ADP, LLC v. BAKSHI

BRIEF in Opposition to Plaintiff's Cross-Motion for Summary Judgment and in Further Support of Defendant's Summary Judgment Motion

D.N.J.December 10, 2018

SAC 443031312v2 GREENBERG TRAURIG LLP 500 Campus Drive, Suite 400 Florham Park, NJ 07932 (973) 360-7900 Attorneys for Defendant Uminderjit Bakshi UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY ADP, LLC, Civil Action No. 2:15-cv-08385 (CCC-MF) Plaintiff, v. UMINDERJIT BAKSHI, Defendant. DEFENDANT’S BRIEF IN OPPOSITION TO PLAINTIFF’S CROSS- MOTION FOR SUMMARY JUDGMENT AND IN FURTHER SUPPORT OF DEFENDANT’S SUMMARY JUDGMENT MOTION On the Brief: Robert H. Bernstein, Esq. Kurt A. Kappes, Esq. Mark D. Lurie, Esq. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 1 of 44 PageID: 3523 i SAC 443031312v2 TABLE OF CONTENTS PAGE PRELIMINARY STATEMENT ........................................................................................................ 1 STATEMENT OF FACTS ................................................................................................................. 5 LEGAL ARGUMENT ........................................................................................................................ 6 I. California’s Robust Public Policy Against Employment Restrictions Outweighs Plaintiff’s Unilateral Choice of New Jersey Law. ................................................................................... 6 A. Courts Routinely Find That, Where California Has the More Substantial Relationship, California Law Trumps Contrary, Unilaterally Imposed Laws of Other Jurisdictions. ......... 6 B. California’s Relationship to this Litigation is Substantially Greater Than New Jersey’s Connection. ............................................................................................................................ 9 II. Plaintiff is Collaterally Estopped from Enforcing the Restricted Stock Agreements. ......... 11 A. After a Full Opportunity to Litigate the Issue, Courts Have Determined that the Restrictions in Plaintiff’s Stock Agreements Are Unenforceable and Serve No Legitimate Interest. ..... 11 B. The Doctrine of Collateral Estoppel is Designed to Preclude Precisely the Duplicative Litigation and “Aura of the Gaming Table” that Permeates this Action. ............................. 12 C. Courts Have Restricted Plaintiff’s Non-Compete Restrictions to Only Those Customers With Which the Former Employee Was Involved, and Not All 600,000 Customers, as Plaintiff Contends. Nor Has Any Court Granted Plaintiff’s Request to Prevent an Employee from Competing in the Employee’s Prior Territory, as Plaintiff Now Belatedly Demands. .............................................................................................................................. 15 III. To the Extent that the Restrictive Covenants are Enforceable (and They Are Not), Mr. Bakshi Did not Breach His Obligations. .............................................................................. 17 A. Notwithstanding Plaintiff’s Attempts to Distort and Omit Critical Facts, There Are No Genuine Issues of Material Fact that Mr. Bakshi Breached Any Restrictions to the Extent They are Enforceable. ........................................................................................................... 19 B. Contrary to Plaintiff’s Factually Unsupported Assertion, Mr. Bakshi Did Not Breach the Agreement by Retaining a Customer List. The Record is Undisputed that He Did So Solely to Ensure that He Did Not Call on Any of His Former Customers. ..................................... 27 IV. The Court Should Deny Plaintiff’s Motion, and Grant Summary Judgment to Mr. Bakshi, As Plaintiff Cannot Establish any Damages ......................................................................... 29 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 2 of 44 PageID: 3524 ii SAC 443031312v2 A. Damages are an Essential Element of a Prima Facie Breach of Contract Case, and Summary Judgment is Warranted Where Plaintiff Cannot Establish Damages. .................. 29 B. Unsurprisingly, Plaintiff Admits that It Has No Evidence of Damages, as Mr. Bakshi Never Breached Any Agreement. ................................................................................................... 30 V. The Court Should Deny Plaintiff’s Request to Further Extend the Restrictions, As (i) There is No Evidence of Breach, (ii) any Extension is Contrary to California Law and (iii) Plaintiff Played Games and Intentionally Sat on Its Rights, to Mr. Bakshi’s Detriment ..... 31 A. Mr. Bakshi Did Not Breach the Agreement. ........................................................................ 31 B. Plaintiff’s Proposed Extension of the Restricted Covenants is Voidable by Mr. Bakshi, and Enforceable Only In California, Under California Law. ...................................................... 32 C. Plaintiff Waived Any Right To Specific Performance By Its Extraordinary Dilatory Conduct and Gamesmanship. ............................................................................................... 33 D. Courts Refuse to Extend Plaintiff’s Restrictive Agreements Based on De Minimus Breaches................................................................................................................................ 36 VI. Plaintiff is Not Entitled to Attorneys’ Fees. ......................................................................... 37 CONCLUSION ................................................................................................................................. 38 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 3 of 44 PageID: 3525 i SAC 443031312v2 TABLE OF AUTHORITIES CASES: PAGE ADP v. Hopper, Docket ESX-C-23-16 (June 30, 2017) .................................................................................. passim ADP v. Karamitas, Docket ESX-C-143-16 (August 30,, 2017) ............................................................................ 15, 36 ADP, LLC v. Capote, 2015 WL 13447655 (D.N.J. Jul. 28, 2015) .................................................................................... 8 ADP, LLC v. Capote, 2016 WL 3742319 (W.D. Tex. Jul. 7. 2016) ............................................................................. 8, 9 ADP, LLC v. Kusins, Docket ESX-C-264-15 (June 27, 2017) ................................................................................. 12, 15 ADP, LLC v. Rafferty, 2018 WL 1617705 (D.N.J. Apr. 3, 2018) (Linares, J.) ................................................................ 11 ADP, LLC v. Ultimate Software Group, Inc., 2018 WL 1151713 (D.N.J. Mar. 5, 2018) .................................................................................... 14 Allesandra v. Gross, 187 N.J. Super. 96 (App.Div.1982).............................................................................................. 12 Barr & Sons, Inc. v. Cherry Hill Ctr, Inc., 90 N.J. Super. 358 (App. Div. 1966)............................................................................................ 30 Blonder-Tongue Labs. v. University of Illinois Foundation, 402 U.S. 313 (1971) ......................................................................................................... 12, 13, 14 Chaudhry Corp. v. City of Newark, 2011 WL 6782400 (N.J. App. Div. Dec. 28, 2011) ..................................................................... 34 Chemetall US Inc. v. Laflamme, 2016 WL 885309 (D.N.J. Mar. 8, 2016) ................................................................................ 7, 8, 9 Coyle v. Alexander’s, 199 N.J. Super. 212 (App. Div. 1985).......................................................................................... 29 Deficcio v. Winnebago Industries, Inc., 2015 WL 5722724 (D.N.J. Sept. 29, 2015).................................................................................. 29 Diversant, LLC v. Carino, 2018 WL 1610957 (D.N.J. Apr. 2, 2018) .............................................................................. 6, 7, 9 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 4 of 44 PageID: 3526 ii SAC 443031312v2 Hernandez v. Region Nine Housing Corp., 146 N.J. 645 (1996) ...................................................................................................................... 14 Houseman v. Dare, 405 N.J. Super. 538 (App. Div. 2009).................................................................................... 33, 34 Kare Distrib. v. Jam Labels & Cards, 2012 WL 266386 (D.N.J. Jan. 30, 2012) ..................................................................................... 30 Knorr v. Smeal, 178 N.J. 169 (2003) ...................................................................................................................... 34 Kortenhaus v. Eli Lilly & Co., 228 N.J. Super. 