United States District Court, W.D. Virginia, Harrisonburg Division
Michael F. Urbanski Chief United States District Judge.
matter comes before the court on defendant's Motion to
Dismiss, ECF No. 8, in which defendant requests that the
court dismiss plaintiffs Complaint for Declaratory Judgment
and Injunctive Relief (the "Complaint" or
"Compl."), ECF No. 1, under Federal Rules of Civil
Procedure 12(b)(1) for lack of subject matter jurisdiction
and 12(b)(6) for failure to state a claim. For the reasons
set forth below, the court will DENY the
motion to dismiss.
O'Sullivan Films ("O'Sullivan") is a
national manufacturer of plastic film products, including
artificial leather products. O'Sullivan develops and
manufactures artificial leather products for multiple
automotive manufacturers, including current and prospective
clients General Motors, Fiat Chrysler Automobiles, Ford,
Tesla, and Daimler. These manufacturers use
O'Sullivan's artificial leather products for the
fabrication of automobile interior parts and seating.
David Neaves ("Neaves") worked as New Product
Development Chemist at O'Sullivan's Winchester,
Virginia artificial leather plant from June 2013 through
December 2016. Neaves played a central role in the
development of O'Sullivan's artificial leather
products and, in his position, received extensive proprietary
training with O'Sullivan's parent company. Neaves had
responsibility over O'Sullivan's artificial leather
group, with a number of junior artificial leather research
and development employees reporting to him. In his position,
Neaves also worked closely with O'Sullivan's current
and prospective clients.
of his employment with O'Sullivan, Neaves signed a
Confidential Information, Invention, and Non-Solicitation
Agreement (the "NSA"), ECF No. 1 Ex. 1. The NSA
contained a confidential information provision, in which
Neaves promised he would "only use the Confidential
Information for the benefit of O'Sullivan, and not
for [his] own or anyone else's benefit." NSA ¶
3. Neaves agreed that when his "employment with
O'Sullivan ends regardless of the reason, [he] will
return in good condition all O'Sullivan property and
Confidential Information." Id. ¶ 4.
also restricted Neaves' ability to solicit certain
O'Sullivan contacts. In pertinent part, Neaves agreed
[f]or one year after [his] employment with O'Sullivan
ends, either voluntarily or for cause, [he] agree[d] that
[he] will not (a) sell, attempt to sell, or assist others in
selling or providing products or services in competition with
the Business of O'Sullivan at the Restricted Contacts; or
(b) help, financially or otherwise, any person or entity to
compete with the Business of O'Sullivan by using or
contacting the Restricted Contacts.
Id. ¶ 8. In turn, "Restricted
Contacts" is defined as:
"actual and potential customers, agents, distributors,
vendors, business partners, and persons or entities that,
during the two years before [Heaves'] employment with
O'Sullivan ends, [he] had direct contact with or that
[he] had indirect contact with, including indirect contact by
supporting or being responsible for the activities of other
O'Sullivan employees who had direct contact with the
Id. Finally, Neaves agreed that, during his
employment with O'Sullivan and for two years after his
employment ended, he would inform any potential future
employer of the contents of the NSA. Id. ¶ 11.
resigned on December 12, 2016, telling O'Sullivan that he
had accepted a position as Director of Research and
Development with Uniroyal Global Engineering, Inc.
("Uniroyal"). Uniroyal, which also develops and
manufactures artificial leather products, is a direct
competitor of O'Sullivan and provides products to many of
O'Sullivan's current and potential clients. In
conversations with O'Sullivan management as he was
planning his resignation, Neaves claimed he did not know the
contents of the NSA. Additionally, shortly after Neaves left
O'Sullivan, a forensic examination of Neaves'
company-issued laptop indicated that Neaves transferred
certain proprietary O'Sullivan documents to a personal
USB flash drive, which Neaves did not return upon his
March 30, 2017, O'Sullivan commenced this action.
O'Sullivan's Complaint seeks a declaration that
Neaves is violating the terms of the NSA and injunctive
relief against future violations of the NSA. The court,
concerned that O'Sullivan had not properly pled subject
matter jurisdiction in the Complaint, issued an show cause
Order why the case should not be dismissed for lack of
jurisdiction. Order, ECF No. 5. O'Sullivan's
Memorandum in Response to the Court's Show Cause Order,
ECF No. 7, pled additional jurisdictional facts. In further
support of the court's jurisdiction over its claim,
O'Sullivan also included the Declaration of Richard J.
Till (the "Till Declaration" or "Till
Decl."), ECF No. 7 Ex. A, who is Vice President of Human
Resources for O'Sullivan. The same day, Neaves moved to
dismiss the Complaint for lack of subject matter jurisdiction
and failure to state a claim.
first moves to dismiss the Complaint under Federal Rule of
Civil Procedure 12(b)(1) for lack of subject matter
jurisdiction. Federal courts are courts of limited
jurisdiction. See Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546, 552 (2005); United States ex
rel. Vuyyuru v. Jadhav. 555 F.3d 337, 347 (4th Cir.
2009). A federal court's jurisdiction is confined to the
cases that, within the bounds of the Constitution, Congress
has allowed the court to hear. See Bowles v.
Russell, 551 U.S. 205, 212 (2007). If a federal court
determines it lacks subject matter jurisdiction over a
complaint, "the action must be dismissed."
Vuyyuru, 555 F.3d at 347. The party seeking to
invoke a federal court's jurisdiction bears the burden of
demonstrating that subject matter jurisdiction actually
exists. Shore Bank v. Harvard. 934 F.Supp.2d 827,
832 (E.D. Va. 2013).