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Grant v. Johnson Electric North America, Inc.

United States District Court, E.D. Michigan, Southern Division

March 19, 2018

ERIC GRANT, Plaintiff,
v.
JOHNSON ELECTRIC NORTH AMERICA, INC., Defendant.

          OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (ECF NO. 34) AND DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (ECF NO. 35)

          LINDA V. PARKER U.S. DISTRICT JUDGE

         Plaintiff Eric Grant (“Plaintiff”) filed this lawsuit alleging that Defendant Johnson Electric North America, Inc. (“Johnson Electric”) breached its non-compete agreement, whereby Defendant would compensate Plaintiff for a non-compete period of twenty-four months. Presently before the Court are the parties' cross motions for summary judgment, filed May 8, 2017 and May 12, 2017. (ECF Nos. 34 & 35.) The motions have been fully briefed. For the reasons set out below, the Court denies the motions for summary judgment.

         I. Factual and Procedural Background

         Johnson Electric is a provider of motion subsystems and components for automotive, industrial and medical applications, based in North America with an operating facility in Plymouth, MI. (ECF No. 35 at Pg ID 392.) Johnson Electric is a subsidiary of Johnson Electric Manufactory, Inc. (“JEMI”), which is based in Hong Kong. (Id.)

         Subject to an employment agreement, Plaintiff began working for Johnson Electric on October 1, 2013 as an Engineer Expert ETM. (ECF No. 1 at Pg ID 2-3.) The employee agreement included a non-compete clause. The non-compete provided the following:

You shall not so as to directly compete with any subsidiary entities within the Company during the period of 12 months after the date of termination of your employment, carry on or be directly or indirectly engaged or concerned or interested whether as principal, agent shareholder, investor, director, employee or otherwise, in any business or activity carried on by subsidiary entities within the Company as at, or during the 12 month period immediately prior to, the date of termination of your employment, in which business or activity you were directly concerned in the course of your employment as at, or during the 12 month period immediately prior to, the said date of voluntary termination of employment.

(ECF No. 35 at Pg ID 393.)

         On June 27, 2014, Plaintiff and Johnson Electric entered into a new employment agreement for additional duties and responsibilities with increased pay. (ECF No. at Pg ID 3.) On January 23, 2015, Eric Li, IP counsel for JEMI, notified Johnson Electric employees of the launch of the Intellectual Property Management (“IP Platform”) that Johnson Electric employees would use to submit, track, and manage Johnson Electric's intellectual property. (ECF No. 35-3 at Pg ID 624; ECF No. 1 at Pg ID 3; ECF No. 45 at Pg ID 1331.) Prior to the launch, the engineers emailed their invention ideas to a designated JEMI employee in Hong Kong. (ECF No. 34 at Pg ID 247.) In order to access the new system, the user had to “agree” to the terms of the user agreement, which appeared as a pop-up screen. Plaintiff alleged he first accessed the IP Platform in early 2015, sometime after entering into his new employment agreement. (ECF No. 34-5 at Pg ID 319-20.) Plaintiff testified that upon seeing the user agreement, he decided to discuss the terms with his wife later that night before accepting. (ECF No. 34-5 at Pg ID 320.) Plaintiff stated he accepted the user agreement the following day. (Id.)

         The user agreement included a non-compete clause that provided a non-compete period of twenty-four months, expanded the scope of prohibited activities and increased the amount of damages for breach of the non-compete agreement. (ECF No. 1 at Pg ID 3.) It also provided a compensation provision, requiring Johnson Electric to provide Plaintiff with monthly compensation during the twenty-four month period at an amount equal to Plaintiff's average monthly salary during the twenty-four months prior to his termination. (Id.) According to Plaintiff, this non-compete clause constituted a binding agreement between Plaintiff and Johnson Electric.

         Stephen Nelson, Johnson Electric's Senior Engineer Manager and designated Rule 30(b)(6) representative, testified that when he first saw the prompt he took a copy to Ella Guidulgi, former human resource representative, because he was concerned with the language. (ECF No. 35 at Pg ID 250.) However, she was not familiar with the agreement so Mr. Nelson disregarded it and assumed the user agreement did not apply to Johnson Electric employees. (Id.)

         Plaintiff's employment relationship with Johnson Electric ended on February 1, 2016, but Plaintiff refused to sign the separation agreement because it varied materially from the non-compete clause in the user agreement. (ECF No. 35 at 400.) Specifically, it did not state that Johnson Electric would owe Plaintiff any compensation for the twenty-four month period following his termination. (Id.) On February 18, 2016, after corresponding with Plaintiff, Human Resource Manager Jillian Czlapinski forwarded Plaintiff an email stating the pop-up associated with the IP Platform was China specific and did not apply to Johnson Electric's North America employees. (Id.)

         Although Plaintiff complied with the terms of the non-compete clause, Johnson Electric has not made any payments to Plaintiff and stated it does not intend to make any future payments. To support its position, Johnson Electric alleges it has no record of who clicked “agree” or “disagree” when presented with the prompt because it did not intend Johnson Electric employees to access it. (ECF No. 35-3 at Pg ID 590-91.) Further, Johnson Electric argues Li drafted the agreement and Billy Ng, Senior Legal Counsel for JEMI, approved it. (ECF No. 35 at 396.) Johnson Electric contends it did not know the non-compete clause would be presented to its employees.

         On May 11, 2016, Plaintiff initiated this action for breach and anticipatory breach of the non-compete agreement. Plaintiff claims he is entitled to $315, 825.36 in damages, which represents Plaintiff's average monthly salary of $13, 159.39 for a twenty-four month period, February 2014 through February 2016. The parties filed cross motions for summary judgment on May 8, 2017 and May 12, 2017. (ECF Nos. 34 & 35.) The motions have been fully briefed. For the reason stated below, the Court denies the parties' cross motions.

         II. ...


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