A Johnson & Johnson (NYSE:JNJ) subsidiary won a round in its lawsuit against a former sales rep who quit to work for rival Globus Medical (NYSE:GMED) when a Pennsylvania appeals court sent the case back down for reconsideration.
Synthes USA sued Globus and Peter Harrison for breach of contract in 2012, after Harrison quit to go to work for Globus. The lawsuit alleges that Harrison broke the confidentiality and non-compete clauses in his contract with Synthes by using confidential information from Synthes to lure customers to Globus. Harrison argues that a lawsuit he filed in California, where he worked for Synthes, supersedes the Pennsylvania case.
The Chester County Court of Common Pleas denied a Synthes bid for a preliminary injunction to prevent any further occurrence of the alleged contract violations.
But the Pennsylvania Superior Court ruled Dec. 24 that the lower court erred in its reading of Harrison’s contract with Synthes, which explicitly states that any legal disputes be heard in Pennsylvania, according to court documents.
"The phrase at issue is ‘Pennsylvania law.’ Immediately following that phrase is the clause ‘applicable to contracts entered into and performed in Pennsylvania.’ This clause plainly contains qualifying words that constitute a limitation," according to the documents "Thus, the phrase ‘Pennsylvania law’ is unequivocally qualified by the subsequent clause ‘applicable to contracts entered into and performed in Pennsylvania.’
"In sum, because the trial court misconstrued the restrictive clause, it erroneously held that the choice-of-law provision was applicable to contracts performed in Pennsylvania only. We disavow any interpretation requiring a determination of the actual place of performance. Moreover, the parties have not cited, and we have not discerned, any other indicia of meaning that would require us to disregard the sensible grammatical construction," according to the records. "In sum, because the trial court misapplied the law, we reverse the order below and remand for further proceedings."
The case is 1 in a raft of lawsuits between Synthes, which Johnson & Johnson acquired in 2012, and Globus over their respective sales forces. Synthes sued Globus in October 2013, accusing it and 3 former Texas sales reps of breach of contract. In July 2013, Synthes filed a breach of contract lawsuit against a pair of former sales reps who jumped ship for Sky Surgical, a Globus distributor. And in September 2013, Synthes leveled charges against 2 more former employees who quit to work for Peerless Surgical.
