Inventiv Health Communications, Inc. v. Rodden

[Cite as Inventiv Health Communications, Inc. v. Rodden, 2018-Ohio-945.]

woCOURT OF APPEALS
DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT

INVENTIV HEALTH COMMUNICATIONS, : JUDGES:
INC., : Hon. John W. Wise, P.J.
: Hon. Patricia A. Delaney, J.
Plaintiff - Appellant/ : Hon. Craig R. Baldwin, J.
Cross-Appellee :
: -vs-
:
JENNIFER RODDEN, : Case No. 17 CAE 09 0066
:
Defendant - Appellee/ : OPINION
Cross- Appellant

CHARACTER OF PROCEEDING: Appeal from the Delaware County
Court of Common Pleas, Case No.
17-CVH-04-0259

JUDGMENT: Affirmed in part, Reversed
and Remanded in part

DATE OF JUDGMENT: March 12, 2018

APPEARANCES:

For Plaintiff-Appellant/ Cross-Appellee For Defendant-Appellee/Cross- Appellant

ROBERT BOWES
Derek E. Diaz NICK A. NYKULAK
Hahn Loeser & Parks LLP AMILY A. IMBROGNO
200 Public Square, Suite 2800 Ross, Brittain & Schonberg
Cleveland, Ohio 44114 6480 Rockside Woods Blvd. South,
Suite 350
ELISE K. YARNELL Cleveland, Ohio 44131
Hahn Loeser & Parks LLP
65 East State St. Suite 1400
Columbus, Ohio 43215
Delaware County, Case No. 17 CAE 09 0066 2

Baldwin, J.

{¶1} Plaintiff-appellant inVentiv Health Communications, Inc. appeals from the

August 18, 2017 Judgment Entry of the Delaware County Court of Common Pleas

granting the Motion to Dismiss filed by defendant-appellee Jennifer Rodden. Defendant-

appellee Jennifer Rodden has filed a cross-appeal.

STATEMENT OF THE FACTS AND CASE

{¶2} Appellee Jennifer Rodden, a resident of North Carolina, began working in

April of 2010 as an administrative assistant for Addison Whitney, which is located in North

Carolina. Addison Whitney is a wholly-owned subsidiary of appellant inVentiv Health

Communications which is located in Ohio and has its principal place of business in Ohio.

According to appellant, the two companies are affiliates.

{¶3} On or about April 10, 20101, appellee signed an “Acknowledgement and

Agreement” that was attached to appellant’s “Code of Ethics and Business Conduct.”

Such form states, in relevant part, as follows:

I have read and I understand the foregoing inVentiv

Communications, Inc. Code of Ethics and Business Conduct dated May 28,

2009 (the “Code”) and by executing this Agreement, I hereby acknowledge

my agreement to comply with those obligations and responsibilities set forth

in the Code and to be bound by the Code as a condition of my continued

status as a[n]…employee of …inVentiv Communications Inc. or any of its

affiliates companies (collectively, the “Company”) [.]

1 The date that appellee signed the Acknowledgement and Agreement is unclear. It appears that she
signed it on either April 10, 2010 or April 12, 2010. The trial court found that she had signed the
agreement on April 12, 2010.
Delaware County, Case No. 17 CAE 09 0066 3

{¶4} The inVentiv Agreement specifically prohibits company representatives,

including all employees of appellant and its affiliates, from disclosing confidential

information, engaging in any fraud, theft or similar conduct, or engaging in any Restricted

Activity in the Restricted Area for two years following termination of employment with

appellant or its affiliates. The inVentiv Agreement defines “Restricted Activity” as follows:

[S]oliciting to provide or providing advertising, public relations,

branding, health outcomes, medical education, and/or any other marketing

or similar services offered by the Company to any person or entity which (a)

was a client of the Company at any time during the last twelve months in

which the Company Representative was employed with the Company, or

(b) was an Active Client Prospect of the Company (i.e. a person or entity

with whom there had been contact by someone at the Company within the

90-day period immediately preceding such termination of employment) at

the time of the Company Representative’s termination of employment with

the Company. For purposes hereof, the term “Restricted Area” means the

United State of America.

