Russomano v. Novo Nordisk Inc. ( 2020 )

United States Court of Appeals
For the First Circuit
No. 20-1173
THOMAS A. RUSSOMANO,
Plaintiff, Appellee,
v.
NOVO NORDISK INC.,
Defendant/Third Party Plaintiff, Appellant,
v.
BIOMARIN PHARMACEUTICAL, INC.,
Third Party Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Allison D. Burroughs, U.S. District Judge]
Before
Torruella, Lynch, and Kayatta,
Circuit Judges.
S. Elaine McChesney, Bryan Killian, and Morgan, Lewis &
Bockius LLP on brief for appellant.
Christopher M. Morrison and Jones Day on brief for appellees.
June 2, 2020
LYNCH, Circuit Judge. Pharmaceutical company Novo
Nordisk Inc. ("Novo Nordisk") filed a motion for a temporary
restraining order and preliminary injunction against Thomas
Russomano, one of its former employees, and BioMarin
Pharmaceutical, Inc. ("BioMarin"), another pharmaceutical company
and Russomano's current employer. The motion sought to enforce
the terms of a confidentiality and non-compete agreement that
Russomano signed when he was employed at Novo Nordisk. The
agreement forbade Russomano from working for a competitor in
certain positions for a year after the end of his Novo Nordisk
employment and from ever disclosing any confidential information.
The district court denied Novo Nordisk's motion because
it found that Novo Nordisk could not show a likelihood of success
on the merits. The court found that Russomano was likely no longer
bound by the non-compete portion of the agreement because, by its
terms, those provisions expired twelve months after the
termination of Russomano's employment, and Novo Nordisk briefly
laid him off in 2018 before rehiring him without having him sign
a new non-compete agreement. Novo Nordisk argues that Russomano
was not laid off in 2018 but instead transferred positions within
the company, such that his employment was not terminated until
Russomano resigned in early 2020. Finding no abuse of discretion,
we affirm the district court's denial of Novo Nordisk's motion.
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I.
A. Factual Background
Russomano began his employment with Novo Nordisk on
January 25, 2016, as a Hemophilia Community Specialist for the New
England region. As a condition of his employment, he signed a
confidentiality and non-compete agreement on December 14, 2015.
The non-compete provisions applied "during [Russomano's]
employment and for a period of twelve months following the
termination of [his] employment for any reason, voluntary or
involuntary."
On October 24, 2016, Novo Nordisk told Russomano that
his position was being eliminated, and he would be laid off. On
November 18, 2016, Russomano's employment was terminated, along
with all other fifteen to twenty employees in the same role. He
reapplied for open positions at Novo Nordisk, and after an
approximately three-week period during which Novo Nordisk did not
employ him, on December 8, 2016, the company rehired Russomano as
a Hemophilia Therapy Manager for the Penn West region, encompassing
New York, Pennsylvania, and West Virginia.
The job started on December 12, 2016.1 This position
differed from his previous one in several ways. His salary was
higher, the region his position covered was larger, and he
1 In June 2017, Russomano's territory was changed to New
England.
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interacted with patients less often. As a condition of being
rehired, Russomano signed a second confidentiality and non-compete
agreement on December 7, 2016, which was identical to the 2015
agreement.
Approximately a year and a half later, on June 20, 2018,
Novo Nordisk sent Russomano a new letter informing him that it was
eliminating his position and terminating his employment as part of
a "realignment" of its business. The letter stated: "Based on the
new operating model design, your position will be eliminated and
your employment will end effective August 3, 2018 (the 'Separation
Date')." The letter acknowledged that "one of [his] first
priorities . . . will be finding new employment" and encouraged
Russomano to apply for "a number of open positions throughout the
organization." Finally, the letter discussed the conditions
Russomano would need to meet in order to receive severance
benefits, which included remaining in his role until the Separation
Date, abiding by the company's rules and policies, and "not
accept[ing] an alternate position with Novo Nordisk prior to the
Separation Date."
Russomano then applied for open positions in the company
and, after interviewing, was offered the different position of
Senior Hemophilia Community Liaison -- New York, NY. Novo Nordisk
sent Russomano a letter "formally confirm[ing his] transfer" to
the new position. Russomano's start date in the new role was
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"[e]ffective August 6, 2018," a Monday three days after the Friday
end date specified in the earlier letter Novo Nordisk sent
Russomano notifying him of his employment's termination.
Russomano was not required to sign a new confidentiality and non-
compete agreement as part of accepting this new job.
Senior Hemophilia Community Liaison was a new role
within the organization. The offer letter Russomano received
described the role as offering him "the opportunity to work with
new colleagues and learn a new area." Russomano was no longer
responsible for interfacing with prescribers and potential
prescribers. The boundaries of his territory changed again. And
his incentive compensation was decreased by more than ten thousand
dollars.
