it's pretty early where he lives out california so let me tell you about california but before i do i'd like to reserve three minutes for rip up by california was the purpose for the employment agreement in this case without california there would have been no employment for mr flaherty to self i purchased roofing products in california and to build a sales team in california to do so even though he was living in arizona was at the beginning of a contract meaning he was living in the arizona your honor he had just moved from california to arizona and when there were discussions about the job with seaman corp it was all about california they wanted him in the california market to build a sales team in california and that's what he did that's the place where he lived for over thirteen years and works in the state whose interest will be most affected by resolution of the dispute over the restrictive covenants in the employment agreement but for the substantial performance of the employment agreement in california there was no job and thus no employment agreement with semen from mr fla because of this whether the choice of law provision in paragraph eleven dollars of the inc remit was affective or not the district court erred in holding that ohio rather than california law applies to the dispute over the employment agreements restrictive but not compete on solicitation in confidentiality restrictions is your role what your role is your role mean that for every single employee of a company unless they actually do business in ohio they're never governed by this all out while provision in the contract yeah the way it's written your honor is the individual must have lived in ohio at some point d in order to have more of what is where does it say that it is the language in the employment agreement says that the agreement is made in ohio is to be construed and interpreted in the courts with the laws of the state of ohio irrespective of whether employee moves from ohio it's just meant to being inclusive so it covers you whether you live in a how or whether you don't live in ohio you know well whether the choice of what provision in that paragraph was effective or not that this record erred in the whole holding that ohio rather than california law plots and even if ohio law applies that district court misapplied it because it is you'd an overbroad injunction that bars mr flaherty from working even in a noncompetitive non roofing role for any company that has both roofing and other non competitive lines of business the injunction is contrary to ohio law that requires restrictive covenants to prohibit only competition that is unfair meaning the restrictive covenants can only be enforced to the extent necessary to protect the employer's legitimate interests otherwise such covenants are unlawful under ohio law because they overreach to prohibit fair competition seaman has no legitimate interest in barring mr flaherty from working in a non roofing role for a new diversified employer that has lines of business that are both competitive and noncompetitive it would seem so great excuse me could the district court's injunction bar mr flaherty from working for soup last in any capacity but but but you're saying he could he should be able to work for another company is that what you're saying well yes your honor he should be allowed to work for any other company that is that has not been competitive lines of business with seamen and that includes sea class  we presented evidence to the district court that mr flaherty is prepared to and ready to see classes ready to have him work in another division of the company where he would be selling products that are applied to the ground not information information related to his commissions for example so we can figure out if it was paid correctly these are disputed issues but regardless the the injunction is prospect of looking and mr only going to be working in relation to nine roofing problems products that are applied to the ground and so there really is no interest that statement has in prohibiting him from working in that line of business even up under the inevitable disclosure doctrine which the ohio supreme court hasn't even officially adopted that has to be a substantially similar position in order for the inevitable disclosure doctrine to apply and so here he would not be working in a substantially similar position with c class and so therefore and of disclosure and a broad based injunction that would prohibit him from working in a capacity in a restraining order and there was evidence presented during the course of the injunction hearing that mr flaherty also would work for c class in a in a division that was not on roofing now was the argument presented  work for you know noncompetitive lines of business or noncompetitive companies but then at the same time i'm sorry what's the problem well the problem is the question as to whether it was presented to the district court the fact that the district court was aware of something that it could have used if you had made the argument is the same as whether you made the  you didn't make the argument or you did well i believe you know hey we made the argument in the mode of you're making art and you say you made the argument where did you make the argument supposed to include in a statement of facts on the basis of which you  i'm not sure i understand the question or you can say ten facts and not make an argument based on those facts possible for a lawyer to do that is that what you did here or did you actually make an argument based on those facts you say i guess through as the court as the case on remand before he's finally resolved well i don't i don't think it would be appropriate on on remand your honor because this is an issue of a lot that that this court injunction i believe we could i believe we could yes if we were to apply california law