The U.S. District Court for the Western District of Pennsylvania recently ruled that a forum-selection clause in a former employee’s non-compete agreement may bind their new employer for purposes of establishing personal jurisdiction.

Matthews International Corporation (“Matthews”), a manufacturer of cremation furnaces, filed an action in the Western District of Pennsylvania against former employees and two competitors, Implant Recycling, LLC (“Implant”) and IR Environmental Solutions, Inc. (“IR Environmental”), alleging misappropriation of trade secrets and unfair competition. According to Matthews’s complaint, its former employees saved confidential company information and trade secrets on their personal USB drives and emailed company files to themselves before leaving Matthews to join Implant or IR Environmental. These former employees were subject to non-competition agreements that required them to submit to personal jurisdiction in the Allegheny County Court of Common Pleas or the Western District of Pennsylvania.

Implant and IR Environmental, both headquartered in Michigan, moved to dismiss Matthews’s complaint for lack of personal jurisdiction. Implant and IR Environmental allegedly have a history of hiring former Matthews employees, and Matthews informed them on multiple occasions that these employees were subject to non-competition agreements. In one instance, Matthews’s outside counsel allegedly sent a copy of one of these agreements to Implant and IR Environmental, which included the same forum selection clause at issue in this case.

The court denied Implant and IR Environmental’s motion to dismiss. While noting that general jurisdiction was lacking, the court held that “[w]here, as here, a former employee is bound by a restrictive covenant with a forum-selection clause, the clause may apply to the new employer who can foresee the forum-selection clause being an issue, but still moves forward with hiring.”

They key determination as to whether Implant and IR Environmental could be subject to personal jurisdiction was whether “application of the forum selection clause was reasonably foreseeable.” Implant and IR Environmental argued that they did not know about the individual defendants specifically were subject to non-competition agreements before hiring them, and thus, it was not foreseeable that they could be haled to defend suit in the Western District of Pennsylvania. Nonetheless, the court found that “[e]ven if Implant and IR Environmental were not 100% certain that [the individual defendants] had non-competition agreements with Matthews, it was foreseeable that they would have such agreements.” The court noted that Implant and IR Environmental were aware that other former Matthews employees they previously hired were subject to non-competition agreements, and found that this was a sufficient evidentiary basis to conclude that “it was foreseeable to Implant and IR Environmental that they would be bound by the forum-selection clauses.”

The case is Matthews International Corporation v. Lombardi, et al., Case No. 2:20-cv-00089-NR in the U.S. District Court for the Western District of Pennsylvania.

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Photo of Emily Tucker Emily Tucker

Emily Tucker represents clients in a wide range of product liability matters, including in multidistrict litigation and class actions. Her work encompasses pharmaceutical and medical device matters impacting all members of the pharmaceutical supply chain, as well as counseling automotive and rail industry

Emily Tucker represents clients in a wide range of product liability matters, including in multidistrict litigation and class actions. Her work encompasses pharmaceutical and medical device matters impacting all members of the pharmaceutical supply chain, as well as counseling automotive and rail industry clients through litigation and related appeals. Emily regularly applies her scientific background to her legal work, finding that her technical acumen provides a valuable perspective for matters and research involving technology, biology, and chemistry.

Emily’s maintains an active  pro bono practice, with a focus on landlord-tenant disputes.

Emily received her J.D., magna cum laude, from William & Mary Law School. While there, she was awarded the ABA/BNA Award for Excellence in the Study of Intellectual Property Law, and she served as the director of outreach for the Student Intellectual Property Society. Emily received her B.S., magna cum laude, in chemical and biomolecular engineering from the Georgia Institute of Technology

Photo of Molly A. Jones Molly A. Jones

Molly A. Jones is an Intellectual Property and Litigation counsel in Crowell & Moring’s San Francisco office. Her practice emphasizes patent, trademark, technology licensing, and other commercial disputes in a range of industries including software, biotechnology, commercial real estate, education, health care, and…

Molly A. Jones is an Intellectual Property and Litigation counsel in Crowell & Moring’s San Francisco office. Her practice emphasizes patent, trademark, technology licensing, and other commercial disputes in a range of industries including software, biotechnology, commercial real estate, education, health care, and food and beverage. She has represented clients in matters in the Northern, Eastern, and Southern Districts of California, Eastern District of Texas, and California state courts. Molly has also second-chaired a trademark infringement trial in the Western District of Texas.

Molly earned her J.D., cum laude, from the University of California, Hastings College of the Law, where she was the executive symposium editor of the Hastings Law Journal and co-authored amicus curiae briefs in two landmark patent cases at the U.S. Supreme Court. While attending law school, Molly also externed at the Northern District of California and studied abroad at Sungkyunkwan University in Seoul, South Korea.