{¶5} The inVentiv Agreement also contains a forum selection clause providing

that it would be governed and construed in accordance with laws of the state of Ohio. The

forum selection clause further states as follows: “I hereby consent to the exclusive

jurisdiction and venue of any state or federal court in Ohio to consider any claims related

to the interpretation or enforcement of any provision of the Code or this Agreement or any

other related claims.” Additionally, the agreement further states, in relevant part, that
Delaware County, Case No. 17 CAE 09 0066 4

“[t]his instrument and the terms of the Code constitute the entire agreement between the

parties with respect to the subject matter hereof.”

{¶6} Appellee, on April, 12, 2010, also signed an “Employee Confidentiality and

Non-Compete Agreement” with Addison Whitney which included its subsidiaries or

affiliates, including appellant. Addison Whitney’s representative signed the same on April

14, 2010. Pursuant to the terms of the agreement, appellee agreed that she would not

directly or indirect compete with Addison Whitney for a period of one year after termination

of her employment. She further agreed that during her employment with Addison Whitney

and for one year following her termination, she would not:

Either on [her] behalf of any other person or entity, directly or

indirectly (a) hire, solicit or encourage or induce any employee, director,

consultant, contractor or subcontractor to leave the employ of Addison

Whitney, or (b) solicit, induce, encourage or entice away or divert any

person or entity which is then a customer of Addison Whitney and which

was a customer of Addison Whitney during the term of Employee’s

employment.

{¶7} While the Addison Whitney Agreement contains a North Carolina choice of

law clause, it does not contain a forum selection clause. The Addison Whitney Agreement

further provides that it represented the entire agreement between appellee and Addison

Whitney “with respect to the subject matter hereof, superseding all previous oral or written

communications, representations, understanding or agreement relating to this subject.”
Delaware County, Case No. 17 CAE 09 0066 5

{¶8} In January of 2017, appellee, who had been a Senior Project Manager for

Addison Whitney since 2014, resigned from Addison Whitney and, along with five other

Addison Whitney employees, contemplated forming a competing company.

{¶9} On January 30, 2017, Addison Whitney filed a complaint in North Carolina

against appellee and her former co-workers. On April 14, 2017, appellant filed a complaint

in Ohio against appellee, alleging that she had breached her contractual obligations to

appellant and had misappropriated appellant’s confidential and proprietary information.

Appellant sought injunctive relief. Appellant, on the same date, filed a Motion for

Temporary Restraining Order that was granted on the same day.

{¶10} Appellee, on April 26, 2017, filed a Motion to Dismiss pursuant to Civ.R.

12(B)(6) for failure to state a claim upon which relief could be granted and under the

doctrine of forum non conveniens. Appellant filed a memorandum in opposition to the

same on May 10, 2017 and appellee filed a reply on May 17, 2017.

{¶11} The trial court, as memorialized in a Judgment Entry filed on August 18,

2017, granted the Motion to Dismiss for failure to state a claim and dismissed appellant’s

complaint with prejudice. The trial court found that enforcement of the Ohio forum

selection clause in appellant’s agreement would be unreasonable and unjust.

{¶12} Appellant now appeals from the trial court’s August 18, 2017 Judgment

Entry raising the following assignments of error on appeal:

{¶13} I. THE TRIAL COURT ERRED IN HOLDING THAT THE FORUM

SELECTION CLAUSE IN THE PARTIES’ CONTRACT WAS UNENFORCEABLE.

{¶14} II. THE TRIAL COURT ERRED IN HOLDING THAT THE CHOICE-OF-LAW

PROVISION IN THE PARTIES’ CONTRACT WAS UNENFORCEABLE.
Delaware County, Case No. 17 CAE 09 0066 6

{¶15} III. THE TRIAL COURT ERRED BY DISMISSING INVENTIV’S

COMPLAINT WITH PREJUDICE DESPITE HOLDING ONLY THAT THE FORUM

SELECTION CLAUSE IN THE PARTIES’ CONTRACT WAS UNENFORCEABLE.

{¶16} Appellee has filed a cross-appeal raising the following assignments of error:

{¶17} I. THE TRIAL COURT ERRED IN HOLDING THAT INVENTIV’S CODE OF

ETHICS AND BUSINESS CONDUCT AGREEMENT WAS NOT SUPERSEDED BY

ADDISON WHITNEY’S EMPLOYEE CONFIDENTIALITY AND NON-COMPETE

AGREEMENT.

