. 105, Ex. D). In this federal suit, Cammarata filed two motions to dismiss Rimkus’s claims for breach of the noncompetition and nonsolicitation provisions in the Employment Agreement. Cammarata based his motions to dismiss on the preclusive effect of the Louisiana state court ruling invalidating the noncompetition, nonsolicitation, forum-selection, and choice-of-law provisions in the Employment Agreement. (Docket Entry Nos. 71, 105). In ruling on Rimkus’s application for a preliminary injunction, this court concluded that the Louisiana court’s judgment “clearly precludes relitigation of the issue of whether the forum-selection and choice-of-law provision, as well as the noncompetition and nonsolicitation covenants, are unenforceable in Louisiana, under Louisiana law.” (Docket Entry No. 159, August 13, 2008 Memorandum and Opinion at 24). This court decided that, even if Texas law applied and the noncompetition and nonsolicitation provisions were enforceable outside Louisiana, Rimkus was not entitled to the preliminary injunctive relief it sought. Under Texas law, the noncompetition covenant was broader in geographical scope than necessary to protect LA. REV. STAT. § 23:921(A). person or entity includes a choice of forum clause or choice of law clause in an employee’s contract of employment or collective bargaining agreement, or attempts to enforce either a choice of forum clause or choice of law clause in any civil or administrative action involving an employee, shall be null and void except where the choice of forum clause or choice of law clause is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action. 40
Case 4:07-cv-00405 Document 450 Filed in TXSD on 02/19/10 Page 41 of 139 Rimkus’s legitimate business interests and the nonsolicitation covenant was broader than necessary because it applied to all Rimkus customers, not merely those Cammarata had worked with or solicited business from while working for Rimkus. Cammarata again moved to dismiss based on res judicata, asking this court to determine the preclusive effect of the Louisiana court’s ruling outside Louisiana. (Docket Entry No. 169). Cammarata’s motions to dismiss were granted “insofar as Rimkus seeks damages for Cammarata’s postemployment competitive activities inside Louisiana on the basis that those activities breached his Employment Agreement.” (Docket Entry No. 260, March 24, 2009 Memorandum and Opinion at 27). The motions to dismiss were denied with respect to Cammarata’s activities outside Louisiana. (Id.). This court held that the Louisiana state court’s rulings that the forum-selection, choice-of-law, noncompetition, and nonsolicitation contract provisions were unenforceable in Louisiana under Louisiana law did not make those provisions invalid in all states. (Id. at 25). In response to the declaratory judgment complaint Bell and Cammarata filed in Louisiana state court on November 15, 2006, Rimkus filed an answer and a “Reconventional Demand.” 27 Rimkus asserted that “the entirety of this Reconventional Demand should be governed according to the laws of the State of Texas.” (Docket Entry No. 309, Ex. B at 6). Rimkus’s reconventional demand asserted causes of action for breach of the Employment Agreement’s noncompetition, nonsolicitation, and confidentiality provisions, breach of the Common Stock Purchase Agreement, breach of fiduciary duty, and disparagement. (Id.). 27 Under Louisiana civil procedure, a reconventional demand is similar to a counterclaim. 41
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Rimkus Consulting Group Inc. v. Cammarata - Ballard Spahr LLP

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