Tabbert v. Howmedica Ostenonics Corp d/b/a Stryker Howmedica Osteonics
2:15-cv-00039
E.D. Wash.Oct 24, 2017Background
- Thomas Tabbert worked for Stryker/Howmedica from 1993 until resigning June 2014; he signed a 1995 unpaid non‑compete (choice‑of‑law: New Jersey) prohibiting competition or solicitation in his territory for one year after termination.
- Tabbert began working for Rocky Mountain Medical Distributors (RMMD) after resigning; RMMD distributed MicroPort products that compete with Howmedica and Tabbert’s RMMD territory overlapped his former Howmedica territory.
- Howmedica sued Tabbert for breach of the 1995 covenant after alleging he contacted several former surgeon clients and shared Stryker materials; Tabbert sued for religious discrimination and sought declaratory relief that the 1995 agreement is unenforceable.
- Tabbert asserted affirmative defenses: (1) the 1995 agreement lacked independent consideration under Washington law and thus was unenforceable, (2) a paid 2003 non‑compete superseded (novation) the 1995 agreement, and (3) estoppel based on representations that the non‑compete would not be enforced.
- Key factual disputes: whether a 2003 paid non‑compete was executed; whether Tabbert utilized confidential Stryker/Howmedica information or solicited surgeons in his former territory; whether Tabbert reasonably relied on any representation that the covenant would not be enforced.
- Procedural posture: Tabbert moved for summary judgment (declaratory relief, defense to breach claim, and estoppel). The court denied the motion, finding genuine issues of material fact and applicable law questions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of 1995 non‑compete (consideration) | 1995 agreement lacks independent consideration under Washington law and is therefore unenforceable | Choice‑of‑law clause selects New Jersey; under NJ law continued employment can be sufficient consideration (and additional consideration may exist) | Court enforces the New Jersey choice‑of‑law clause and rejects summary judgment for Tabbert on this ground (genuine dispute remains) |
| Whether 2003 paid non‑compete novated/superseded 1995 agreement | Tabbert: a 2003 paid non‑compete was executed and replaced the 1995 agreement (novation) | Howmedica: no executed 2003 agreement in file; disputes about audits and witness memory; no novation established | Genuine factual dispute as to existence/effect of 2003 agreement; summary judgment denied to Tabbert |
| Breach — use of confidential information and solicitation in former territory | Tabbert: Howmedica cannot prove he misused confidential info or entered his former territory to solicit | Howmedica: emails, shared PowerPoint, testimony, photo and witness emails show contacts with former surgeons and sharing of Stryker materials; territory overlap evidence | Court finds sufficient evidence raising genuine issues for trial on breach and denied summary judgment to Tabbert |
| Causation of damages (proximate cause) | Tabbert: even if breach occurred, Howmedica cannot show Tabbert caused the company's lost sales | Howmedica: temporal sales decline, damages expert report, and surgeon contacts support an inference of causation | Court finds Howmedica produced enough evidence to create a factual dispute on causation; summary judgment denied |
| Estoppel (representation not to enforce) | Tabbert: internal emails and manager statements showed Howmedica would not enforce the covenant; he relied on that | Howmedica: key email was internal and not communicated to Tabbert; Tabbert learned by July 2014 that the company intended enforcement, undermining reasonable reliance | Court holds genuine disputes on whether Tabbert had knowledge and reasonably relied; summary judgment denied |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burden allocation)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show genuine issue of material fact)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (evidence and inferences at summary judgment)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (federal courts apply forum state choice‑of‑law rules)
- Seizer v. Sessions, 940 P.2d 261 (Wash.) (most‑significant‑relationship test following Restatement (Second) of Conflict of Laws)
- Martindale v. Sandvik, Inc., 800 A.2d 872 (N.J.) (continued employment can be adequate consideration for non‑compete)
- Erwin v. Cotter Health Ctrs., 167 P.3d 1112 (Wash.) (three‑part test to disregard a contractual choice‑of‑law clause)
- Labriola v. Pollard Group, Inc., 100 P.3d 791 (Wash.) (Washington cases discussing consideration and enforceability of post‑employment covenants)