Russomano resigned from his position at Novo Nordisk on
January 6, 2020. His first day at BioMarin as a "Senior Account
Manager -- Hemophilia Gene Therapy" was January 21, 2020.
B. Procedural History
Despite Russomano's request, Novo Nordisk declined to
give Russomano written assurance that it did not intend to try to
enforce the non-compete provisions of the agreement against him
for his new role at BioMarin. In consequence, on January 9, 2020,
Russomano sued Novo Nordisk in state court seeking a declaratory
judgment that his future employment with BioMarin would not violate
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a confidentiality and non-compete agreement he signed while
working at Novo Nordisk.2
Novo Nordisk removed the case to federal court on January
15, 2020, and filed counterclaims against Russomano on January 21,
2020, for breach of contract, unfair competition, and
misappropriation of trade secrets. The same day, it also filed a
third-party complaint against BioMarin for tortious interference
with a contract, unfair competition, and misappropriation of trade
secrets.
On January 21, 2020, Novo Nordisk filed a motion for a
temporary restraining order and preliminary injunction against
Russomano and BioMarin. In its motion, Novo Nordisk asked the
district court (1) to enjoin Russomano, for a year, from violating
the terms of the Agreements; (2) to enjoin BioMarin, for a year,
from employing Russomano in violation of the Agreements; and (3)
to enjoin Russomano and BioMarin from "using, disclosing or
misappropriating" confidential information. Russomano and
BioMarin opposed the motion on January 21 and 24, 2020.
The district court heard testimony on Novo Nordisk's
motion on January 27 and 28, 2020. Russomano testified, as did
John Cones, the BioMarin employee who recruited and hired
2 Russomano's complaint only mentioned the 2015
confidentiality and non-compete agreement. The district court
proceedings have since made clear that he signed a second identical
agreement in 2016.
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Russomano, and Tammy Shelor-Blain, a Novo Nordisk BioPharm Region
Director who supervised Hemophilia Therapy Managers and Community
Liaisons like Russomano. The parties submitted evidence including
declarations from Russomano, Cones, Shelor-Blain, and Keith
Middleton, a Novo Nordisk Human Resources employee.
The court denied Novo Nordisk's motion for a temporary
restraining order and preliminary injunction on February 5, 2020.
It wrote that "at this stage," based on a "review of the evidence
presented," Russomano's employment subject to his December 7,
2016, agreement with Novo Nordisk was terminated on August 3, 2018.
The court viewed the language Novo Nordisk used in its letter
notifying Russomano that his position would be eliminated as
unambiguous, and it rejected Novo Nordisk's argument that the
termination of Russomano's employment was conditional upon him not
finding a new position with the company. It found that the twelve-
month non-compete provisions he agreed to in 2016 had expired in
August 2019, twelve months after he left his position in August
2018, and Russomano thus was free to work in any role at BioMarin.3
Novo Nordisk timely appealed the district court's denial
of the preliminary injunction on February 7, 2020. We have
jurisdiction under 28 U.S.C. § 1292(a)(1).
3 The court noted that the confidentiality provisions
extend indefinitely and are still in effect.
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II.
A. Standard of Review and Choice of Law
A trial court ruling on a motion for a preliminary
injunction must consider the following four factors: "'the
movant's likelihood of success on the merits'; 'whether and to
what extent the movant will suffer irreparable harm' in the absence
of injunctive relief; 'the balance of [relative] hardships,' that
is, the hardship to the nonmovant if enjoined as opposed to the
hardship to the movant if no injunction issues; and 'the effect,
if any, that an injunction [or the lack of one] may have on the
public interest.'" CVS Pharmacy, Inc. v. Lavin, 951 F.3d 50, 55
(1st Cir. 2020) (alterations in original) (quoting Corp. Techs.,
Inc. v. Harnett, 731 F.3d 6, 9, (1st Cir. 2013)).
Novo Nordisk's likelihood of success on the merits is
the factor that "weighs most heavily in the preliminary injunction
analysis." Id. (citing Ross-Simons of Warwick, Inc. v. Baccarat,
Inc., 102 F.3d 12, 16 (1st Cir. 1996)). "[I]f the moving party
cannot demonstrate that he is likely to succeed in his quest, the
remaining factors become matters of idle curiosity." Maine Educ.
Ass'n Benefits Tr. v. Cioppa, 695 F.3d 145, 152 (1st Cir. 2012)
(alteration in original) (quoting New Comm Wireless Servs., Inc.
v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir. 2002)).4
4 Winter v. Natural Resources Defense Council, Inc., 555
U.S. 7 (2008), says it requires the movant to show "that he is
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We review the district court's ruling on a motion for a
preliminary injunction for abuse of discretion. Voice of the Arab
World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26, 31 (1st Cir.
