4:16-cv-11690
E.D. Mich.Mar 19, 2018Background
- Eric Grant began working for Johnson Electric North America, Inc. ("Johnson Electric") in 2013 and executed an employment agreement containing a 12‑month non‑compete. In 2014–2015 he accepted access to a company IP platform that included a user agreement with a 24‑month non‑compete and an express compensation formula.
- The IP Platform user agreement increased the non‑compete period to 24 months, broadened prohibited activities, and promised installment non‑competition compensation equal to average monthly salary × 24 months, but also contained a final sentence disclaiming entitlement to compensation.
- Grant alleges he clicked "agree," relied on the user agreement, complied with its terms after his February 1, 2016 termination, and seeks $315,825.36 for the 24‑month compensation.
- Johnson Electric says the pop‑up was China‑specific and did not apply to North America employees, that it had no record of who clicked "agree," and that JEMI (a Hong Kong parent) drafted and approved the user agreement.
- Johnson Electric declined to pay post‑termination compensation; Grant sued for breach and anticipatory breach. The parties filed cross motions for summary judgment.
- The district court denied both motions, finding material factual disputes about contract ambiguity, intent, and mutual assent that must be decided by a jury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the user‑agreement non‑compete unambiguously entitles Grant to 24 months of compensation | The clause plainly promises installment compensation equal to average monthly salary × 24; Grant accepted the agreement | The clause contains a final sentence disclaiming entitlement, so no enforceable obligation;/or agreement was not intended for Johnson Electric employees | The clause is internally irreconcilable/ambiguous; ambiguity requires submission to the jury (denied summary judgment) |
| Whether there was mutual assent/meeting of the minds between Grant and Johnson Electric | Johnson Electric "tendered" the agreement via the IP platform; it had a duty to know and therefore assented | Johnson Electric had no notice the user agreement would be presented to its North American employees and did not assent | Mutual assent is disputed; existence of a contract is a question for the jury (triable issue) |
| Whether the term "Company" in the user agreement refers to Johnson Electric or JEMI (parent) and whether the agreement applied only to Chinese employees | The agreement contains no geographic limitation; reads to bind employees generally | Agreement was China‑specific and intended for JEMI/Chinese employees; Johnson Electric did not adopt it | Whether the agreement applied to Grant is a factual question; triable issue remains |
| Whether the user agreement is an illusory promise | The promise is mandatory and specifies performance and payment terms | Defendant cites precedent that optional performance makes a promise illusory | Court found the language not plainly illusory on summary judgment; factual issues persist |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard) (evidence must create genuine dispute of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden allocation) (movant shows absence of genuine issue)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmovant must present evidence sufficient for a jury)
- Klapp v. United Ins. Group Agency, 468 Mich. 459 (contract ambiguity and resolving against drafter; ambiguous contracts are factual issues)
- Ford Motor Co. v. Kahne, 379 F. Supp. 2d 857 (E.D. Mich.) (contract interpretation focuses on parties' intent)