162 (App. Div. 1988).......................................................................................... 12 Laidlaw v. Student Transp. Of America, Inc., 204 F. Supp. 2d 727 (D.N.J. 1998) ................................................................................................ 3 Lavin v. Bd. Of Educ., 90 N.J. 145 (1982) ........................................................................................................................ 34 Lee v. Hudson Toyota, 2017 WL 2854517 (N.J. App. Div. July 5, 2017) ........................................................................ 29 Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588 (App. Div.), certif. denied, 183 N.J. 591 (2005) ......................................... 33 Parklane Hosiery Co. v Shore, 439 U.S. 322 (1979) ......................................................................................................... 12, 13, 14 Pfizer, Inc. v. Teva Pharm, USA, Inc., 429 F.3d 1364 (Fed. Cir. 2005) .................................................................................................... 36 PTT, LLC v. Gimme Games, 2014 WL 5343304 (D.N.J. Oct. 20, 2014) ................................................................................... 35 Saturn Wireless Consulting v. Aversa, 2017 WL 1538157 (D.N.J. Apr. 26, 2017) .................................................................................. 16 Smart Vent Products, Inc. v. Crawl Space Door System, Inc., 2016 WL 4408818 (D.N.J. Aug. 16, 2016) .................................................................................. 35 Stamato v. Agamie, 24 N.J. 309 (1957) ........................................................................................................................ 34 Tran v. Baik, 2009 WL 2143647 (D.N.J. July 14, 2009) ................................................................................... 30 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 5 of 44 PageID: 3527 iii SAC 443031312v2 U.S. Lubes, LLC v. Consolidated Motor Oils, Inc., 2008 WL 140798 (App. Div. Jan. 16, 2008) ................................................................................ 30 Van Dissel v. Jersey Central Power & Light Co., 194 N.J. Super. 108 (App. Div. 1984), cert. denied, 99 N.J. 186 (1984)..................................... 14 Warner Lambert Co. v. McCrory’s Corp., 718 F. Supp. 389 (D.N.J. 1989) ................................................................................................... 36 Winters v. North Hudson Regional Fire and Rescue, 212 N.J. 67 (2012) ........................................................................................................................ 14 Zoneraich v. Overlook Hosp., 212 N.J. Super. 83 (App. Div. 1986), cert. denied, 107 N.J. 32 (1986)....................................... 14 Statutes Labor Code § 925 ..................................................................................................................... 7, 32, 33 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 6 of 44 PageID: 3528 1 SAC 443031312v2 PRELIMINARY STATEMENT Defendant, Uminderjit Bakshi, respectfully submits this brief in opposition to Plaintiff, ADP LLC’s cross-motion for summary judgment and in further support of his summary judgment motion. As detailed below, as well as in Mr. Bakshi’s brief in support of his summary judgment motion, Plaintiff brought this action solely to restrain trade, in violation of well-established law and public policy. During the past three years that this litigation has been pending (and during which any restrictions long lapsed), Plaintiff never sought injunctive relief. Nor has Plaintiff experienced any damages. Having failed to exercise its rights, and in the absence of any damages, Plaintiff now has the temerity to ask the Court to extend Mr. Bakshi’s non-compete obligations for an additional year. Plaintiff further asks this Court to impose substantial attorneys’ fees on Mr. Bakshi, based on Plaintiff’s two-pronged scheme of vigorously litigating this action while delaying its resolution, because it knows that Mr. Bakshi’s actions have caused it no harm. In support of its belated request for relief, Plaintiff asks this Court to disregard California’s well-established strong public policy prohibiting non- competition restrictions against its residents (such as Mr. Bakshi), which courts throughout this country routinely recognize override contrary choice of law Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 7 of 44 PageID: 3529 2 SAC 443031312v2 provisions. In each of those cases, the courts applied the exact same Restatement choice of law analysis that New Jersey courts have adopted. Plaintiff further conveniently ignores decisions – which it has litigated and lost – holding that the Restricted Stock Agreements at issue here are unenforceable even under New Jersey law. Put simply, ADP has already argued – and lost – its aggressive assertion that it can somehow muzzle a former employee from calling on any of Plaintiff’s 600,000 customers, regardless of the former employee’s lack of knowledge regarding these entities. Plaintiff further asks this Court to ignore its sworn answers to interrogatories, wherein Plaintiff acknowledged that the non-compete obligations could only apply to those customers that Mr. Bakshi solicited in the two years prior to his resignation. More specifically, Mr. Bakshi asked Plaintiff to identify each client which Plaintiff contends Mr. Bakshi agreed not to “directly or indirectly, solicit, divert, appropriate or accept any business from, or attempt to solicit, divert, appropriate, or accept any business from … for the purposes of pricing products or services that are the same as or substantially similar to those provided in the Business of ADP,” as that term is used in the September 2, 2014 Restrictive Covenant, which is the most expansive version of the non-solicitation provision. (Defendant’s First Set of Interrogatories, Interrogatory No. 8).1 Plaintiff responded: 1 A copy of the Interrogatory is attached as Exhibit A to the Certification of Mark Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 8 of 44 PageID: 3530 3 SAC 443031312v2 “ADP previously produced a list of those customers that Bakshi directly called upon within the two year period prior to his resignation from ADP.” (Lurie Reply Cert., Ex. B). As Mr. Bakshi undisputedly did not solicit the customers that he called upon during the last years of his employment, Plaintiff disingenuously engages in a “bait and switch.” Rather than dismiss the claims for lack of proof that Mr. Bakshi solicited any of the customers that Plaintiff identified (as it should have done), Plaintiff now, years later, seeks to retroactively hold Mr. Bakshi responsible for calling on any of the 600,000 customers that Plaintiff never claimed were at issue during the course of this litigation. Nor can Plaintiff even attempt to identify any legitimate business interest that it seeks to vindicate by prohibiting Mr. Bakshi from calling on customers for which he had no contact or confidential information. Fundamentally, and as this Court instructed: “[i]t must be remembered that restrictive covenants are restraints of trade. The law looks unfavorably toward such restraints.” Laidlaw v. Student Transp. Of America, Inc., 204 F. Supp. 2d 727, 757, 763 (D.N.J. 1998) (construing stock option agreements similar to the ones at issue here, “the primary purpose of the stock-option non-competes is not to protect [Plaintiff’s] legitimate interests, but to buy out potential competitions. Since the Court concludes that the covenants are principally directed at restraining competition, they are unenforceable.”). Mr. D. Lurie (“Lurie Reply Cert.”), submitted herewith. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 9 of 44 PageID: 3531 4 SAC 443031312v2 Bakshi respectfully requests that this Court reject Plaintiff’s overbroad and illegitimate invitation to restrain lawful competition. In short, notwithstanding Plaintiff’s specious attempt to create imagined factual disputes, the following material facts remain undisputed: • Mr. Bakshi has been a California resident for approximately 20 years. • Mr. Bakshi has never been a New Jersey resident. • The overwhelming majority of Mr. Bakshi’s accounts while employed by Plaintiff were in California. • None of Mr. Bakshi’s accounts were in New Jersey.2 • Mr. Bakshi worked out of Plaintiff’s California offices. • Mr. Bakshi’s supervisors worked and resided in California. • In contrast to the thousands of meetings that Mr. Bakshi attended in California, he attended only three meetings in New Jersey in the last six years of his employment. • Mr. Bakshi’s current employer, Workday, is located in California. • Mr. Bakshi’s current Workday accounts are generally located in California; none are located in New Jersey. • The overwhelming majority of Plaintiff’s non-compete agreements restrict Mr. Bakshi from soliciting customers only with which he was involved. • In its Responses to Interrogatories, Plaintiff admitted, as it must, that the non-solicitation was limited to Plaintiff’s customers that Mr. Bakshi 2 In opposition to Mr. Bakshi’s Summary Judgment motion, Plaintiff erroneously claims that Mr. Bakshi had one account in New Jersey. Deposition of Jason Brower (“Brower Tr.”), 47:10-16, attached as Exhibit D to the Certification of Jennifer Rygiel-Boyd (“Rygiel-Boyd Cert.”). Plaintiff conveniently omits that Mr. Brower clarified that his testimony was based solely on his uncertain recollection of Mr. Bakshi’s customer list. Brower Tr. 48:2-24. Plaintiff’s customer list directly contradicts this assertion. See Rygiel-Boyd Cert., Ex. K (almost all customers were located in California; none were in New Jersey). Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 10 of 44 PageID: 3532 5 SAC 443031312v2 called upon during his final two years of employment. • Since commencing employment with Workday, Mr. Bakshi has not had any contact with any of Plaintiff’s customers contained on his customer list. • Relying on two of the nine restrictive covenants, Plaintiff attempts to prevent Mr. Bakshi from calling on any of its 600,000 customers, regardless of whether or not Mr. Bakshi had any involvement with them. • Mr. Bakshi has not shared or divulged any of Plaintiff’s confidential information to Workday. • Plaintiff cannot identify a single customer that it lost as a result of Mr. Bakshi’s activities. • Plaintiff cannot identify a single opportunity that it lost as a result of Mr. Bakshi’s activities. • Plaintiff has not and cannot identify any damages that it experienced. • Plaintiff never sought injunctive relief. • By their terms, all of Mr. Bakshi’s non-compete and non-solicitation restrictions expired more than two years ago, on September 3, 2016. Accordingly, for the reasons set forth below, as well as in Mr. Bakshi’s moving brief, Mr. Bakshi respectfully requests that the Court enter summary judgment in his favor, and dismiss the Complaint, in its entirety, with prejudice. STATEMENT OF FACTS Mr. Bakshi relies on the Statement of Facts submitted with his moving brief, and his response to Plaintiff’s Statement of Facts. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 11 of 44 PageID: 3533 6 SAC 443031312v2 LEGAL ARGUMENT I. CALIFORNIA’S ROBUST PUBLIC POLICY AGAINST EMPLOYMENT RESTRICTIONS OUTWEIGHS PLAINTIFF’S UNILATERAL CHOICE OF NEW JERSEY LAW. As set forth in Mr. Bakshi’s moving brief, and as further detailed below, California has a substantial interest in this matter, and California’s fundamental public policy guarantees its employees unfettered employment rights such that non- compete agreements are unenforceable against its citizens.3 A. Courts Routinely Find That, Where California Has the More Substantial Relationship, California Law Trumps Contrary, Unilaterally Imposed Laws of Other Jurisdictions. As detailed in Mr. Bakshi’s moving brief (Db at 17-21), courts throughout this country routinely recognized in recent years that California’s strong public interest in ensuring its residents’ rights to unfettered employment overrides any contrary choice of law provision. Unable to address this litany of persuasive authority, Plaintiff simply ignores California’s statutory prohibition against non- compete agreements, as well as the overwhelming number of cases, throughout the country, holding that this strong public policy negates any contrary choice of 3 In its opposition, Plaintiff broadly asserts: “Many courts, including this District, have upheld choice of law provisions and enforced non-compete agreements against California-based employees under similar circumstances.” (Pb 10) In support of this broad assertion, Plaintiff cites only one case involving a California resident, Diversant, LLC v. Carino, 2018 WL 1610957 (D.N.J. Apr. 2, 2018), and three cases involving residents of other states which, unlike California, do not have statutory prohibitions against non-compete agreements. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 12 of 44 PageID: 3534 7 SAC 443031312v2 law provision.4 Instead, Plaintiff relies primarily on a readily distinguishable and unpersuasive decision, Diversant, LLC v. Carino, 2018 WL 1610957 (D.N.J. Apr. 2, 2018). Plaintiff’s reliance is misplaced. In Diversant, plaintiff sought preliminary injunctive relief against a former employee residing in California. There, although defendant resided in California, plaintiff adduced evidence regarding New Jersey contacts. Id. at *3. The Court therefore noted that, although there is “a litany of persuasive authority where courts declined to apply choice of law clauses in similar disputes,” the Court applied New Jersey law based on the limited record before it. Id. at *4. In contrast to this “litany of persuasive authority,” the Diversant Court further relied solely on one case in reaching its determination that California was not the “center of gravity” of the employment relationship, Chemetall US Inc. v. Laflamme, 2016 WL 885309 (D.N.J. Mar. 8, 2016). In Chemetall, defendant argued that, notwithstanding a New Jersey choice of law provision, Indiana had a greater interest in the litigation than New Jersey. Defendant 4 This policy against non-competes is so strong that, effective January 2017, California made it unlawful for employers to compel California employees to agree to contrary choice of law provisions, such as the one that Plaintiff seeks to enforce against Mr. Bakshi. See Labor Code § 925 (“An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would … [d]eprive the employee of the substantive protection of California law with respect to a controversy arising in California.”). Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 13 of 44 PageID: 3535 8 SAC 443031312v2 acknowledged, however, that he did not have an assigned territory, only half his clients were located in Indiana, that his supervisor was located in Ohio, and that he had no defined territory for his new employer. Id. at *7. Under these circumstances, the Chemetall court found that Indiana was not the “center of gravity” of the employment relationship, sufficient to overcome the contractual choice of law provision. This does not remotely suggest, contrary to the “litany of persuasive authority,” that California was not the center of gravity for Mr. Bakshi’s employment. Plaintiff further fails to inform the Court that, in construing the agreements at issue here, at least one other court over-ruled Plaintiff’s New Jersey choice of law provision based on almost identical facts, finding that Texas had a substantially greater interest in the litigation. In ADP, LLC v. Capote, 2016 WL 3742319 (W.D. Tex. Jul. 7. 2016)5, the Court held that, notwithstanding the choice of law provision, it would apply Texas law, because: (i) defendant accepted the terms of the restrictive covenants while living and working in Texas, (ii) the non-compete provisions prohibit defendant from accepting employment in Texas; (iii) defendant performed his employment duties in Texas; (iv) plaintiff has a Texas office, in addition to its New Jersey 5 Plaintiff initially filed the Complaint in New Jersey, but this Court transferred venue to the Western District of Texas. ADP, LLC v. Capote, 2015 WL 13447655 (D.N.J. Jul. 28, 2015). Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 14 of 44 PageID: 3536 9 SAC 443031312v2 headquarters; and (v) “at stake … is whether a Texas resident can leave one Texas job” for employment with “a competing Texas business.” Id. at *3. “In contrast, New Jersey’s ‘direct interest in the enforcement of the noncompetition agreement in this case is limited to protecting a national business headquartered in that state.’ As such, ‘the circumstances of this case leave little doubt, if any, that Texas has a materially greater interest’ than New Jersey in enforcement of the covenants contained in the RCAs.” Id. at * 4 (citations omitted). B. California’s Relationship to this Litigation is Substantially Greater Than New Jersey’s Connection. Mr. Bakshi’s employment is directly on point with ADP v. Capote, as well as the overwhelming authority cited above and in its moving brief, and readily distinguishable from Chemetall and Diversant. As the following chart makes clear, California has a significantly more substantial relationship to this litigation than New Jersey: ACTIVITY CALIFORNIA NEW JERSEY Mr. Bakshi’s residence 17 Years Never Mr. Bakshi’s clients Substantially all None Mr. Bakshi’s supervisors All None Mr. Bakshi’s client meetings Tens of thousands None Mr. Bakshi’s team meetings Regularly None Mr. Bakshi’s regional Routinely in California or other None Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 15 of 44 PageID: 3537 10 SAC 443031312v2 meetings western states Kickoff meetings Twice in 17 years Mr. Bakshi’s current employer Principal place of business None Mr. Bakshi’s current accounts Almost entirely in California, with a few in other western states None Location where Mr. Bakshi signed his agreements All None In a futile effort to obscure the fact that the center of Mr. Bakshi’s employment was California, Plaintiff misconstrues testimony, vaguely asserting, that at some unspecified time frame during his 17 years of employment, Mr. Bakshi had scattered telephone calls or meetings with New Jersey employees to discuss sales strategies. (Pb at 16-17). Contrary to Plaintiff’s tortured misconstruction of record evidence, Mr. Bakshi recalled that Michael Capone, ADP’s Chief Information Officer, accompanied him to a few client meetings, in California, to answer the client’s IT questions, and because Mr. Capone was “a very likable guy.” (Bakshi Tr. 254:7 to 269:16). Plaintiff cannot seriously contend that New Jersey law should apply simply because a few New Jersey employees travelled to California to accompany Mr. Bakshi on a handful of customer meetings in California. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 16 of 44 PageID: 3538 11 SAC 443031312v2 In short, as Courts throughout the United States have recognized, in this situation California has a substantially greater relationship to this dispute, and a material interest in enforcing its strong public policy against non-competition clauses in employment agreements. As California’s bedrock public policy guarantees its citizens the right to unfettered employment, Plaintiff’s attempt to deprive Mr. Bakshi of this right must be rejected. II. PLAINTIFF IS COLLATERALLY ESTOPPED FROM ENFORCING THE RESTRICTED STOCK AGREEMENTS. A. After a Full Opportunity to Litigate the Issue, Courts Have Determined that the Restrictions in Plaintiff’s Stock Agreements Are Unenforceable and Serve No Legitimate Interest. Even assuming that New Jersey somehow had a greater interest in the outcome of this litigation than California, Plaintiff is collaterally estopped from enforcing the restricted stock agreements (“RCA”). While Plaintiff cherry cites certain cases that it believes are favorable, it conveniently failed to advise the Court regarding cases that it litigated, and lost. As detailed in Mr. Bakshi’s moving brief, both this Court and New Jersey State Courts (where Plaintiff initially filed this action) have rejected Plaintiff’s requests to enforce the restrictive covenants contained in stock awards (“RCAs”) prohibiting solicitation of all 600,000 ADP customers – the exact same agreements that it seeks to enforce here – holding that the RCA’s are an unlawful restraint on fair competition. ADP, LLC v. Rafferty, 2018 WL 1617705 (D.N.J. Apr. 3, 2018) (Linares, J.); ADP, LLC v. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 17 of 44 PageID: 3539 12 SAC 443031312v2 Mork, supra; ADP, LLC v. Trueira, supra; ADP, LLC v. Kusins, Docket ESX- C- 264-15 (June 27, 2017). Plaintiff does not even attempt to address, much less distinguish, those cases. Instead, Plaintiff seeks to rely on cases in which the defendants never raised the issue of the enforceability of the RCAs, and the Court accordingly never reached that issue. Put simply, Plaintiff has repeatedly and unsuccessfully litigated the enforceability of the RCAs in both this Court and New Jersey Superior Court (where Plaintiff initially filed this action). Plaintiff should not be permitted to continue its serial litigations, with numerous unsuccessful bites at the apple, in the vain hopes that it can obtain a different decision, and then cite only those decisions that are favorable, and ignore any contrary ruling. B. The Doctrine of Collateral Estoppel is Designed to Preclude Precisely the Duplicative Litigation and “Aura of the Gaming Table” that Permeates this Action. It is axiomatic that the doctrine of collateral estoppel is intended to preclude a party from re-litigating an issue that the party had already litigated and that was determined adversely to the party against whom the doctrine is asserted. Parklane Hosiery Co. v Shore, 439 U.S. 322 (1979); Blonder-Tongue Labs. v. University of Illinois Foundation, 402 U.S. 313, 328-329 (1971); Kortenhaus v. Eli Lilly & Co., 228 N.J. Super. 162, 164-66 (App. Div. 1988); Allesandra v. Gross, 187 N.J. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 18 of 44 PageID: 3540 13 SAC 443031312v2 Super. 96, 103-104 (App. Div.1982). The doctrine of collateral estoppel will apply even when the present case involves a different defendant, but the party seeking to be collaterally estopped (the plaintiff) is the same, and the plaintiff had a full opportunity to previously litigate the same issue. “Defensive use of collateral estoppel precludes a plaintiff from relitigating identical issues by merely ‘switching adversaries.’” Parklane, supra at 329. The Supreme Court explained the sound policy behind this principle in Blonder-Tongue Labs., supra at 329, and reaffirmed in Parklane, supra at 328. The Supreme Court instructed: In any lawsuit where a defendant, because of the mutuality principle, is forced to present a complete defense on the merits to a claim which the plaintiff has fully litigated and lost in a prior action, there is an arguable misallocation of resources. To the extent the defendant in the second suit may not win by asserting, without contradiction, that the plaintiff had fully and fairly, but unsuccessfully, litigated the same claim in the prior suit, the defendant’s time and money are diverted from alternative uses -- productive or otherwise -- to relitigation of a decided issue. And, still assuming that the issue was resolved correctly in the first suit, there is reason to be concerned about the plaintiff’s allocation of resources. The Supreme Court further admonished that a plaintiff who already had a full opportunity to litigate an issue should not be permitted to re-litigate the very same issue against a new defendant, as this is inherently unfair and undermines the judicial system. Specifically, the Court held: Permitting repeated litigation of the same issue as long as the supply of unrelated defendants holds out reflects either the aura of the Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 19 of 44 PageID: 3541 14 SAC 443031312v2 gaming table or a lack of discipline and of disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules of procedure .... Although neither judges, the parties, nor the adversary system performs perfectly in all cases, the requirement of determining whether the party against whom an estoppel is asserted had a full and fair opportunity to litigate is a most significant safeguard. Blonder-Tongue, supra at 329; Parklane, supra at 328. New Jersey state courts have similarly held that collateral estoppel precludes the re-litigation of identical issues in subsequent litigation involving one of the parties to the prior litigation. Winters v. North Hudson Regional Fire and Rescue, 212 N.J. 67 (2012); Hernandez v. Region Nine Housing Corp., 146 N.J. 645, 658- 59 (1996); Zoneraich v. Overlook Hosp., 212 N.J. Super. 83, 93-95 (App. Div. 1986), cert. denied, 107 N.J. 32 (1986); Van Dissel v. Jersey Central Power & Light Co., 194 N.J. Super. 