COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION v. FRANCHITTI

CourtDistrict Court, D. New Jersey
DecidedJuly 19, 2022
Docket3:21-cv-16937
StatusUnknown

This text of COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION v. FRANCHITTI (COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION v. FRANCHITTI) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION v. FRANCHITTI, (D.N.J. 2022).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

COGNIZANT TECHNOLOGY Civil Action No. SOLUTIONS and COGNIZANT 3:21-cv-16937 (PGS)(RLS) TECHNOLOGY SOLUTIONS USS. CORPORATION MEMORANDUM AND ORDER Plaintiffs, V. JEAN-CLAUDE FRANCHITTI and VARTAN PIROUMIAM, Defendants. This matter comes before the Court on two motions: (1) Defendant Vartan Piroumiam’s (“Piroumiam”) Motion to Dismiss under the “‘first filed” rule and under Rule 12(b)(6), (ECF No. 3); and (2) Defendant Jean-Claude Franchitti’s (“Franchitti”) Motion to Dismiss under Rule 12(b)(2) for lack of personal jurisdiction, (ECF No. 4). The Court heard oral argument on May 23, 2022. Both motions are denied.

' Plaintiffs Cognizant Technology Solutions and Cognizant Technology Solutions U.S. Corporation filed a Motion to Substitute Party (Defendant Edward Cox) and a Motion to Remand. (ECF No. 12). However, these motions were withdrawn and Plaintiffs stipulated to Cox’s dismissal from the case. (ECF No. 31).

I. Plaintiffs Cognizant Technology Solutions and Cognizant Technology Solutions U.S. Corporation (together Plaintiff or “Cognizant’”) are together a business which “provides technology services to its corporate clients on an individual project basis, as many of its clients do not have in-house IT departments.” Franchitti v. Cognizant Tech. Sols., No. 17-6317, 2021 WL 3634161, at *1 (D.N.J. Aug. 17, 2021) (Sheridan, J.). Franchitti and Piroumiam are former employees of Cognizant. (Complaint (15, ECF No. 2). The relationship between Cognizant and the two defendants is highly acrimonious, and at present, the parties are involved in at least two other lawsuits. The two defendants in this case are plaintiffs in a putative class action discrimination case against Cognizant in the Central District of California, Palmer v. Cognizant Tech. Sols. Corp., No. 17-6848 (C.D. Cal. filed Sept. 18, 2017). Additionally, Franchitti is the relator in a qui tam action against Cognizant before this Court, Franchitti v. Cognizant Tech. Sols. Corp., No. 17-6317 (D.N.J. filed Aug. 22, 2017). Relevant to this litigation, Franchitti joined Cognizant in 2007 and Piroumiam joined Cognizant in 2012. (Complaint at [J16, 18). Franchitti and Piroumiam both left Cognizant between July 2016 and August 2017. (id.). Piroumiam signed a non-disclosure agreement (NDA), (id. at §25), while Franchitti signed an NDA which is “not identical” but has “substantially similar” terms, (id.

at (19). Both NDA’s prohibit the use or disclosure of “Confidential Information,” which has a similar definition under both N DA’s, broadly applying to documents and information related to Cognizant’s finances, business strategy, personnel, and customers. (/d. at ¥{20-28). Both require that Confidential Information be returned to Cognizant at the end of employment. (ECF No. 2 at 19-56). Both are governed by the laws of the State of New Jersey. (/d.); (Complaint at [922, 29). The agreement signed by Piroumiam included a forum selection clause designating a New Jersey state or federal court as forum for any litigation arising out of the NDA’s. (ECF No. 2 at 32, 47). The clause reads: All suits, proceedings and other actions relating to, arising out of or in connection with this Agreement will be submitted solely to the in person am jurisdiction of the United States District Court for the District of New Jersey (“Federal Court”) or to any court of general jurisdiction in the state of New Jersey if the Federal Court lacks jurisdiction to hear the matter. Employee hereby waives any claims against or objections to such in personam jurisdiction. (/d.). Franchitti’s agreement did not include a forum selection clause. (/d. at 52-

In addition, while employed by Cognizant, Franchitti and Piroumiam both received a “Handbook,” which provided they, “should not disclose any information

* On a motion to dismiss, the Court may consider a document that is integral to the complaint. See Bridges v. Torres, 809 Fed. App’x 69, 71 (3d Cir. 2020); Conceicao v. Nat’! Water Main Cleaning Co, 650 F. App'x 134, 135 (3d Cir. 2016).

that affects the business interests of Cognizant, including but not limited to information concerning the company or any client's businesses, discoveries, inventions, assets, financial data, nonpublic information, proprietary information, know-how, technology, the identity or activities of clients and vendors, internal procedures or other business information.” (Complaint at {33); (ECF No. 2 at 89). The Handbook also declared that “protecting” such information was the “responsibility” of Cognizant employees, (Complaint at 134); (ECF No. 2 at 89), and it required employees to return all company property at the end of employment, (Complaint at (35); (ECF No. 2 at 92). Likewise, Franchitti and Piroumiam both received a written “Code” of “Core Values and Standards of Business Conduct,” which required them to protect “Cognizant’s proprietary, competitively sensitive, and confidential information... .” (Complaint at 39, Ex. 5). Prior to leaving Cognizant between July 2016 and August 2017, both allegedly downloaded confidential documents and information. (Ud. at []40-43). Franchitti allegedly is in possession of the entirety of his email history from his time at Cognizant, comprising hundreds of thousands of emails and documents. (id. at J42). Piroumiam allegedly possesses 6,000 “Cognizant documents.” (Id. at

In August 2017, Franchitti commenced his qui tam action before this Court. Franchitti, No. 17-6317. In September 2017, the Central District of California litigation commenced. Palmer, No. 17-6848. Both cases are ongoing. Cognizant commenced this action against Franchitti and Piroumiam in J uly 202] in the Superior Court of New Jersey, Bergen County Vicinage. (ECF No. 1 It was removed to this Court on September 14, 2021, on the basis of diversity jurisdiction, 28 U.S.C. § 1332(a). (ECF No. 1-1). Cognizant brings claims for breach of contract and breach of fiduciary duty. (Complaint at {144-54). As relief, Cognizant seeks injunctions barring the Defendants from “taking any further action as it relates to the misappropriated information, documents, and assets owned by Cognizant and its clients” and “requiring Defendants to return any information, documents, and assets in their possession and that they retrieve any documents in the possession of others... .” (Complaint). Cognizant also seeks to disgorge the salaries it paid to Defendants. (Jd.). And in addition, Cognizant seeks punitive damages. (/d.). Defendants want the case dismissed; Piroumiam submits that the case should be dismissed under the first filed rule and for failure to state a claim, (ECF No. 6), while Franchitti challenges the Court’s personal Jurisdiction over him, (ECF No. 5).

II. Franchitti challenges the personal jurisdiction of the Court, arguing that he is a citizen of New York and does not have the requisite minimal contacts with New Jersey. Whether a court has jurisdiction to hear a case is a threshold question. Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 418 (3d Cir. 2010). “A federal court sitting in New Jersey has jurisdiction over parties to the extent provided under New Jersey state law. New Jersey’s long-arm statute provides for jurisdiction coextensive with the due process requirements of the United States Constitution.” Miller Yacht Sales, Inc. y. Smith, 384 F.3d 93, 96 (3d Cir. 2004) (internal citations omitted). A defendant may move to dismiss a complaint for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2).

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION v. FRANCHITTI, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cognizant-technology-solutions-corporation-v-franchitti-njd-2022.