Avery Dennison Corp. v. Juhasz, 924 F. Supp. 2d 893

Avery Dennison filed a Verified Complaint on January 21, 2013 seeking TRO, preliminary and permanent injunctive relief and damages against rpac International Corp. and Mark Juhasz for breach of contract, misappropriation of trade secrets, and tortious interference.
Juhasz, a former Avery Dennison employee, resigned December 7, 2012, after recently serving as Manager/Director in the Mass Segment division and signing the April 5, 2010 Employee Agreement containing confidentiality, non-competition, and non-solicitation provisions.
Juhasz joined rpac in January 2013 as Senior Director—Operations in an ostensibly non-customer-facing role, which Avery Dennison contends violates the non-compete and could involve use of confidential information.
The court granted TRO and expedited discovery, held a preliminary injunction hearing, and ultimately denied the preliminary injunction, dissolving the TRO.
Choice of law analysis concluded Ohio law governs the Employee Agreement, while California law governs misappropriation of trade secrets and tortious interference claims, with California as the place of injury for the tort claims; the court found insufficient likelihood of success on the merits.
The court applied the four-factor preliminary injunction standard but held that, given the lack of substantial likelihood of success on the merits, the injunction should be denied.

Issue	Plaintiff's Argument	Defendant's Argument	Held
What law governs the Employee Agreement?	Avery Dennison supports Ohio law.	Defendants contends California or Hong Kong law may apply to other claims.	Ohio law applies to the Employee Agreement.
What law governs misappropriation of trade secrets and related tort claims?	Ohio law governs misappropriation via UTSA; California would not apply.	California law applies to misappropriation and tortious interference.	California law applies to misappropriation and tort claims; place of injury supports California.
Did Juhasz breach the non-competition provision by joining rpac?	Joining rpac constitutes breach given he would provide similar services leveraging confidential information.	Juhasz’s role at rpac is non-customer-facing and not substantially similar to his Avery Dennison duties.	No substantial likelihood of breach; the inevitable disclosure doctrine does not apply.
Did Juhasz's actions amount to tortious interference with Avery Dennison's contract?	Interference occurred via hiring and directing breach of the Employee Agreement.	No breach of contract established; no tortious interference shown.	Not established; lack of breach undercuts tortious interference claim.
Should a preliminary injunction be issued?	Immediate relief is warranted to prevent irreparable harm from misappropriation and breach.	No likelihood of success on the merits and no irreparable harm shown with current evidence.	Preliminary injunction denied; TRO dissolved.

Salton, Inc. v. Philips Domestic Appliances and Personal Care B.V., 391 F.3d 871 (7th Cir. 2004) (place of injury controls misappropriation claims)
Procter & Gamble Co. v. Stoneham, 140 Ohio App.3d 260 (Ohio Ct. App. 2000) (unambiguous contract interpretation in non-compete context)
Morgan v. Biro Mfg. Co., Inc., 474 N.E.2d 289 (Ohio 1984) (Restatement §146 presumption; most significant relationship analysis)
Gries Sports Enters., Inc. v. Modell, 473 N.E.2d 810 (Ohio 1984) (Restatement §188 factors for choice-of-law analysis)
Whyte v. Schlage Lock Co., 101 Cal.App.4th 1443 (Cal. Ct. App. 2002) (California does not recognize inevitable disclosure doctrine)
Lam Research Corp. v. Deshmukh, 157 Fed.Appx. 26 (9th Cir. 2005) (appellate decision applying California law on misappropriation)
AccuImage Diagnostics Corp. v. Terarecon, Inc., 260 F.Supp.2d 941 (N.D. Cal. 2003) (California misappropriation standards; need for trade secret existence)
Basicomputer Corp. v. Scott, 973 F.2d 507 (6th Cir. 1992) (preliminary injunction four-factor framework; not all required)