Environmental 360, Inc. v. Walker

CourtDistrict Court, M.D. Tennessee
DecidedJanuary 29, 2024
Docket3:22-cv-00606
StatusUnknown

This text of Environmental 360, Inc. v. Walker (Environmental 360, Inc. v. Walker) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Environmental 360, Inc. v. Walker, (M.D. Tenn. 2024).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

ENVIRONMENTAL 360, INC., ) ) Plaintiff, ) ) v. ) NO. 3:22-cv-00606 ) CLINTON WALKER ) ) Defendant. ) MEMORANDUM OPINION In an age where remote work has become increasingly common, this case presents a prescient question: does this Court have specific personal jurisdiction over an employee who accepts employment with a Tennessee corporation, remotely works for that corporation for several years, and then harms that corporation by allegedly violating the non-compete provision of his employment agreement? The Plaintiff, Environmental 360, Inc. (“E360”) brings this case against Defendant, Clinton Walker (“Walker”), to enforce the terms of his non-compete agreement with E360. For the reasons that follow, the Court finds that Walker cannot escape this Court’s jurisdiction simply because he resides out-of-state. Pending before the Court is Walker’s motion to dismiss for lack of personal jurisdiction. (Doc. No. 41). E360 responded to the motion (Doc. No. 43), and Walker replied. (Doc. No. 44). On January 12, 2024, Walker filed a Motion to Ascertain Status of his motion to dismiss. (Doc. No. 45). The motions are ripe for review. The Court will deny Walker’s motion to dismiss and will deny Walker’s “Motion to Ascertain Status” as moot. BACKGROUND The following allegations are taken from the Amended Complaint and its two exhibits (Doc. Nos. 14, 14-1, and 14-2) as well as the exhibits to Walker’s motion and E360’s response (Doc. Nos. 41-1, 41-2, 41-3, 41-4, 41-5, 43-1, and 43-2). On a motion to dismiss for lack of

personal jurisdiction, the Court may consider affidavits, discovery, or other evidence. Anwar v. Dow Chemical Co., 876 F.3d 841, 847 (6th Cir. 2017). “In our review of a plaintiff’s prima facie case, we consider pleadings and affidavits in a light most favorable to the plaintiff, without weighing the controverting assertions of the party seeking dismissal.” Id. (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)) (internal quotations omitted). E360 is a Tennessee corporation headquartered in Murfreesboro, Tennessee with only one office location, also in Murfreesboro. (Doc. No. 14 ¶¶ 1, 36(a)). Walker entered into an employment agreement with E360 in May 2015. (Id. ¶¶ 11). Around the same date, he signed an Agreement of Non-Compete and Non-Disclosure, (“Non-Compete Agreement”) promising that “[i]f [his] employment with the Company terminates for any reason, [he] shall not, for a period of

one year from the date of termination, have any business dealings whatsoever . . . with any customer or client of Company.” (Id. ¶ 12; Doc. No. 14-1 § 11). He also promised not to disclose any confidential information of E360 at any time, (id. § 4), and for a period of one year after his termination, not to “engage, directly or indirectly, or through any corporations or associates in any business, enterprise, or employment with any of those clients doing business with Company prior to the employment of [Walker] or during the time of employment.” (Id. § 6). The Non-Compete Agreement contains a choice of law provision stating that “[t]he Agreement shall be construed in accordance with the laws of the State of Tennessee.” (Id. § 12). It does not contain a forum selection clause. (See generally id.). Walker was employed by E360 for approximately seven years. During that time, he worked remotely, apparently from Florida. (See Doc. No. 14 ¶ 2). On at least 12 occasions totaling 29 days, Walker travelled to Tennessee for company meetings, trainings, and informal visits. (Doc. No. 41-1, Response to Interrogatory 1).

Walker resigned from his position at E360 on May 30, 2022. (Doc. No. 14 ¶ 21). E360 alleges that following his resignation, Walker reached out to and performed work for current clients of E360, began working for a competitor of E360 less than one month following his resignation, and solicited at least two E360 employees to join him at this competitor. (See id. ¶¶ 22-35). E360 further alleges that each of these activities violated Walker’s Non-Compete Agreement and that it was injured as a result. (Id. ¶¶ 41, 46, 51-54). DISCUSSION Walker argues that this Court does not have personal jurisdiction over him, and E360’s Complaint must be dismissed. (See generally Doc. Nos. 41-42). “When sitting in diversity, a federal court may exercise personal jurisdiction over an out-of-state defendant only if a court of the forum state could do so.” Sullivan, 79 F.4th at 660.1 Tennessee’s long-arm statute provides

that nonresidents of Tennessee are subject to jurisdiction in Tennessee on “[a]ny basis not inconsistent with the constitution of [Tennessee] or of the United States,” as well as for other specifically delineated reasons. Tenn. Stat. Ann. § 20-2-214. Tennessee’s Supreme Court

1 Here, the Non-Compete Agreement between E360 and Walker contains a provision stating that “[t]he Agreement shall be construed in accordance with the laws of the State of Tennessee.” (Doc. No. 14-1 § 12). Ordinarily, the Court would need to determine whether the choice of law provision is enforceable under Tennessee law, Wallace Hardware Co. v. Abrams, 223, F.3d 382, 391 (6th Cir. 2000), but since the Non-Compete Agreement applies the same state law as this Court’s forum, the Court need not determine whether that provision is valid under Tennessee law. Regardless of whether the Court applies the law of the state in this Court’s forum or the choice of law provision of the parties’ non-compete agreement, Tennessee law applies. recognizes that the “long-arm statutes expand the jurisdictional reach of Tennessee courts as far as constitutionally permissible.” Crouch Railway Consulting, LLC v. LS Energy Fabrication, LLC, 610 S.W.3d 460, 471 (Tenn. 2020) (quoting First Community Bank, N.A. v. First Tennessee Bank, N.A., 489 S.W.3d 369, 384 (Tenn. 2015)). “Tennessee’s appellate courts typically apply the

minimum contacts test of International Shoe, as elaborated by World–Wide Volkswagen and Burger King . . .” State v. NV Sumatra Tobacco Trading Co., 403 S.W.3d 726, 754-55 (Tenn. 2013). “Where a state’s long-arm statute extends to the limits of the Due Process Clause, the two inquiries merge, and the court need only determine whether exercising personal jurisdiction violates Conner’s due process rights.” Pearl Records, Inc. v. Connor, 2023 WL 351203, at *3 (M.D. Tenn. Jan. 20, 2023). A. Personal Jurisdiction Due Process Standard

The Due Process Clause requires that Walker have sufficient minimum contacts with Tennessee so that the Court’s exercise of personal jurisdiction over him does not offend traditional notions of fair play and substantial justice. See Conn v. Zakharov, 667 F.3d 705, 712 (6th Cir. 2012). See also Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). The Court must have general or specific personal jurisdiction over a defendant. Sullivan, 79 F.4th at 660. In this case, general personal jurisdiction, which requires a “defendant’s affiliations with a forum state are so

continuous and systematic as to render it essentially at home there,” Crouch, 610 S.W.3d at 472 n.11, does not apply.2

2 Walker’s motion argues that general personal jurisdiction does not apply here. (See Doc. No. 42 at 8-9).

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Bluebook (online)
Environmental 360, Inc. v. Walker, Counsel Stack Legal Research, https://law.counselstack.com/opinion/environmental-360-inc-v-walker-tnmd-2024.