108, 121 (App. Div. 1984), cert. denied, 99 N.J. 186 (1984). The Courts’ repeated admonition against continued re-litigation, and cherry picking of only favorable results, could not be more apt. Plaintiff’s pattern of litigation against its former employees is well documented. See, e.g., ADP, LLC v. Ultimate Software Group, Inc., 2018 WL 1151713, at *3-6 (D.N.J. Mar. 5, 2018) (permitting counterclaims against ADP, arising from Plaintiff’s pattern of “sham lawsuits” and letters to former employees “despite knowing that the restrictive covenants drafted in its non-compete agreements with its former employees are Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 20 of 44 PageID: 3542 15 SAC 443031312v2 unenforceable or overbroad,” to “create a continuing ‘cloud’ over the heads of former employees.”). Plaintiff then cites those opinions that are most favorable (as it does in the instant case), while failing to disclose unfavorable precedent, such as Kusins. The Court should not countenance this gamesmanship and lack of candor. C. Courts Have Restricted Plaintiff’s Non-Compete Restrictions to Only Those Customers With Which the Former Employee Was Involved, and Not All 600,000 Customers, as Plaintiff Contends. Nor Has Any Court Granted Plaintiff’s Request to Prevent an Employee from Competing in the Employee’s Prior Territory, as Plaintiff Now Belatedly Demands. Similarly, the Essex County Chancery Division has held that, even assuming that the RCA’s are enforceable, ADP’s restrictive covenants must be blue-penciled to cover only those customers with whom the Defendant was exposed or involved, as set forth in the Sales Representative’s Agreement (and not all of Plaintiff’s 600,000 customers, as Plaintiff now urges). See, e.g., ADP v. Hopper, ESX-C-23- 16, transcript at 43-47 (Lurie Reply Cert. Ex. E) (“there is simply no way a prior employee of ADP could have the identity of the over 600,000 customers of ADP” and “if defendant is restrained from soliciting clients he had no knowledge of while employed by ADP, defendant will be deterred from interacting with almost all potential clients for fear that they may be unwillingly violating restrictive covenants entered into with ADP.”); see also ADP v. Karamitas, ESX-C-143-16, at 30-32 (attached as Exhibit H to the Certification of Robert H. Bernstein in Support of Defendant’s Summary Judgment Motion) (recognizing legitimate interest in Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 21 of 44 PageID: 3543 16 SAC 443031312v2 “preserving the customer information and relationships that Mr. Karamitas fostered while working at ADP,” and therefore enforcing the agreements only with respect to “clients, bona fide prospective clients, marketing partners or business partners of ADP with which I was involved.”) (emphasis added); see also Saturn Wireless Consulting v. Aversa, 2017 WL 1538157, at * 16 (D.N.J. Apr. 26, 2017) (“enforcement of the non-solicitation provision is reasonable only insofar as it is limited to restricting [defendant’s] business with [plaintiff’s] sales representatives and end-user customers with whom he personally worked during his employment with [defendant].” (emphasis in original); see also id. at * 16 (Plaintiff’s “reasonable interest in its customer relationships and goodwill from poaching by [defendant] extends only so far as protecting the specific relationships that [defendant] developed while at [Plaintiff].”) (emphasis in original). Indeed, recognizing that it had no legitimate interest in preventing former employees’ contact with its entire 600,000 customer pool, Plaintiff’s earlier non-competes explicitly limit the restriction solely to clients and prospects “of which [the employee] was involved.” Plaintiff further suggests (without any factual support) that Mr. Bakshi “develop[ed] relationships with ADP’s largest customers in the San Francisco Bay Area, Silicon Valley and Pacific Northwest,” and that he should accordingly be retroactively barred from engaging in any competitive activity, even with Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 22 of 44 PageID: 3544 17 SAC 443031312v2 customers with whom he never developed any relationship or for whom he had any confidential information. (Pb at 22). Plaintiff cites no authority for this broad proposition. In fact, while Plaintiff has aggressively sought to enforce non- competition agreements against numerous employees, it is significant that Plaintiff is unable to cite a single case in which any court, anywhere in the country, granted this unconscionable request. Mr. Bakshi respectfully submits that Plaintiff cannot simply wish away adverse rulings that its aggressive non-competes are unenforceable in whole or in part, in the vain hope that, if it continues to litigate against enough former employees (and conceal adverse decisions), it might obtain more favorable rulings. Accordingly, Mr. Bakshi respectfully requests that the Court deny Plaintiff’s application in its entirety, and grant Mr. Bakshi’s summary judgment motion. III. TO THE EXTENT THAT THE RESTRICTIVE COVENANTS ARE ENFORCEABLE (AND THEY ARE NOT), MR. BAKSHI DID NOT BREACH HIS OBLIGATIONS. As detailed above, Courts have enforced Plaintiff’s agreements only to the extent that they restrict solicitations of customers with which the former employee was involved, for one year following termination. See also August 23, 2000 Sales Representative’s Agreement (“Employee agrees that during the period commencing the date Employee becomes an employee of the Company and ending one year after the date Employee ceases to be an employee of the Company for any reason whatsoever (the “Non-Solicitation Period”), Employee shall not … Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 23 of 44 PageID: 3545 18 SAC 443031312v2 directly or indirectly, solicit, contact, call upon, communicate with or attempt to communicate with any Person which was a client or a bona fide prospective client of the ADP Group before the date Employee ceases to be an Employee of the Company (the “Termination Date”) located within a 75-mile radius of (i) any territory Employee managed or to which Employee was assigned or covered during the twelve months prior to the Termination Date and/or (ii) any office of the ADP Group in which Employee worked during the twelve months prior to the Termination Date, with a view to the sale (licensing or lease) of any software or service competitive or potentially competitive with any software or service sold, licensed, leased, provided or under development by the ADP Group during the two-year period prior to the Termination Date, provided that the restrictions set forth in this paragraph shall only apply to clients or bona fide prospective clients of businesses of the ADP Group with which Employee was involved or exposed.”) (emphasis added); see also September 25, 2008 Restrictive Covenant, September 22, 2011 Restrictive Covenant and September 29, 2012 Restrictive Covenant (restrictions “shall only apply to clients or bonda fide prospective clients of business of ADP with which I was involved”) (emphasis added). Moreover, the RCAs specifically restrict contacts only concerning products or services that compete with products or services that Plaintiff offered, or had under development, Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 24 of 44 PageID: 3546 19 SAC 443031312v2 during the prior two years. See id; see also September 23, 2013 Restrictive Covenant. As detailed below, Plaintiff has not adduced any facts demonstrating that Mr. Bakshi contacted any of his prior customers during the one year restrictive period and/or sold a competing product. A. Notwithstanding Plaintiff’s Attempts to Distort and Omit Critical Facts, There Are No Genuine Issues of Material Fact that Mr. Bakshi Breached Any Restrictions to the Extent They are Enforceable. The undisputed material facts demonstrate that Mr. Bakshi ensured that, while employed by Workday, he did not solicit any of the customers that he serviced during the last two years of his employment with Plaintiff. Unable to allege, much less show, that Mr. Bakshi traded on his relationship or confidential knowledge to Plaintiff’s detriment, Plaintiff resorts to vague allegations, misleading assertions and incomplete facts. Plaintiff does not remotely adduce any evidence from which it can be inferred that Mr. Bakshi may actually have breached any agreement (even assuming that they are enforceable). 1. Contrary to its Answers to Interrogatories, Where Plaintiff Properly Limited the Prohibited Contacts to Mr. Bakshi’s Customers During His Last Two Years, Plaintiff Now Seeks to Hold Mr. Bakshi Responsible for Contacts with Customers that It Never Claimed Were at Issue and For Which Mr. Bakshi had No Responsibility. In his Interrogatories, Mr. Bakshi asked Plaintiff to identify each “Client,” as that term is used in the broadest non-compete, “which Plaintiff contends Mr. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 25 of 44 PageID: 3547 20 SAC 443031312v2 Bakshi agreed not to solicit, divert, appropriate or accept any business form, or attempt to solicit, divert, appropriate or accept any business from … for the purposes of [providing] products or services that are the same as or substantially similar to those provided in the Business of ADP.” (Lurie Reply Cert., Ex. A). In response to that Interrogatory, Plaintiff replied: “ADP previously produced a list of those customers that Bakshi directly called upon within the two year period prior to his resignation from ADP.” (Lurie Reply Cert., Ex. B) (emphasis added). Tellingly, Plaintiff never identified any of the customers that it now claims that Mr. Bakshi improperly solicited. As Plaintiff cannot allege, much less adduce, a shred of evidence that Mr. Bakshi called on customers with whom he had a relationship, Plaintiff disingenuously seeks to change the rules of the game, and hold Mr. Bakshi liable, three years after his departure, for contacting Plaintiff’s clients with whom he had no business relationship, and for which Plaintiff cannot remotely claim that it has any legitimate interest in preventing. 