O'Hara v. Globus Medical, Inc.

181 So. 3d 69, 2014 La.App. 1 Cir. 1436R, 2015 La. App. LEXIS 1560, 2015 WL 4754263
CourtLouisiana Court of Appeal
DecidedAugust 12, 2015
DocketNo. 2014 CW 1436R
StatusPublished
Cited by15 cases

This text of 181 So. 3d 69 (O'Hara v. Globus Medical, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'Hara v. Globus Medical, Inc., 181 So. 3d 69, 2014 La.App. 1 Cir. 1436R, 2015 La. App. LEXIS 1560, 2015 WL 4754263 (La. Ct. App. 2015).

Opinions

WELCH, J.

I ¿This writ application comes before us on remand from the Louisiana Supreme Court for briefing, argument and full opinion. The issue raised by the application is whether the trial court erred in denying the plaintiffs’ motion for partial summary judgment and in determining that Pennsylvania law, rather than Louisiana law, governed the plaintiffs’ No Competition, Non-Disclosure Agreements (“NCND agreements”). For reasons that follow, we reverse the judgment of the trial court, grant the plaintiffs’ motion for partial summary judgment, and remand this matter for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

The plaintiffs, Patrick O’Hara and Wallace Schaefer, filed a petition for declaratory judgment against the defendants, Glo-bus Medical, Inc. (“Globus”), a Delaware corporation that has its principal place of business in Pennsylvania, and Vortex Spine, LLC (“Vortex”); a Louisiana limited liability company. In the petition, the plaintiffs sought to have certain restrictive covenants declared unenforceable pursuant to La. R.S. 23:921.

According to the plaintiffs’, petition, they have made their living for several years in the field of medical equipment sales and related services in Louisiana. The plaintiffs alleged that they acted as sales representatives for Vortex (a distributor for Globus), which manufactures, distributes, and sells products and services for spinal surgery, but that they have never been employed by Globus.

[72]*72Aii exclusive distributor agreement (“EDA”) governed the relationship between Globus, Vortex, and Vortex’s principal, James Long; the plaintiffs are not parties to the EDA. The EDA was in effect from January 1, 2010, through April 18, 2014. The EDA describes the “Exclusive Distributor” status of Vortex as follows:

| ¿¡Company hereby 'grants to Distributor the exclusive right to sell in the Region described on Exhibit A attached hereto and made a part hereof, all Company products sold and distributed, including all surgical implants, instruments and associated accessories, and provision of services related thereto ... and Distributor hereby accepts such grant, all'subject to the conditions, limitations and provisions set forth in this Agreement. Initially, the Region shall consist of seven (7) Territories as described in Exhibit A.[1]

The EDA contains a section addressing confídentiality/no competition, which provides,, in part, that “neither Distributor [Vortex] nor any of its employees, agents, representatives, nor Principals ... shall, directly or indirectly, become ... a proprietor, stockholder, director, officer, employee, agent, representative or member of any .entity in the continental United States which is engaged in, the medical products business.” The EDÁ further provides that “the parties have expressly agreed that this Agreement, the parties’ performance hereunder[,] and the relationship between them shall be governed by, construed[,] and enforced in accordance with" the laws of the Commonwealth of Pennsylvania, without regard to the principles thereof regarding conflicts of laws.”

Mr. Schaefer executed an “Exclusive Distributor Representative No Competition and Non-Disclosure Agreement” with Vortex on July 25, 2011 (“Schaefer NCND Agreement”), although the .form agreement was supplied by Globus to Vortex pursuant to the EDA, Mr. Schaefer signed the agreement under the signatory line for “agent,” and Mr. Long signed under the signatory line for “Company.”2 This agreement contained the following “Acknowledgements”:

A. The Company is engaged in the sale of products and services for spine surgery (“Products”), ineluding the exclusive sale and distribution of products (“Globus Products”) for Globus Medical, Inc. | ¿(“Globus”) within a defined geographical territory (“Globus Territory”).
B. Agent performs sales and distribution services for and on behalf of the Company, either as a direct employee or through an independent service contract, including services in connection with the sales and distribution of Globus Products. .
C. For purposes of the NCND Agreement, Agent’s performance of services and receipt of compensation from the Company will be defined as the Agency Agreement (the “Agency Agreement”) between the Agent and the Company, whether or' not a written agreement exists between the Agent and the Compa[73]*73ny governing said services and compensation, •
D. For purposes ■of the NCND Agreement, the Agency Agreement Term (“Agency Agreement Term”) shall be defined as the time period during which-the Agent performs said sales and distribution services on behalf of the Company.
E.' For purposes of this NCND Agreement, the NCND Territory (“NCND Territory”) shall be defined as the geographic area assigned to the Agent within the most recent 12 months of the Agency Agreement Term. In the event that the Agent has been assigned certain accounts and not a geographic area, the NCND territory shall be defined as the geographic area within a 10-mile radius of each assigned account. In the event the Agent has not been assigned specific accounts or a specific geographic region, the NCND Territory shall be defined as the Globus Territory.
* * #
G. For purposes of the NCND Agreement, Medical Personnel (“Medical Personnel”) shall, be defined as orthopedic surgeons, neurosurgeons, physicians, nurses[,] and other, medical personnel involved in the implantation and other handling and usage , of the Products.
H. For purposes of this NCND Agreement, Hospitals (“Hospitals”) shall be defined as hospitals, surgery centers, medical centers[,] and other health care facilities that purchase Products .and the location at which Medical Personnel perform services related to the implantation and other implantation and other handling and usage of the Products.
I. Agent will have access to confidential, proprietary!,] and trade secret information (“Confidential Information”) belonging to the Company and/or to Glo-bus —
J.Agent will receive information and be trained in the highly technical, competitive!;,] and specialized -business of spine surgery and spinal implants and instrumentation.

| fjThe Schaefer NCND Agreement also contained a “No Competition & No Solici-tátion Covenant” providing as follows:

1.1 Competitive Activity. For purposes of this NCND Agreement, Competitive Activity (“Competitive Activity”) shall be defined, as participation in, performance of services for, employment by, ownership of any interest in, or assistance, promotion!,] or organization of, any person, partnership, corporation, firm, limited liability company, assoeiation[,] or other business entity that manufactures; sells, markets!,] or distributes products or services used in spine surgery (“Competing Company”)....
1.2 No Competition Period. For purposes of-this NCND Agreement, the No, Competition Period (“No Competition Period”) shall be defined as the time period encompassing both the Agency Agreement Term and the 12-month period immediately after the termination of the Agency Agreement.
1.3 No Competition or Solicitation Covenant.

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181 So. 3d 69, 2014 La.App. 1 Cir. 1436R, 2015 La. App. LEXIS 1560, 2015 WL 4754263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ohara-v-globus-medical-inc-lactapp-2015.