{¶18} II. THE TRIAL COURT ERRED IN RELEASING INVENTIV’S BOND

WITHOUT ALLOWING FOR A HEARING ON DAMAGES CAUSED BY A

WRONGFULLY GRANTED TEMPORARY RESTRAINING ORDER.

I, II

{¶19} Appellant, in its first assignment of error, argues that the trial court erred in

holding that the forum selection clause contained in the parties’ agreement was

unenforceable and in granting appellee’s Motion to Dismiss. In its second assignment of

error, appellant maintains that the trial court erred in holding that the choice of law

provision in the parties’ agreement was unenforceable.

{¶20} As an initial matter, we note that while appellee filed a Motion to Dismiss

pursuant to Civ.R. 12(B)(6), dismissal for lack of personal jurisdiction comes within the

purview of Civ.R. 12(B)(2). A trial court's determination of whether personal jurisdiction

over a party exists is a question of law, and appellate courts review questions of law under

a de novo standard of review. Information Leasing Corp. v. Jaskot, 151 Ohio App.3d 546,

2003-Ohio-566, 784 N.E.2d 1192 (1st Dist.). Moreover, we shall assume, arguendo, for
Delaware County, Case No. 17 CAE 09 0066 7

purposes of our analysis that the trial court did not err in holding that appellant’s

agreement with appellee was not superseded by the agreement that appellee signed with

Addison Whitney, as alleged by appellee.

{¶21} Generally, a court must undertake a two-step process in determining

whether a state court has personal jurisdiction over a non-resident defendant. Fraley v.

Estate of Oeding, 138 Ohio St.3d 250, 2014-Ohio-452, 6 N.E.3d 9, ¶ 12. The court must

first consider whether Ohio's long-arm statute, R.C. 2307.382, or the civil rules confer

jurisdiction. Id. If they do, the court must then consider whether asserting jurisdiction over

the non-resident defendant would deprive the defendant of the right to due process under

the law, as guaranteed by the Fourteenth Amendment to the U.S. Constitution. Id. To

satisfy due process, the defendant must maintain “certain minimum contacts with the

state so that the suit does not offend traditional notions of fair play and substantial justice.”

Clark v. Connor, 82 Ohio St.3d 309, 314, 1998-Ohio-385, 695 N.E.2d 751.

{¶22} However, a person or entity may consent to personal jurisdiction, thereby

waiving his her, or its due process rights. Kennecorp Mrge. Brokers, Inc., v. Country Club

Convalescent Hosp., Inc., 66 Ohio St.3d 173, 175–176, 610 N.E.2d 987 (1993). One way

litigants may consent to personal jurisdiction of a particular court system is through a valid

forum selection clause. See Id.

{¶23} In Ohio, it is well settled law that “[a]bsent evidence of fraud or overreaching,

a forum selection clause contained in a commercial contract between business entities is

valid and enforceable, unless it can be clearly shown that enforcement of the clause would

be unreasonable and unjust.” Kennecorp Mrge. Brokers, Inc., syllabus. In the case sub

judice, while appellant is a business entity, appellee, a former employee, is not. As noted
Delaware County, Case No. 17 CAE 09 0066 8

by the trial court, Ohio law regarding forum selection clauses in employment contracts is

not as settled. See IntraSee v. Ludwig, 9th Dist. Lorain Nos. 10CA009916, 11CA010024,

2012-Ohio-2684. In Zilbert v. Proficio Mortgage, Ventures, L.L.C., 8th Dist. No. 100299,

2014-Ohio-1838 at paragraph 32, the court stated that while it was “not advocating that

a forum selection clause in an employment contract should never be enforced, or freely

invalidated”, it found “that the type of contract can make a difference in determining

whether to uphold such a clause.”