2. Plaintiff Distorts the Record and Ignores Evidence Demonstrating that Mr. Bakshi Had No Contact with Certain Customers Either For the Two Years Before He Left Plaintiff or Within One Year Thereafter. Not only has Plaintiff engaged in a “bait and switch,” seeking to hold Mr. Bakshi responsible for contacting customers that Plaintiff never claimed were at issue, it has also ignored and distorted record evidence in a misguided attempt to Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 26 of 44 PageID: 3548 21 SAC 443031312v2 unduly restrict Mr. Bakshi’s activities (for which Plaintiff admittedly suffered no damages). A. For example, Plaintiff asserts that Mr. Bakshi called upon while employed by ADP as well as Workday. See, e.g., Pl. SOF 102-105. Plaintiff fails to mention, however, that Mr. Bakshi had only two contacts with this potential customer, approximately ten years before he left Plaintiff’s employment. (Lurie Reply Cert., Ex. C, Bakshi Dep. 141:2 to 143:22) Plaintiff further blithely neglects to inform the Court that: (i) this customer attended a Workday event, (ii) a Workday Vice President was a former employee of that customer, (iii) Workday’s partners had existing relationships with that customer, (iv) the Vice President who previously worked for the client introduced Mr. Bakshi to the client, and (v) the client was interested in a product other than international payroll. (Lurie Reply Cert., Ex. C, Bakshi Tr. 185:5-7, 199:3 to 200:13). Nor has Plaintiff even asserted that the contact occurred prior to the expiration of the restrictive covenants. B. Plaintiff further asserts that Mr. Bakshi improperly solicited . (Pl. SOF 105). Plaintiff never identified this customer in its answer to Interrogatories. Nor does Plaintiff claim that Mr. Bakshi ever had any contact with this customer while employed by Plaintiff. Rather, Plaintiff asserts only that, Redacted Redacted Redacted Redacted Redacted Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 27 of 44 PageID: 3549 22 SAC 443031312v2 at some unidentified time, Mr. Bakshi saw a public press release announcing that Agilent retained Plaintiff. (Pl. SOF 105). In an astounding lack of candor, Plaintiff also deleted relevant pages from Mr. Bakshi’s deposition transcript, in which he confirmed that, while employed by Workday, he did not meet with that client until May 2017, almost two years after he left Plaintiff’s employ, and almost one year after the restrictive covenants expired. (Lurie Reply Cert., Ex. C, Bakshi Tr. 198:22 to 199:2). Nor does Plaintiff even claim, let alone establish, that Mr. Bakshi met with them regarding a competitive product that Plaintiff sold during the prior two years. C. Plaintiff similarly claims that Mr. Bakshi received credit for , which purchased Workday’s enterprise technology. (Pl. SOF 106-107). Once more, Plaintiff never listed this entity in its answers to Interrogatories as a prohibited customer. Nor does Plaintiff assert that Mr. Bakshi had any involvement with that customer during Plaintiff’s employ. Plaintiff likewise fails to adduce any evidence that Mr. Bakshi had any contact with that customer while employed by Workday. Plaintiff also does not claim that the customer purchased a competing product from Workday; rather, Plaintiff admits that the customer used Plaintiff for payroll services, and purchased unrelated enterprise technology from Workday. (Pl. SOF 106-107). Redacted Redacted Redacted Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 28 of 44 PageID: 3550 23 SAC 443031312v2 D. Plaintiff never identified in its answers to Interrogatories. Now, in opposition to Mr. Bakshi’s summary judgment application, it claims that Mr. Bakshi met with this customer at some point while in Plaintiff’s employ. (Pl. SOF 109-110). Plaintiff fails to advise the Court, however, that Mr. Bakshi last met with this customer in 2009, six years before he left Plaintiff’s employ. (Lurie Reply Cert., Ex. C, Bakshi Tr. 148:22-23). Plaintiff has likewise omitted the fact that, as the record evidence makes clear, Mr. Bakshi did not have any contact with this account until a phone call in the summer of 2016, almost a year after he left Plaintiff’s employ, and did not know that they were an ADP customer until November or December 2016, after the non-compete expired. (Bakshi Tr. 185:12 to 186:3). Nor does Plaintiff even assert that the customer purchased a competing product. In fact, the deposition testimony (which Plaintiff conveniently omits) makes clear that the customer purchased an integration tool that “Workday and ADP work on together, Workday represents and ADP helps build for Workday.” (Bakshi Tr. 191:10-21). Put simply, Workday and Plaintiff are collaborators, not competitors, for this shared customer, and Mr. Bakshi was not remotely involved in soliciting business away from Plaintiff. Redacted Redacted Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 29 of 44 PageID: 3551 24 SAC 443031312v2 E. Finally, Plaintiff alludes to one additional customer. (Pl. SOF 112-113). Once more, Plaintiff fails to note that Mr. Bakshi sold the customer payroll tax and garnishment services in 2011 or 2012, more than three years before his resignation. (Lurie Reply Cert., Ex. C, Bakshi Tr. 150:11 to 151:4). Plaintiff also omits the fact that the customer reached out to Workday, and that Mr. Bakshi did not solicit that customer. (Lurie Reply Cert., Ex. C, Bakshi Tr. 198:6-9) Further, the customer solicited Workday for enterprise technology support, and not regarding the payroll or garnishment services which ADP provided. (Lurie Reply Cert., Ex. C, Bakshi Tr. 198:10-18). Nor does Plaintiff assert that any contacts occurred during the one year restricted period. F. Summary of Lack of Evidence of Breach Regarding Belatedly Identified Customers. The following chart summarizes the record evidence regarding each of the customers that Plaintiff now claims are in dispute: Customer Identified by Plaintiff in Interrogatory Responses as Prohibited Customers Bakshi Contact while at ADP Bakshi Contact During First Year Following Resignation Damages Further Relevant Information No Twice in 2006, ten years before leaving None None Customer attended a Workday event. Workday Vice President was a Redacted Redacted Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 30 of 44 PageID: 3552 25 SAC 443031312v2 ADP former employee, who introduced Mr. Bakshi to . Workday partners had existing relationships with . Workday Vice President who previously worked for introduced Mr. Bakshi to the client. Client interested in product other than international payroll (for which Bakshi had contact ten years earlier). No None None None Mr. Bakshi learned of this customer through press release. No evidence that Mr. Bakshi sold competing product No None None None ADP alleges only that Mr. Bakshi received credit for this account; no Redacted Redacted Redacted Redacted Redacted Redacted Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 31 of 44 PageID: 3553 26 SAC 443031312v2 evidence that he ever met with, much less solicited, the account. No evidence that purchased competing product from Workday. No 2009, six years before leaving ADP Summer 2016, almost one year after leaving ADP; no knowledge it was ADP customer until after non-compete expired None Workday and Plaintiff were not competitors for this customer. Rather, they collaborated to solicit this customer for a shared solution, such that sale would help -- not harm --ADP No None None None Customer reached out to Workday; Mr. Bakshi did not solicit. Workday provided enterprise technology support; ADP provided payroll/garnish ment services. Redacted Redacted Redacted Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 32 of 44 PageID: 3554 27 SAC 443031312v2 In short, despite exhaustive discovery, Plaintiff’s summary judgment motion is remarkable for its lack of a reference to any prohibited act that occurred during the one year restriction. Tellingly, Plaintiff provides no dates for alleged impermissible contact by Mr. Bakshi during the one year restrictive period. Nor does Plaintiff claim, much less establish, that Mr. Bakshi sold competing products to such accounts, in violation of his Sales Representative’s Agreement. Rather, Plaintiff’s entire claim is based on a foundation set in quicksand: Mr. Bakshi’s decision to work for a competitor. As detailed in Mr. Bakshi’s moving brief, an employer has no legitimate interest in preventing lawful competition, including solicitation of customers by former employees who had no prior relationship with such customers. B. Contrary to Plaintiff’s Factually Unsupported Assertion, Mr. Bakshi Did Not Breach the Agreement by Retaining a Customer List. The Record is Undisputed