Add-On Computer Peripherals, LLC v. Harris

Background

Add-On Computer Peripherals, LLC, a California limited liability company with its principal place of business in Tustin, California, sued Mary Harris. The opinion states that AddOn sells fiber optical networking equipment and operates two Minnesota offices, which are its only offices outside California.

Harris lives in Ohio. She began working for ProLabs USA, Inc. in 2015 and signed a confidentiality, non-solicitation, and non-competition agreement with ProLabs. After ProLabs merged with AddOn, Harris became an AddOn employee. In March 2018, she signed a separate confidentiality and proprietary-rights agreement with AddOn. That agreement required actions to enforce it to be brought only in a state or federal court in Orange County, California, and stated that it superseded prior and contemporaneous agreements concerning the same subject matter.

Harris resigned from AddOn in July 2019 and began working for Axiom Memory Solutions, Inc., which the complaint identifies as an AddOn competitor. AddOn alleged that Harris solicited its customers and employees and misappropriated, used, and disclosed its trade secrets and confidential information. Harris moved to dismiss for lack of personal jurisdiction or improper venue, or alternatively to transfer the case to the Central District of California, Southern Division.

Court’s Analysis

The court considered transfer under 28 U.S.C. § 1404(a), which allows a federal court to transfer a civil case to another federal district where the case could have been brought when convenience and the interests of justice favor transfer. The court said it could consider transfer without deciding whether it had personal jurisdiction over Harris.

The court found that the California forum-selection clause—the contract provision choosing where covered disputes must be litigated—controlled the transfer analysis. The court determined that AddOn’s claims at least partly sought to enforce the AddOn Agreement because that agreement addressed confidential and trade-secret information. The court therefore found that the California clause applied and that venue was proper in the Central District of California.

The court also concluded that the convenience of the parties strongly favored California. AddOn had agreed to a California forum, AddOn was located in California, and Harris worked for a California company and regularly traveled to California. The convenience of witnesses also favored transfer because Harris showed that most witnesses lived and most relevant documents were located in California.

The court found that the interests of justice favored transfer as well. It emphasized that the dispute involved a California company seeking to restrict a former employee who worked in California, and that AddOn’s choice of Minnesota was entitled to less weight because of the California forum-selection clause. The court did not decide the broader question of whether enforceable provisions of the ProLabs Agreement remained in effect. It also declined to decide personal jurisdiction.

Disposition

The court granted in part Harris’s Motion to Dismiss and/or to Transfer. It ordered that the case be transferred to the United States District Court for the Central District of California, Southern Division, and directed the Clerk of Court to carry out the transfer. The court stated that, even if venue in Minnesota were improper and dismissal were legally available, dismissal would not be warranted and transfer was the better approach.