{¶24} Under Ohio law, a forum selection clause is presumptively valid, and will be

enforced by the forum unless the party challenging the clause shows: (1) that the contract

was the result of fraud or overreaching; (2) that enforcement would violate the strong

public policy of the forum state; and (3) that enforcement under the particular

circumstances of the case would result in litigation in a jurisdiction so unreasonable,

difficult and inconvenient that the challenger would for all practical purposes be deprived

of his day in court. Barrett v. Picker Int'l, Inc., 68 Ohio App.3d 820, 824, 589 N.E .2d 1372

(8th Dist. 1990).

{¶25} Appellee never argued, and the trial court never found, that the contract was

the result of fraud. Rather, appellee asserts that the contract was the result of

overreaching. “Overreaching is defined as the act or an instance of taking unfair

commercial advantage of another.” (Internal citations omitted.) Buckeye Check Cashing

of Arizona, Inc. v. Lang, S.D.Ohio No. 2:06–CV–792, 2007 WL 641824, *5 (Feb. 23,

2007). “The unequal bargaining power of the parties or lack of ability to negotiate over the

clause cannot, in itself, support a finding of overreaching.” Id., citing Carnival Cruise

Lines, Inc. v. Shute, 499 U.S. 585, 593, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991).
Delaware County, Case No. 17 CAE 09 0066 9

“However, overreaching may be found if the disparity in bargaining power was used to

take unfair advantage.” Id., citing United Rentals, Inc. v. Pruett, 296 F.Supp.2d 220, 227

(D.Conn.2003).

{¶26} The trial court, in the case sub judice, found that appellant had engaged in

overreaching. When appellee was initially hired in April of 2010, she was hired as an

administrative assistant and was not, as noted by the trial court, in a position of equal

bargaining power with either appellant or Addison Whitney, both commercial entities. The

inVentiv Agreement and the Addison Whitney Agreement both prohibited appellee from

the same conduct. Under both agreements, appellee was prohibited from using or

disclosing either appellant’s or Addison Whitney’s confidential information and from

soliciting or providing specified services to any of appellant’s or Addison Whitney’s clients.

While Addison Whitney has filed suit against appellee in North Carolina, appellant shortly

thereafter filed suit against her in Ohio under the forum selection clause for the same

alleged conduct said to have breached separate agreements, forcing her to retain counsel

and defend herself in two different jurisdictions. We concur with the trial court that

appellant thus has been able to take unfair advantage of appellee. This factor weighs in

favor of nonenforcement.

{¶27} The next issue for determination is whether or not enforcement of the forum

selection clause would violate the strong public policy of the forum state. The inVentiv

Agreement signed by appellee contains a forum selection clause providing that it would

be governed and construed in accordance with laws of the state of Ohio and that Ohio

had exclusive jurisdiction. Thus, Ohio is the forum state. “Ohio recognizes the validity of

forum selection clauses, and enforcement of the clause would not violate the public policy
Delaware County, Case No. 17 CAE 09 0066 10

of Ohio. Thus, this factor does not weigh in favor of nonenforcement.” Zilbert at paragraph

24.

{¶28} The trial court, with respect to the third part of the test set forth in the Barrett

case, found that enforcement of the forum selection clause in the inVentiv Agreement

would be unreasonable and unjust. Appellee has the burden of establishing that it would

be unreasonable or unjust to enforce the forum selection clause. Zilbert, supra.at

paragraph 25. A finding of unreasonableness or injustice must be based on more than

inconvenience to the party seeking to avoid the forum selection clauses' requirements.

Id. Thus, “mere distance, mere expense, or mere hardship to an individual litigant is

insufficient to invalidate a forum selection clause”. Salehpour v. Just A Buck Licensing,

Inc., 12th Dist. Warren No. CA2013–03–028, 2013–Ohio–4436, citing IntraSee, Inc. v.

Ludwig, 9th Dist. Lorain Nos. 10CA009916 and 11CA010024, 2012–Ohio–2684, ¶ 20.

Rather, the trial court must find that enforcement of the clause would be manifestly and

gravely inconvenient to the party seeking to avoid enforcement such that it will effectively

be deprived of a meaningful day in court. Info. Leasing Corp. v. Jaskot, 151 Ohio App.3d

546, 552, 2003–Ohio–566, 784 N.E.2d 1192 (1st Dist.).

