Virginia Lawyers Weekly VA Lawyers Weekly
Where a company argued a suit brought by former employees seeking to invalidate their restrictive covenants should be transferred to Florida pursuant to a choice of venue clause, its motion was denied. The clause applied to proceedings “to enforce” the agreement, while the employees here were seeking “to invalidate” the agreement.
Background
This case arises from an employment contract that contained a restrictive covenant prohibiting former employees from working in the transportation logistics industry following the termination of their employment. Ian Woie, Ryan Breeden, Donald Morrow, Daniel Boehling and Traffic Tech Inc. filed this declaratory action to invalidate the restrictive covenant as unlawful under Virginia law.
The individual plaintiffs are previous employees of Blue-Grace Logistics LLC who all live and work in Virginia and are now seeking employment with Traffic Tech. This matter is now before the court on defendant’s motion to dismiss and motion to transfer.
Standing
At the time defendant filed its motion, defendant argued that Traffic Tech lacked standing because Blue-Grace had not filed a lawsuit and no threat of litigation had been made either. However, since that time, defendant filed a Florida state court lawsuit against Traffic Tech and the individual plaintiffs related to the same employment agreement that is the basis of this declaratory action. Because the state court lawsuit is sufficient to confer standing to Traffic Tech, defendant’s motion to dismiss will be denied.
Forum selection clause
Blue-Grace argues that plaintiffs are subject to valid and enforceable Florida choice-of-law and forum selection clauses. The forum selection clause states “[a]ny action or proceeding by either Party to enforce this Agreement shall be brought only in any state or federal court located” in Hillsborough County, Florida.
Plaintiffs argue that they are seeking “to invalidate” the contract, which is not the same as claims seeking “to enforce” the contract under a plain-language interpretation. Thus, plaintiffs argue the forum selection clause does not apply to their claim. The court agrees.
Plaintiffs are not seeking contract enforcement at all. Rather, they are specifically seeking to invalidate the contract as unlawful because some of its provisions are unreasonable and against Virginia law and public policy. When looking at the plain language of the provision, the court agrees that the language “any action or proceeding by either party to enforce this Agreement” does limit the applicability of the forum selection clause to causes of action seeking only to enforce the agreement.
Blue-Grace could have used more expansive language to clearly outline that the provision was applicable to any case involving the employment agreement, such as “arising out of this Agreement,” “any claim involving this Agreement,” “regarding enforceability of this Agreement,” etc. It did not. Therefore, under a plain-language interpretation, the court finds that plaintiffs’ action is not subject to the forum selection clause.
Section 1404(a)
Blue-Grace also seeks a transfer of this case pursuant to 28 U.S.C. § 1404(a). The first factor, weight accorded to a plaintiffs’ choice of venue, clearly weighs in favor of not transferring. The individual plaintiffs all reside, worked and continue to work in Virginia.
The second factor, witness convenience and access, also weighs in favor of not transferring. The individual plaintiffs, which would be most of the witnesses in this case, are located here in the Eastern District of Virginia. And the Blue-Grace office where the individual employees worked was in Virginia. The third factor, convenience of the parties, is a more neutral factor. Lastly, as to the interests of justice factor, this is a local dispute, and there is an interest in having “local controversies decided at home.”
Abstention
Given the pending Florida state court suit, this court considered whether it should abstain from hearing this matter based on principles of comity. After considering the factors from Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976), the court declines abstention. It will exercise its jurisdiction over this case and allow this case to go forward.
Defendant’s motion to dismiss denied.
Woie v. Blue-Grace Logistics LLC, Case No. 3:22-cv-637, Feb. 6, 2023. EDVA at Richmond (Hudson). VLW 023-3-049. 14 pp.
