Poer v. FTI Consulting, Inc.

Background

Eric Poer sued his former employers, FTI Consulting, Inc. and FTI, LLC, challenging noncompete and non-solicitation provisions in a March 2020 employment agreement. The agreement barred him for 12 months after leaving FTI from working for a competing business in a similar capacity, soliciting business concerning matters on which he worked for FTI, inducing FTI employees to leave, or soliciting certain FTI clients. The agreement also required application of Maryland law.

Poer began working for FTI in 2011 and initially worked at or was identified with FTI’s San Francisco office. In 2019, he moved to Nevada and recorded his work-from-home status and tax jurisdiction as Nevada. The 2020 agreement listed Las Vegas, Nevada, as his office location. Poer left FTI on May 23, 2024, and about a week later began working for Secretariat Advisors, LLC. FTI sent him a demand letter alleging that he had breached the restrictive provisions and seeking approximately $3 million in damages.

Poer’s lawsuit asserted that the agreement violated California Business and Professions Code sections 16600(a) and 16600.1(a), and that FTI’s attempted enforcement of the provisions violated California’s Unfair Competition Law. He sought declarations that specified agreement provisions were unlawful, unenforceable, and void, along with an injunction against their enforcement.

FTI’s motion to dismiss

FTI moved to dismiss for lack of personal jurisdiction and improper venue, or alternatively to transfer the case to the District Court for the District of Columbia.

The court held that FTI was not subject to general personal jurisdiction in California because it was not incorporated there and did not have its principal place of business there. The court nevertheless found specific personal jurisdiction. FTI had purposefully conducted business in California, including through eight physical offices. Poer’s claims also arose out of or related to FTI’s California activities because his employment involved California-based clients and direct reports, access to FTI’s San Francisco office, and FTI’s representation that he was a San Francisco-based employee.

The court further concluded that exercising jurisdiction was reasonable. Although some witnesses would need to travel to California and the District of Columbia might be more efficient for some participants, FTI had substantial California business, California was a convenient forum for Poer, and FTI had not shown that litigating there would be so burdensome as to violate due process. The court therefore denied FTI’s motion to dismiss for lack of personal jurisdiction.

The court also denied FTI’s motion to dismiss for improper venue. It reasoned that FTI had sufficient contacts with the Northern District of California for venue purposes, particularly because the jurisdiction analysis centered on activities in San Francisco.

Motion to transfer

The court denied FTI’s alternative motion to transfer venue to the District of Columbia. FTI had not shown that the District of Columbia had personal jurisdiction over Poer or that transfer would serve the interests of justice. The court gave weight to Poer’s choice of California, FTI’s California offices, the California connections to his employment, and the fact that the case involved questions of California law. FTI’s general references to witnesses and evidence in the District of Columbia did not establish that transfer was warranted.

Preliminary injunction

Poer sought a preliminary injunction preventing FTI from enforcing the restrictive covenants. A preliminary injunction is temporary relief available only when the moving party makes a clear showing of likely success on the merits, likely irreparable harm without the injunction, favorable balancing of hardships, and consistency with the public interest.

The court applied California’s choice-of-law framework. Maryland had a substantial relationship to the parties and transaction because FTI Consulting, Inc. was incorporated in Maryland and FTI, LLC was organized under Maryland law. The court recognized that Maryland and California had conflicting rules: California generally voids noncompete provisions, while Maryland permits reasonable restrictive covenants.

The court concluded, however, that California did not have a materially greater interest than Maryland in deciding whether Poer’s restrictions were enforceable. Poer was no longer a California resident, his 2020 agreement identified Nevada as his office location, his tax status reflected Nevada, and he had performed more than 95 percent of his work outside California during the relevant period. The court also found that Poer had not shown he was a California employee at Secretariat, whose agreement stated that he would work primarily from Las Vegas. Maryland’s interest was substantial because FTI was incorporated or organized there and the parties agreed to Maryland law.

Because Poer had not shown a likelihood of success on the merits, the court did not need to address every remaining injunction factor. It also found that Poer had not clearly shown irreparable harm. He continued to pursue his profession, although with restrictions, and did not show that the restrictions threatened his livelihood, damaged his reputation, or caused comparable harm. The court therefore denied Poer’s motion for a preliminary injunction.

Disposition

The court granted FTI’s requests for judicial notice, denied FTI’s motion to dismiss, denied FTI’s motion to transfer venue, and denied Poer’s motion for a preliminary injunction. The order set a case-management conference for January 9, 2025, and stated that it disposed of Docket Nos. 18 and 20.