DePuy Synthes Sales, Inc. v. Globus Medical, Inc.
259 F. Supp. 3d 225
| E.D. Pa. | 2017Background
- DePuy Synthes (plaintiff) is a medical-device company whose sales consultants develop customer relationships, receive specialized training, and sign employment agreements with non‑compete/non‑solicit and confidentiality obligations plus a two‑week notice/transition requirement.
- Globus Medical (defendant) is a direct competitor with a prior history of litigation and settlements with DePuy concerning employee poaching and alleged misuse of confidential information.
- Three former DePuy sales consultants (Foley, Leary, Valeri) resigned in early February 2017 and promptly began working for Globus; DePuy alleges they breached contractual obligations and solicited customers and converted cases to Globus.
- DePuy sued asserting: breach of fiduciary duty/duty of loyalty; breach of contract; aiding and abetting breach of fiduciary duty; tortious interference (with customers and with employee contracts); unfair competition; and civil conspiracy. DePuy sought injunctive relief and damages.
- Defendants moved to dismiss under Rule 12(b)(6). The court applied Twombly/Iqbal pleading standards and Pennsylvania’s "gist of the action" doctrine to determine which tort claims were precluded by the contracts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of fiduciary duty/duty of loyalty survives where duties overlap with employment agreements | DePuy: consultants owed fiduciary/loyalty duties independent of contracts because of confidential relationship and access to trade secrets | Defendants: duties arise from the employment agreements; tort claim is duplicative and barred by gist of the action doctrine | Dismissed (gist of the action bars the fiduciary claim) |
| Whether breach of contract was adequately pleaded (specific acts of solicitation/use of confidential info) | DePuy: alleged resignations, continued access to confidential info, conversions of cases to Globus, and employment by competitor plausibly allege breaches (some facts pled on information and belief) | Defendants: allegations are conclusory, speculative, lacking specific customer IDs or proof of causation | Survived (court finds facts, including information‑and‑belief allegations, sufficient at pleading stage) |
| Whether aiding-and-abetting breach of fiduciary duty stands when underlying fiduciary claim is dismissed | DePuy: alleges Globus knowingly assisted breaches | Defendants: underlying fiduciary claim fails, so aiding/abetting cannot stand | Dismissed with prejudice (dependent on underlying claim) |
| Whether tortious interference and unfair competition survive against Globus (and/or the sales consultants) | DePuy: Globus intentionally induced breaches and converted business; competitor privilege doesn't shield hires when it induces violation of noncompete/non‑solicit | Defendants: competitor privilege permits solicitation of at‑will employees; allegations insufficient | Against sales consultants: tortious interference with customers and unfair competition dismissed (barred by gist). Against Globus: tortious interference with employee contracts and unfair competition survive (plausible allegations that Globus knew of and induced breaches) |
| Whether civil conspiracy is adequately pleaded (malice/intent to injure) | DePuy: defendants acted in concert to divert business for Globus' benefit | Defendants: allegations show business motive; no sole intent to injure; pleading insufficient | Dismissed (court finds complaint shows defendants acted to benefit themselves, defeating required malice) |
Key Cases Cited
- Bruno v. Erie Ins. Co., 106 A.3d 48 (Pa. 2014) (articulates Pennsylvania "gist of the action" doctrine distinguishing contract claims from independent torts)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading requires plausibility, not labels and conclusions)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (courts must "peel away" conclusory allegations and accept plausible factual allegations)
- Bistrian v. Levi, 696 F.3d 352 (3d Cir. 2012) (three‑step framework for evaluating Twombly/Iqbal challenges)
- Brown & Brown, Inc. v. Cola, 745 F. Supp. 2d 588 (E.D. Pa. 2010) (breach of fiduciary duty claims barred where duties merely restate contractual obligations)
- Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199 (3d Cir. 2009) (discusses Restatement § 768 and the business‑competitors privilege in tortious‑interference context)