NanoMech, Inc. v. Arunya Suresh
777 F.3d 1020
8th Cir.2015Background
- NanoMech (Delaware corp., principal place of business in Arkansas) hired Arunya Suresh in March 2010; Suresh signed a non-disclosure and an Arkansas‑law employment agreement containing a covenant not to compete.
- The covenant barred Suresh, during employment and for two years after termination, from working for or consulting with any business that competes with NanoMech (no geographic or activity-specific limits).
- While employed Suresh worked on NanoMech’s nanotechnology projects, including development of nGlide (subject to a pending patent).
- Suresh resigned in May 2012 alleging plans for full‑time doctoral study; she later accepted employment with BASF in 2013, a company NanoMech says competes with it.
- NanoMech sued for breach of the NDA and the noncompete and sought injunctive relief and damages; Suresh moved to dismiss (converted by the district court to a Rule 12(c) judgment‑on‑the‑pleadings motion).
- The district court granted judgment for Suresh, holding the noncompete unenforceable under Arkansas law as overbroad (no geographic limitation and a blanket ban on any competitive work worldwide).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court erred by treating Suresh's post‑answer Rule 12(b)(6) motion as a Rule 12(c) motion | NanoMech: conversion improper because pleadings were not closed and motion was untimely under Rule 12(b)(6) | Suresh: motion challenged only NanoMech’s claims (which were closed); conversion harmless because pleadings later closed before ruling | Court: any error was harmless; conversion to Rule 12(c) did not prejudice NanoMech and was acceptable |
| Whether the noncompete was enforceable under Arkansas law | NanoMech: broad protection is needed to safeguard trade secrets; worldwide scope reasonable because company competes globally | Suresh: agreement is overbroad — lacks geographic limit and bars any competitive employment in any capacity anywhere | Court: agreement unenforceable as written; blanket, worldwide ban without activity or customer limits is unreasonable under Arkansas law |
Key Cases Cited
- Bendinger v. Marshalltown Trowell Co., 994 S.W.2d 468 (Ark. 1999) (noncompete unenforceable when lacking geographic limitation)
- Optical Partners, Inc. v. Dang, 381 S.W.3d 46 (Ark. 2011) (reasonableness of restraints depends on case‑specific circumstances)
- Girard v. Rebsamen Ins. Co., 685 S.W.2d 526 (Ark. Ct. App. 1985) (upholding customer‑specific restriction without geographic limit)
- Freeman v. Brown Hiller, Inc., 281 S.W.3d 749 (Ark. Ct. App. 2008) (approving noncompete that narrowly prohibited solicitation of former customers)
- Victaulic Co. v. Tieman, 499 F.3d 227 (3d Cir. 2007) (noting that broad geographic limits may be reasonable in the Information Age)
- McIvor v. Credit Control Servs., Inc., 773 F.3d 909 (8th Cir. 2014) (standard for reviewing Rule 12(c) motions equals Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a plausible claim for relief)