would that apply to more than the th compete argument i don't believe so your honor if it applies to the  the restrictive covenants in the employment agreement it applies to compete non solutions haitian and overbroad confidentiality restrictions so california law would prohibit all of that under your interpretation be of the restatement of conflict of laws california law applies to this dispute under that section of the restatement ohio law regarding the enforceability of restrictive employment covenants is contrary to fundamental policy of california embodied in section sixteen thousand six hundred ohio law disfavors restraints on trade but still in forces restrictive covenants that are deemed reasonable of the restatement california has the most significant relationship to the transaction in the parties and it's why the parties relationship in the employment agreement exist california has a materially greater interest in this dispute greater than ohio under section one hundred and eighty seven location of performance is a primary consideration in determining which state may have a materially greater interest as the court noted in stone surgical the place of performance  location of the subject matter non competition restrictions are the place where the employee is restricted from engaging in certain activities here california is where mr flaherty substantially perform the work under the employment agreement and where semen operated and enjoyed the benefits of that work for over thirteen years california is the state where mr flaherty intends to work now and in the future and california is the state where the performance of the restrictive covenant think under the facts of this case your honor there there is no clear and convincing evidence on certain elements of the tortious interference claim and therefore there is no basis it actually was an abuse of discretion for the competitors in the ripping membrane market and that theme and therefore had a legitimate interest in protecting and ensuring that one of their top sales managers did not work in a for direct competitor in any capacity this court also found that mr flaherty demonstrated an eagerness even before he started working for the plants to share his intimate knowledge of siemens pricing customer and product information to age that class in any manner that he yes so let me just address the race below issue st the transcript speaks for itself mr flaherty testified at the primary junction hearing that he intended to work as a regional sick california retail sales market for posner and he pointed at closing argument and encouraged the court to read that closing argument they did not make that argument and the argument they asked the only thing they asked for is that it is limited that there be no injunction and that is simply be a restriction on  trade secrets there are no argument about him working in a different capacity so we do not think that that was richer for appeal but many event that would be were entitle to have the injunction in force in accordance with the plain terms of the company eat and that bars him from working for competitor you know in this case is a classic example even before he started working as a salesman he's already feeding them information and he has intimate knowledge humans business and decisions in which the court said that you that it is permissible to enforce that covenant not to compete in a situation where you're trying to prevent the disclosure treat and here we've got a number of interest and we're seeking to advance that certainly one of it's  from sharing his intimate knowledge of him and you know this was a high level manager had direct access to all kinds of confidential rationing work there for fourteen years so they certainly have an interest in ensuring that he doesn't work for a direct competitor in any capacity and you know the other point i was about to make is that the ditch a court found that this would not impose a hardship on mr clarity because he in fact had a negotiated a financial package with simple ass in which he guaranteed that he would be paid two hundred and forty thousand dollars even if seaman were successful in forcing the non competition agreement and that was a major exclusively in ohio but i'm trying to figure out how muscular your reading is is there an example of any employee who would who wouldn't be covered by the agreement is there any certain fact circumstance where law would no your honor there wouldn't be any circumstance i mean that the language is not ambiguous it's very clear says that quote the remit must be construed and interpreted in court the lot of the state of ohio there is no other law that's reference in except if you wanted to have that meaning the language would have been irrespective of whether employees lives in ohio when i think your position would be clear that the st clause says remains to be construed interpreted in court the laws of the state of ohio and if we had a hypo irrespective of whether the employee lives in ohio that is clear it doesn't really matter where the employee lips but this language is very peculiar it says irrespective of whether employee moves from ohio suggesting that the employee to be covered has to have lived in ohio and then moved somewhere else or lived in ohio and stayed living in ohio well i think the it respected your honor to answer that question i think that irrespective means it doesn't matter so it's not intended to be yelling that i think that or whether he moves from ohio not doesn't say it doesn't matter whether he to that high law doesn't apply in other words irrespective says that fact is somebody like to have it for how it doesn't matter if they move but it doesn't intend to make it a condition precedent that it applies only if the employee lives in ohio so in other words irrespective means that it doesn't matter whether the person