that He Did So Solely to Ensure that He Did Not Call on Any of His Former Customers. In a misguided effort to create a false impression of improper activity, Plaintiff briefly mentions that Mr. Bakshi retained a list of his accounts for fiscal years 2014-2016 following his departure. (Pl. SOF 96). Remarkably, Plaintiff does not allege that he used or disclosed this list while at Workday, or present a shred of evidence from any of these accounts that they were contacted. This oversight is intentional: the record evidence makes clear that Mr. Bakshi retained Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 33 of 44 PageID: 3555 28 SAC 443031312v2 this solely to ensure that he did not inadvertently call on any of Plaintiff’s customers for which he was involved. It is also undisputed that Mr. Bakshi never shared this list with anyone at Workday. (Bakshi Tr. 120:23 to 121:1)6 (“Q. I want to know, my question is, did you provide anybody at Workday with a list of the accounts that you serviced during your last two years at ADP? A. No.”). If Workday assigned Mr. Bakshi an account that was on the list, Mr. Bakshi refused the account. (Bakshi Tr. 124:7- 21). Put simply, rather than breach the agreement, Mr. Bakshi’s retention of the list was to ensure that he complied with the restrictive covenants (to the extent enforceable). See also ADP v. Hopper, supra, at 52 (“The fact that [defendant] generated a list that includes the names of ADP clients or potential clients, however, by itself only is not sufficient to show any breach of Hopper’s obligations to ADP” and refusing to enter injunctive relief against defendant). In sum, Plaintiff fails to adduce any facts even suggesting that Mr. Bakshi breached his covenants (to the extent that they are even enforceable). Plaintiff’s summary judgment motion should be denied in its entirety, and Mr. Bakshi’s summary judgment motion should be granted. 6 Deposition transcript pages attached as Exhibit A to the Bernstein Certification in Support of Summary Judgment Motion [DE 56-4] Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 34 of 44 PageID: 3556 29 SAC 443031312v2 IV. THE COURT SHOULD DENY PLAINTIFF’S MOTION, AND GRANT SUMMARY JUDGMENT TO MR. BAKSHI, AS PLAINTIFF CANNOT ESTABLISH ANY DAMAGES A. Damages are an Essential Element of a Prima Facie Breach of Contract Case, and Summary Judgment is Warranted Where Plaintiff Cannot Establish Damages. Even if there were genuine issues of material facts over whether the agreements are enforceable (and there are not) and genuine disputes of material facts whether Mr. Bakshi breached them (there are not), Plaintiff’s claim must be dismissed for failure to establish a prima facie breach of contract claim, because the undisputed facts demonstrate that Plaintiff suffered no damages. More specifically, it is well settled that, to sustain a breach of contract claim, plaintiff must establish damages, and summary judgment is mandated where there are no damages. See, e.g., Coyle v. Alexander’s, 199 N.J. Super. 212, 223 (App. Div. 1985) (damages are an essential element of prima facie breach of contract claim); see also Lee v. Hudson Toyota, 2017 WL 2854517, at *4 (N.J. App. Div. July 5, 2017) (“Although plaintiff’s brief does not directly address the court’s dismissal of his breach of contract and common law fraud claims, his failure to present sufficient evidence supporting his damages claims is fatal to those claims as well.”); Deficcio v. Winnebago Industries, Inc., 2015 WL 5722724, at *5-6 (D.N.J. Sept. 29, 2015) (granting summary judgment where “plaintiffs failed to come forward with evidence to sufficiently demonstrate the necessary element of Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 35 of 44 PageID: 3557 30 SAC 443031312v2 damages under a breach of contract claim”); Kare Distrib. v. Jam Labels & Cards, 2012 WL 266386, at *3 (D.N.J. Jan. 30, 2012) (granting summary judgment where plaintiff offered only conclusory declaration for proof of damages); Tran v. Baik, 2009 WL 2143647, at *3 (D.N.J. July 14, 2009) (granting summary judgment on breach of contract claim where plaintiff produced no evidence of damages); U.S. Lubes, LLC v. Consolidated Motor Oils, Inc., 2008 WL 140798, at *5 (App. Div. Jan. 16, 2008) (“In cases involving alleged violations of agreements not to compete, damages do not have to be proven to a mathematical certainty, but to a reasonable certainty,” and affirming that plaintiff could not recover for defendant’s breaches in light of failure to establish damages); Barr & Sons, Inc. v. Cherry Hill Ctr, Inc., 90 N.J. Super. 358, 376 (App. Div. 1966) (in non-compete case, plaintiff must prove damages to a reasonable certainty). B. Unsurprisingly, Plaintiff Admits that It Has No Evidence of Damages, as Mr. Bakshi Never Breached Any Agreement. Here, Plaintiff has not even bothered to present any evidence of damages. After exhaustive and protracted discovery, Plaintiff has not identified a single lost customer, lost sale, or any other purported lost opportunities. Nor can Plaintiff remotely calculate, to a reasonable degree of certainty, any lost revenue that such speculative sales from its unidentified customers may have generated, as it is required to do. Plaintiff likewise does not even allege that it lost any such imagined opportunities as a result of Mr. Bakshi’s conduct. Indeed, Plaintiff’s Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 36 of 44 PageID: 3558 31 SAC 443031312v2 witnesses conceded that Plaintiff experienced no damages as a result of Mr. Bakshi’s employment with Workday. (Def. SOF 72). In short, Plaintiff commenced, and then vigorously pursued this action notwithstanding the fact that: (i) it does not even claim, much less offer evidence, that it has any damages; (ii) it never sought specific performance or injunctive relief; and (iii) the restrictions lapsed over two years ago. It is little wonder why it has delayed resolution. Accordingly, even assuming that the agreements are enforceable (and they are not), and that Mr. Bakshi impermissibly called upon his former customers (which he did not), the Court should dismiss this matter because Plaintiff has no damages, and Plaintiff has not timely pursued any request for injunctive relief. V. THE COURT SHOULD DENY PLAINTIFF’S REQUEST TO FURTHER EXTEND THE RESTRICTIONS, AS (I) THERE IS NO EVIDENCE OF BREACH, (II) ANY EXTENSION IS CONTRARY TO CALIFORNIA LAW AND (III) PLAINTIFF PLAYED GAMES AND INTENTIONALLY SAT ON ITS RIGHTS, TO MR. BAKSHI’S DETRIMENT Plaintiff’s suggestion that the Court should extend the restrictions for an additional year is frivolous. A. Mr. Bakshi Did Not Breach the Agreement. Most of the agreements that Plaintiff drafted and that are at issue, including the Sales Representative’s Agreements, do not contain any tolling provision. The few RCAs that contain a tolling provision state: “The restricted time periods … Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 37 of 44 PageID: 3559 32 SAC 443031312v2 shall be tolled during any time period that I am in violation of such covenants, as determined by a court of competent jurisdiction.” As a threshold matter, as detailed above, the RCAs are unenforceable as illegitimate restraints on trade. Even if they are enforceable, Plaintiff cannot establish that Mr. Bakshi breached any legally cognizable provisions of the restrictive covenants, much less the dates that any such imagined violation occurred. Accordingly, as there is no breach, the tolling provision is inapplicable. Further, Plaintiff has already received the benefit of the tolling provision, as this action has been pending for three years, during which Mr. Bakshi has not solicited his former customers. Plaintiff’s suggestion that this Court should now impose any additional tolling (resulting in removal of Mr. Bakshi from the territory that he has serviced for Workday for the past three years) is ludicrous on its face. B. Plaintiff’s Proposed Extension of the Restricted Covenants is Voidable by Mr. Bakshi, and Enforceable Only In California, Under California Law. Even assuming that Mr. Bakshi breached his agreement (and he did not) and that Plaintiff is entitled to tolling (which it is not), Plaintiff’s requested extension would be voidable under California law. California Labor Code § 925 explicitly provides that any contract “entered into, modified, or extended on or after January 1, 2017” cannot “deprive the employee of the substantive protection of California law with respect to a controversy arising in California.” Labor Code § 925 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 38 of 44 PageID: 3560 33 SAC 443031312v2 (emphasis added). Any such extension is voidable by the employee, and “shall be adjudicated in California and California law would govern the dispute.” Id. In short, Mr. Bakshi respectfully submits that this Court does not have the jurisdiction or authority to extend any restrictive covenant beyond its original one year period without violating California law. C. Plaintiff Waived Any Right To Specific Performance By Its Extraordinary Dilatory Conduct and Gamesmanship. Even assuming that Mr. Bakshi somehow breached his covenants (and he did not), and that the Court could extend the non-compete without violating California law, Plaintiff’s request is barred by its own dilatory conduct in seeking injunctive relief. Although Plaintiff filed this action almost three years ago, it never sought injunctive relief, and instead decided to wait until well after the covenants lapsed to request specific performance. Fundamentally, specific performance is an equitable remedy that is subject to the court’s discretion. Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588, 599 (App. Div.), certif. denied, 183 N.J. 591 (2005). New Jersey courts recognize two circumstances in which specific performance may be an appropriate remedy for a past breach of contract: (1) “when money damages are not adequate to protect the expectation interest of the injured party” and (2) “when an agreement concerns possession of property such as heirlooms, family treasures and works of art that induce a strong sentimental attachment.” Houseman v. Dare, 405 N.J. Super. 538 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 39 of 44 PageID: 3561 34 SAC 443031312v2 (App. Div. 2009). Specific performance may be granted where: (1) the contract at issue is valid and enforceable, (2) the terms of said contract are sufficiently clear such that the court can determine the duties of each party, and (3) enforcement of the contract would not be “harsh or oppressive.” Id. at 598-99. Moreover, a litigant that seeks specific performance “must show himself ready, desirous, prompt, and eager to perform the contract on his part.” Stamato v. Agamie, 24 N.J. 309, 316 (1957) (quoting Meidling v. Trefz, 48 N.J. Eq. 638 (E. & A. 1891)). Even where plaintiff has met its burden, specific performance may be denied under the doctrine of laches. Chaudhry Corp. v. City of Newark, 2011 WL 6782400, at * 5 (N.J. App. Div. Dec. 28, 2011). “Laches in a general sense is the neglect, for an unreasonable and unexplained length of time, under circumstances permitting diligence, to do what in law should have been done. More specifically, it is inexcusable delay in asserting a right.” Lavin v. Bd. Of Educ., 90 N.J. 145, 151 (1982) (quoting Atlantic City v. Civil Service Com'n of N.J., 3 N.J.Super. 57, 60 (App. Div. 1949)); see also Knorr v. Smeal, 178 N.J. 169, 181 (2003) (“The key factors to be considered in deciding whether to apply the doctrine [of laches] are the length of the delay, the reasons for the delay, and the changing conditions of either or both parties during the delay,” because “[t]he core equitable concern in applying laches is whether a party has been harmed by the delay.”) (internal quotation marks and citation omitted). Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 40 of 44 PageID: 3562 35 SAC 443031312v2 Here, there is no dispute that Plaintiff unreasonably sat on its rights, with the transparent attempt to extend the non-compete by needlessly prolonging this litigation. Consistent with common practice, Plaintiff could have applied for injunctive relief at the beginning of this litigation. Had Plaintiff diligently done so, it is likely that the Court would not have enforced the agreement for the reasons set forth above, and this case would have been concluded years ago. In the alternative, the enforceability of the restrictions would have been clear, and the restrictions, if any, would have expired well over two years ago. This Court should not reward Plaintiff for its tactical decision to forbear seeking injunctive relief for years. Put another way, if Plaintiff contends that monetary damages would not be adequate (as required for specific performance), it should have sought to protect its rights years ago, rather than wait until the conclusion of the litigation to finally seek to enjoin activities dating back almost three years, and improperly seek to restrict Mr. Bakshi’s activities for another year based on some imagined past or future “irreparable harm.” See, e.g., Smart Vent Products, Inc. v. Crawl Space Door System, Inc., 2016 WL 4408818, at *12 (D.N.J. Aug. 16, 2016) (two to seven month delay in seeking injunctive relief “knocks the bottom out of any claim of immediate and irreparable harm.”) (quoting Pharmacia Corp. v. Alcon Labs, Inc., 2014 F. Supp. 2d 335, 383 (D.N.J. 2002)); PTT, LLC v. Gimme Games, 2014 WL 5343304, at *3 (D.N.J. Oct. 20, 2014) (denying injunction when plaintiff sought Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 41 of 44 PageID: 3563 36 SAC 443031312v2 relief 11 months after filing litigation); Pfizer, Inc. v. Teva Pharm, USA, Inc., 429 F.3d 1364, 1382 (Fed. Cir. 2005) (delay “negates the idea of irreparability”); Warner Lambert Co. v. McCrory’s Corp., 718 F. Supp. 389, 393-95 (D.N.J. 1989) (seven month delay “conclusively refute[d]” claim of irreparable harm). Instead, Plaintiff elected to play games, keeping the cloud of the restrictions over Mr. Bakshi’s head, whereby Mr. Bakshi limited his activities for the past two and a half years. Mr. Bakshi should not be further burdened with the “harsh and oppressive” additional one year of restrictions (particularly as any unspecified information regarding Plaintiff’s customers is extraordinarily stale at this point, and would be of no use to Mr. Bakshi or Workday and, in any event, Plaintiff cannot point to any breach during Mr. Bakshi’s first year after leaving Plaintiff’s employ or to any damage that it suffered during the past two and a half years). D. Courts Refuse to Extend Plaintiff’s Restrictive Agreements Based on De Minimus Breaches. Even if Mr. Bakshi somehow breached his agreement based on Plaintiff’s unspecified de minimus contacts with Plaintiff’s customers (of which Mr. Bakshi was unaware), Courts refuse to enforce Plaintiff’s tolling provisions based on minimal breaches. See, e.g., ADP v. Karamitas, supra, at 44 (extending the non- compete “would be unduly burdensome on Mr. Karamitas and unwarranted, given the minimal nature of that single breach in this case.”); ADP v. Hopper, supra, at 63-64 (“The Court finds the plaintiff received the benefit of its bargain as to all of Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 42 of 44 PageID: 3564 37 SAC 443031312v2 the restrictive covenants. There is no evidence that Hopper violated any of his obligations aside from the one email sent over a year ago to restrict him for an additional 12 months in the Court's view would be unduly prohibited.”). VI. PLAINTIFF IS NOT ENTITLED TO ATTORNEYS’ FEES. As detailed in Mr. Bakshi’s brief in support of summary judgment, Plaintiff’s request for attorneys’ fees is fatally flawed on several independent grounds, and Mr. Bakshi will not re-hash those arguments here. Plaintiff’s application simply reinforces that its request for fees is frivolous. Plaintiff has not remotely demonstrated that Mr. Bakshi breached any contractual obligations. Nor has Plaintiff even attempted to suggest that it has been harmed in any way. Plaintiff nevertheless persists in this litigation, despite adverse rulings from other Courts regarding the same provisions, the “litany of persuasive authority” that California law governs, the lack of damages, Mr. Bakshi’s unrebutted testimony that he did not sell competing products to any of his prior customers during the one year restrictive period, Plaintiff’s gamesmanship in delaying its application for specific performance, and its pattern of sham lawsuits against other employees. Mr. Bakshi respectfully submits that Plaintiff’s request for attorneys’ fees should be denied in its entirety, and that Mr. Bakshi be permitted to file an application for attorneys’ fees in connection with this frivolous litigation. Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 43 of 44 PageID: 3565 38 SAC 443031312v2 CONCLUSION For the foregoing reasons, Mr. Bakshi respectfully requests this Court deny Plaintiff’s application for summary judgment, grant summary judgment in his favor, and dismiss the Complaint, in its entirety, with prejudice, with an opportunity to seek legal fees and expenses. Respectfully submitted, By: /s/ Robert H. Bernstein Robert H. Bernstein GREENBERG TRAURIG, LLP 500 Campus Drive Florham Park, New Jersey 07932-0677 Telephone: (973) 360-7900 Facsimile: (973) 301-8410 Email: bernsteinrob@gtlaw.com Attorneys for Defendant Dated: December 10, 2018 Case 2:15-cv-08385-CCC-MF Document 117 Filed 12/10/18 Page 44 of 44 PageID: 3566