Civil Practice – Venue – Labor & Employment – Employment Contract – Prior Lawsuit – Arbitration

Talisman Software, Systems & Services, Inc. v. Atkins (Lawyers Weekly No. 020-003-16, 15 pp.) (Gregory McGuire, J.) 2016 NCBC 1

Holding: The defendant-CEO’s employment contract with the plaintiff-employer requires that related lawsuits be brought in England; however, several of the employer’s claims arise out of a previous lawsuit that the CEO filed in Durham County Superior Court. It would be unfair and unreasonable to require the employer to go to England to pursue its claims arising from the CEO’s alleged failure to return all funds to the employer following the resolution and dismissal of the previous lawsuit.

Defendant’s motion to dismiss for improper venue is denied in part and granted without prejudice in part. The court declines to compel arbitration.

The previous lawsuit was dismissed based on the understanding that defendant had accounted for and returned all of plaintiff’s funds. Plaintiff’s current attempts to recoup such finds do not arise under the parties’ employment contract, and plaintiff should not be bound by the forum selection clause with regard to these claims. Plaintiff’s claims for conversion and negligent representation arise from defendant’s conduct during and following the previous lawsuit and are not subject to the forum selection clause.

However, plaintiff’s claims for breach of fiduciary duty, breach of contract, and constructive trust can fairly be characterized as arising from or under the employment contract and are encompassed within its forum selection clause. Defendant’s motion to dismiss is granted as to these claims, and they are dismissed without prejudice.

A shareholders’ agreement signed by defendant and by plaintiff’s parent company includes an arbitration clause. This arbitration clause cannot be interpreted as binding on plaintiff as the subsidiary of a signatory of the shareholders’ agreement. Plaintiff’s claims against defendant do not arise from any obligations placed upon defendant by the shareholders’ agreement. The parties do not have an agreement to arbitrate.

Motions denied in part and granted without prejudice in part.