moves plies regardless of where if the person lives or moves from ohio so how pathetically this is and i know this is not the case hypothetically if flirty had been a california resident at the time of the signing of this a great employment agreement and calyx and clarity had always lived in california and the intent was that rarity work in alaska law applied didn't well your honor i had thought about that hypothetical i know that if you were in the form states you would apply ohio's choice of conflict laws and ohio doesn't force  as well as down like case in both of those cases the court looked at one of the seventy two dollars and said it's a limited exception and that the form states has an interest in protecting one of its businesses that's competing in the global economy so in this case a higher being a form state has a legitimate interest in protecting seamen where our democracy in the global economy and what the court found is that the employees interest with not materially greater than the form states interest in california resident so there still are cases you know those cases say that it doesn't matter at all what the facts are one as long as it's a company that's based in the form state well i mean the facts always matter to some extent but it does say it doesn't it is a comparison between the form states interest versus the employer where the employer resides interest and you have to show that it was materially greater and employees you're saying because we look at the choice of law rule of the foreign state we can put a heavier weight on the foreign state's interest in protecting its citizen i e the company as in the down like case the court found that it was not materially better now you know the one thing i want to point out and we're going to read is that even if there was no choice of law clause it's not at all clear that california law would apply when you're looking at the was well you know again that's counter to what the just court found and that's on page ten just records of tenant she found that he was he had no plans to move there and if you read the testament record there's actually conflicting testimony on that question seaman's witnesses said they did not they always discussed you know whether he could operate from his base in arizona and that with the discussion at that point in time his place of performance the same as residence have been managing a fourteen state region from his home in arizona talking about issues that we don't need to reach i want to ask you whether there's any point to our look success on the merits she st looked at the preacher contract claim and found that we were likely succeed on the merits she also found that we like to see the merits on the misappropriation of trade secrets claim and they don't that's not that's not before and they did hard time seeing how it's related to likelihood of success on the merits because it's not related to the likelihood of success on the merits with respect to an a request for relief first i see i see your point your hon because i think that the corporate merely just record primarily relied upon the breach of contract and the misappropriation of trade secrets claims as the like of success on the merits that justify the injunction she did add that we also are like that succeed on the tortious interference cl and so it but we don't need to reach that i agree because they don't they do not now and that's all i'm asking both sides you say we don't need to reach it's because they're not challenging the finding that it was like that succeed on the merits of misappropriation claim and that shareholder remit concerning ownership and governance of an ohio corporation and the purpose of which was to protect the shareholders of an ohio close corporation the court down white house that ohio's interest was the protection of a closely h business operating in a global economy and the district court nec case observed that substantial performance in this year over agreement likely occurred in ohio where the purpose of the employment agreement was mr larry's employment by a personal services contract not a contract for the protection of shareable and down like the shareholder agreement was and into after a year of drafting discussions and meetings here at the employment agreement was dumped on mr larry after  already quit his prior job furthermore the choice of law provision in the shareholder agreement and down like not only clearly chose ohio law but also specifically refer to ohio corporation law it was clear and unequivocal  choosing ohio law here not so much unlike down white house interest that state in this case is not the protection of shareholders but a generalized interest in freedom of contract or in protectionism of ohio businesses in the circumstances of restrictive covenants freedom of contract or the general interest in protecting ohio businesses would mean employers can impose whatever restrictive covenants they can negotiate but ohio recognizes  competing generalized interest that restraints in trade or disfavor and thus restrictive governance are governed by a general result with this standard i guess you could say that it's compared ohio i'm sorry it's the appeared to california's bedrock policy ohio's interest is equivocal and very under these circumstances california's interest is materially greater the court's decision in stone surgical is also distinguish the house sabol and district court decisions from the circuit cited in our briefs are more closely aligned with this  your honor judge moore you raise the issue about alaska alaska would not fly because in your hypothetical because alaska what i had no substantial relationship to the agreement here the reason why the parties had a relationship in the employment agreement exists that it was focused on california thank you thank you both for your argument and the case will be submitted