2011). Within that framework, "we examine legal questions de novo,
findings of fact for clear error, and the balancing of the four
factors for abuse of discretion." CVS Pharmacy, Inc., 951 F.3d at
55.
When evaluating the likelihood of success on the merits
in a diversity case, we apply state law for the substantive rules
of decision. Id. at 55 n.4. Novo Nordisk argues that the
appropriate law to apply is New Jersey law because the
confidentiality and non-compete agreement specified that New
Jersey law should apply. Russomano and BioMarin argue that under
Massachusetts law, the law of the forum state, the choice-of-law
provision is invalid because Russomano did not have a meaningful
likely to succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that the
balance of equities tips in his favor, and that an injunction is
in the public interest." Id. at 20. Some have suggested that
Winter may well allow variations of this formulation. See id. at
51 (Ginsburg, J., dissenting) ("[C]ourts have evaluated claims for
equitable relief on a 'sliding scale,' sometimes awarding relief
based on a lower likelihood of harm when the likelihood of success
is very high. This Court has never rejected that formulation, and
I do not believe it does so today."); see generally Bethany M.
Bates, Note, Reconciliation After Winter: The Standard for
Preliminary Injunctions in Federal Courts, 111 Colum. L. Rev. 1522,
1537-48 (2001) (surveying other circuits' approaches). The
approach taken is immaterial here. The likelihood of success on
the merits is so low, as we further discuss below, that it would
overwhelm any of the other factors.
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choice in accepting this term and, separately, it would violate
Massachusetts public policy to continue to enforce a non-compete
agreement after there was a material change in Russomano's
employment at Novo Nordisk. They argue that Massachusetts law
should apply instead.
The district court declined to determine which state law
applied because the states' laws are substantially similar for
these purposes, and it cited cases from both New Jersey and
Massachusetts in its analysis.5 See Darr v. Plaintiffs' Interim
Exec. Comm. (In re TelexFree), 941 F.3d 576, 584 n.5 (1st Cir.
2019) ("[W]hen the result in a case will not be affected by the
choice of law, an inquiring court, in its discretion, may simply
bypass the choice." (alteration in original) (quoting Lexington
Ins. Co. v. Gen. Accident Ins. Co. of Am., 338 F.3d 42, 46 (1st
Cir. 2003))). We agree and do the same.
B. There Was No Error in the District Court's Conclusion that
Novo Nordisk's Termination Letter Was Unambiguous that
Russomano's Employment Ended on August 2, 2018
We review legal conclusions, such as the interpretation
of an unambiguous written legal instrument, de novo. See VFC
Partners 26, LLC v. Cadlerocks Centennial Drive, LLC, 735 F.3d 25,
29 (1st Cir. 2013); see also Kieffer v. Best Buy, 14 A.3d 737, 742
(N.J. 2011); Bank v. Thermo Elemental Inc., 888 N.E.2d 897, 907
5 Novo Nordisk conceded the states' laws are
"substantially similar" to the district court.
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(Mass. 2008). The district court found that the June 20, 2018,
letter Novo Nordisk sent Russomano unambiguously terminated his
employment.
Novo Nordisk does not contest that "for Russomano to
continue to be bound not to compete beyond 2019 Novo Nordisk would
have needed to ensure there was no break in employment."
(Alterations omitted.) Rather, it argues that the terms of the
letter are ambiguous and Russomano was continuously employed
between December 8, 2016, when he was rehired for the first time,
and January 6, 2020, when he resigned to work for BioMarin.
This argument is without merit. The district court did
not err in concluding that the letter laying Russomano off was
unambiguous when it stated that his employment ended "effective
August 3, 2018." The letter offering him a new position was also
unambiguous: his new position was "[e]ffective August 6, 2018."
The word "effective" has a clear meaning in this context. See
Effective, Black's Law Dictionary (11th ed. 2019) (defining
"effective" as "in operation at a given time"). Russomano's
employment thus "terminat[ed]" as per the terms of the
confidentiality and non-compete agreement in August 2018, and he
is free to work for BioMarin as of August 2019.6
6 In its reply brief, Novo Nordisk argues for the first
time that its June 20, 2018, letter notifying Russomano that it
was terminating his employment can be construed as merely an offer
to terminate his employment, which Russomano rejected when he
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We need not go farther in our analysis. Where language
is unambiguous, resort to extrinsic evidence is unnecessary. See
EventMonitor, Inc. v. Leness, 44 N.E.3d 848, 856 (Mass. 2016) ("A
reviewing court considers extrinsic evidence only when a term in
a contract is ambiguous." (citing Mass. Mun. Wholesale Elec. Co.
v. Danvers, 577 N.Ed.2d 283, 289 (Mass. 1991)));7 Barila v. Bd. of
Ed. of Cliffside Park, No. A-39-18, 2020 WL 1907814, at *12 (N.J.