{¶29} In determining whether the selected forum is sufficiently unreasonable,

Ohio courts consider the following factors: (1) which law controls the contractual dispute;

(2) the residency of the parties; (3) where the contract was executed; (4) where the

witnesses and parties to the litigation are located; and (5) whether the forum clause's

designated location is inconvenient to the parties. Original Pizza Pan v. CWC Sports

Group, Inc., 194 Ohio App.3d 50, 2011–Ohio–1684, 954 N.E.2d 1220 (8th Dist.), citing

Barrett, supra at 85.
Delaware County, Case No. 17 CAE 09 0066 11

{¶30} The inVentiv Agreement contains a choice of law provision that provides

that the agreement would be governed and construed in accordance with Ohio law. In

determining whether a choice-of-law provision is enforceable, the following standard

applies:

The law of the state chosen by the parties to govern their contractual

rights and duties will be applied unless either the chosen state has no

substantial relationship to the parties or the transaction and there is no other

reasonable basis for the parties' choice, or application of the law of the

chosen state would be contrary to the fundamental policy of a state having

a greater material interest in the issue than the chosen state and such state

would be the state of the applicable law in the absence of a choice by the

parties. (Emphasis added).

{¶31} Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co., 6 Ohio

St.3d 436, 453 N.E.2d 683, syllabus (1983).

{¶32} Appellant, which is incorporated in Ohio and has its principal place of

business in Ohio, clearly has a substantial relationship to Ohio. Thus, we must determine

whether application of the law of Ohio would be contrary to the fundamental policy of a

state having a greater material interest in the issue than the chosen state and such state

would be the state of the applicable law in the absence of a choice by the parties.

{¶33} We find that North Carolina has a significant interest in the issues in this

case. Appellee is a resident of North Carolina, she signed the inVentiv Agreement in North

Carolina, and her alleged breach of the agreement occurred in North Carolina.
Delaware County, Case No. 17 CAE 09 0066 12

{¶34} Assuming, arguendo, that North Carolina has a “greater material interest”

in the issue than Ohio, we must determine whether or not application of Ohio law would

be contrary to the fundamental policy of North Carolina. We concur with appellant that we

must look to the substantive law of Ohio and the substantive law of North Carolina with

respect to the validity of confidentiality and noncompetition agreements. See, for

example, Century Business Servs. v. Barton, 197 Ohio App.3d 352, 2011–Ohio–5917,

967 N.E.2d 782 (8th Dist.). “[I]n North Carolina, restrictive covenants between an

employer and employee are valid and enforceable if they are (1) in writing; (2) made part

of a contract of employment; (3) based on valuable consideration; (4) reasonable both as

to time and territory; and (5) not against public policy.” United Laboratories, Inc. v.

Kuykendall, 322 N.C. 643, 649–50, 370 S.E.2d 375, 380 (1988). Under Ohio law,

restrictive covenants not to compete are reasonable if the restriction or restraint imposed

is (1) no greater than that necessary for the protection of the employer, (2) does not place

an undue hardship on the employee, and (3) is not injurious to the public. Raimonde v.

Van Vlerah, 42 Ohio St.2d 21, 325 N.E.2d 544, paragraphs one and two of the syllabus

(1975). We find that application of the substantive law of Ohio would not violate the

fundamental public policy of North Carolina and that the choice of law provision should

not be disregarded.

{¶35} With respect to the other factors, we note that while appellee resides in

North Carolina, appellant is incorporated in Ohio and has its principal place of business

there. The contract was executed by appellee in North Carolina and many of the

witnesses are located there. The five other defendants in the North Carolina case, who

would be relevant witnesses in the case sub judice, all reside in North Carolina. The final
Delaware County, Case No. 17 CAE 09 0066 13

factor set forth in Barrett requires this Court to determine whether or not Ohio is

inconvenient to the parties. We agree with the trial court that this factor weighs heavily in

favor of appellee under the unique facts of this case. In the case sub judice, appellee,

who was at the time an administrative assistant, signed an agreement with appellant and

also one with Addison Whitney. Both prohibited appellee from disclosing either’s

confidential information and prohibited appellee from soliciting clients of either. As stated

by the trial court in finding that enforcement of appellant’s forum selection clause would

be inconvenient to the parties:

Rodden [appellee] had no way to know whether she would be forced

to defend an alleged breach in Ohio or North Carolina or whether Ohio or

North Carolina law would apply. By simultaneously suing Rodden in both

Ohio and North Carolina for the same alleged conduct, Rodden has been

forced to retain separate counsel and conduct separate discovery in each

jurisdiction. Additionally, all of Rodden’s alleged acts occurred in North

Carolina, and most if not all of the potential witnesses reside in North

Carolina. My concerns are compounded by the fact that Rodden – hired

initially as an at-will administrative assistant – held little bargaining power

over the inVentiv Agreement’s forum-selection clause.

