Former Stryker Corporation sales rep Christopher Ridgeway and Stryker are still in federal court over the company’s firing of Ridgeway in 2013.
The company sued and accused Ridgeway and Biomet, Inc. of poaching other Stryker reps in New Orleans to join Biomet. Stryker also accused Ridgeway of running other medical device supply businesses on the side in Louisiana.
We wrote extensively about this story in October 2013. Read our story here.
Ridgeway countersued, claiming that Stryker did not have a non-compete agreement with him and had fabricated his signature on a fake non-compete agreement.
The case went to trial in a federal court in Stryker’s home state of Michigan. In February 2016, a federal jury found for the company and awarded Stryker $745,195 in damages on three counts: breach of contract, breach of fiduciary duty and a trade-secrets claim.
Ridgeway appealed to the U.S. Court of Appeals for the 6th Circuit, claiming that there never was a non-compete agreement and that Stryker fabricated the non-compete document used in his district court action. He said the District Judge made a mistake by not allowing two allegedly privileged emails showing Stryker knew Ridgeway had no non-compete agreement to be introduced as evidence at the trial.
Ridgeway also argued that the case should have been tried in a federal court in Louisiana where the alleged actions took place.
According to Ridgeway’s complaint reported by MassDevice, “The lower court should have applied Louisiana law to the noncompete agreement. Under Michigan’s conflict-of-law rules, a choice-of-law provision will not be enforced if another state has a more significant relationship to the parties and the transaction at issue, and has a fundamental policy that would be violated by application of the law chosen by the parties.”
“The Michigan choice-of-law clause fails because Louisiana had the closest relationship to the case and was the location of the risk the noncompete clause concerned: Ridgeway was a Louisiana citizen who sold Stryker products in Louisiana to customers located in Louisiana, and the enforcement of a noncompete clause affected his ability to make a living in Louisiana.”
“The law of Michigan, which favors noncompete clauses, is also contrary to Louisiana’s strong public policy disfavoring them, which has been expressed by a statute making them unenforceable absent narrow, specific exceptions not satisfied here. Thus, Louisiana law should have been applied to the noncompete clause’”
Regarding Ridgeway’s claim of the alleged doctored non-compete agreement, Ridgeway argues, “The district court also erred in excluding two allegedly privileged emails showing Stryker knew Ridgeway had no noncompete agreement.
“First, the court applied the wrong standard in rejecting Ridgeway’s argument that the privilege was waived under the crime-fraud exception. The court required Ridgeway to produce conclusive proof of fraud rather than merely showing a reasonable basis to suspect fraud as required under Michigan law. Even Ridgeway’s substantial evidence of Stryker’s misconduct was not sufficient to satisfy this test. This alone is reversible error. The court also ignored Ridgeway’s argument that Stryker waived the privilege by voluntarily placing the validity of Ridgeway’s noncompete agreement in dispute.”
Oral arguments were scheduled for this month.