Apr. 20, 2020) ("[W]hen the intent of the parties is plain and the
language is clear and unambiguous, a court must enforce the
accepted his new position at the company. This and the other
related arguments made for the first time in the reply brief are
waived. See United States v. Mayendía-Blanco, 905 F.3d 26, 32
(1st Cir. 2018) ("[A]rguments not raised by a party in its opening
brief are waived.").
7 We do not foreclose the possibility that Massachusetts
courts might, in appropriate circumstances, refer to extrinsic
evidence to help determine whether the text of an agreement is
ambiguous or not. See, e.g., Robert Indus., Inc. v. Spence, 291
N.E.2d 407, 409 (Mass. 1973) (acknowledging that "[a] lease is to
be read in the light of the circumstances of its execution, which
may enable the court to see that its words are really ambiguous");
see generally Restatement (Second) of Contracts § 214(c) (Am. Law.
Inst. 1981) (allowing extrinsic evidence not only to help with
interpretation of facially ambiguous language but more broadly to
establish "the meaning of the writing, whether or not integrated");
id. cmt. b ("Even though words seem on their face to have only a
single possible meaning, other meanings often appear when the
circumstances are disclosed. In cases of misunderstanding, there
must be inquiry into the meaning attached to the words by each
party and into what each knew or had reason to know.").
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agreement as written, unless doing so would lead to an absurd
result." (quoting Quinn v. Quinn, 137 A.3d 423, 429 (N.J. 2016))).8
Novo Nordisk's efforts to find ambiguity in its letter
are unavailing. The company argues that the termination of
Russomano's employment was conditional on him not securing another
role within the company. Specifically, it argues that "[t]he
letter did not unambiguously terminate Russomano; rather, the
letter stated that Russomano's job position was going to be
eliminated and that Russomano's employment would be terminated if
he did not transfer to another position within the company." Not
so.
The only conditional language in the letter was in
reference to the severance benefits, which were only available to
Russomano if he met certain conditions, including "not accept[ing]
an alternate position with Novo Nordisk prior to the Separation
Date." There was no conditional language in the part of the letter
informing Russomano that his "employment will end." This explains
8 Similarly, under New Jersey law, although "[i]f the
language of a contract 'is plain and capable of legal construction,
the language alone must determine the agreement's force and
effect,'" Manahawkin Convalescent v. O'Neill, 85 A.3d 947, 958-59
(N.J. 2014) (quoting Twp. of White v. Castle Ridge Dev. Corp., 16
A.3d 399, 403 (N.J. Super. Ct. App. Div. 2011)), "[e]ven in the
interpretation of an unambiguous contract, we may consider 'all of
the relevant evidence that will assist in determining [its] intent
and meaning,'" id. at 959 (alteration in original) (quoting Conway
v. 287 Corp. Ctr. Assocs., 901 A.2d 341, 346 (N.J. 2006)).
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why his employment was terminated but he did not receive severance
benefits.
Likewise, a passing reference to Russomano's "transfer"
in the letter Novo Nordisk sent rehiring him is not enough to
undermine its clear references to the "end" of his employment with
the company in the termination letter and later his "new position."
Although we need not consult extrinsic evidence to
confirm that Russomano's employment was terminated briefly in
2018, the available extrinsic evidence supports this
interpretation. Novo Nordisk concedes that it laid off Russomano
in 2016, and the circumstances surrounding the termination of
Russomano's employment in 2016 are quite similar to what happened
to him in 2018.
Both times he was laid off as a result of restructuring.
Both times Russomano had to re-apply for open positions in the
organization with no guarantee of being re-hired. His new roles
were both markedly different than his previous ones. Both times
he received a new title and different compensation, and he worked
with different populations and in different geographic areas.
Novo Nordisk argues that Russomano effectively conceded
that his employment with the company was not terminated and instead
he merely was transferred when Russomano testified at the motion
hearing, "I was definitely not unemployed." This argument is
misleading. Before stating he was "not unemployed," Russomano
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attempted to clarify the terms of the question, asking, "Meaning
like leaving the company? . . . Having a gap?" Only after the
lawyer agreed to that definition did Russomano say he was "not
unemployed." Russomano also added afterwards, "I thought of it as
a termination since we did receive, you know, the notice and the
layoff notice and things like that."
We see no abuse of discretion in the district court's
finding that Novo Nordisk was not likely to succeed on the merits.
Nor do we find any abuse of discretion in its decision not to
analyze the remaining factors in the test for a preliminary
injunction before denying the motion, particularly because Novo
Nordisk's likelihood of success is so low.
III.
The district court's denial of Novo Nordisk's motion for
a temporary restraining order and preliminary injunction is
affirmed. Costs are awarded to Russomano and BioMarin.
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