{¶36} Based on the foregoing, we find that the trial court did not err in holding the

forum selection and choice of law clauses to be unenforceable.

{¶37} Appellant’s first and second assignments of error are, therefore, overruled.
Delaware County, Case No. 17 CAE 09 0066 14

III

{¶38} Appellant, in its third assignment of error, contends that the trial court erred

in dismissing its complaint with prejudice.

{¶39} The trial court, in its August 18, 2017 Judgment Entry, found that the forum

selection clause was unenforceable and that, therefore, there was no personal jurisdiction

over appellee. The trial court dismissed the complaint with prejudice.

{¶40} Civ.R. 41(B)(4) clearly states that a dismissal for lack of jurisdiction is a

“failure otherwise than on the merits.” “A successful motion [to dismiss for lack of personal

jurisdiction] will normally result in an order dismissing the action, but should not prejudice

the plaintiff's action on the merits ….”. Jurko v. Jobs Europe Agency, 43 Ohio App.2d 79,

88, 334 N.E.2d 478 (8th Dist. 1975).

{¶41} We find that the trial court erred in dismissing the complaint with prejudice.

{¶42} Appellant’s third assignment of error is, therefore, sustained.

CROSS-APPEAL

I

{¶43} Appellee, in her first assignment of error in her cross-appeal, argues that

the trial court erred in holding that appellant’s Code of Ethics and Business Conduct

Agreement was not superseded by Addison Whitney’s Employee Confidentiality and Non-

Compete Agreement.

{¶44} Based on our disposition of appellant’s first and second assignments of

error, appellee’s first assignment of error is moot.
Delaware County, Case No. 17 CAE 09 0066 15

II

{¶45} Appellee, in her second assignment of error, argues that the trial court erred

in releasing appellant’s bond without allowing a hearing on damages caused by a

wrongfully granted temporary restraining order.

{¶46} On April 14, 2017, appellant filed a Motion for Temporary Restraining Order

and Preliminary Injunction. On the same date, the trial court issued a Temporary

Restraining Order pending oral argument on the preliminary injunction. The trial court

ordered that appellant post a bond in the amount of $20,000.00. The bond was posted on

April 17, 2017. The hearing on the preliminary injunction was postponed until after the

trial court ruled on appellee’s Motion to Dismiss. Because the trial court, pursuant to a

Judgment Entry filed on August 18, 2017, granted the Motion to Dismiss, the hearing was

never held. The trial court, in its August 18, 2017 Judgment Entry, vacated the April 14,

2017 Judgment Entry and stated that appellant could withdraw its $20,000.00 bond.

{¶47} In the case sub judice, there is no indication in the record that the bond has

been released or that appellee has requested a hearing to recover damages on the bond

placed with the court. We concur with appellant that, therefore, such issue is not ripe. It

is well established that an appellate court will not rule on questions not considered by a

trial court. Ochsmann v. Great Am. Ins. Co., Franklin App. No. 02AP-1265, 2003-Ohio-

4679 at paragraph 21, citing Mills-Jennings, Inc. v. Dept. of Liquor Control, 70 Ohio St.2d

95, 99, 435 N.E.2d 407 (1982). Thus, we decline to address this argument for the first

time on appeal.

{¶48} Appellee’s second assignment of error is, therefore, overruled.
Delaware County, Case No. 17 CAE 09 0066 16

{¶49} Accordingly, the judgment of the Delaware County Court of Common Pleas

is affirmed in part and reversed in part. This matter is remanded to the trial court for the

limited purpose of entering a dismissal without prejudice.

By: Baldwin, J.

John Wise, P.J. and

Delaney, J. concur.