Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02449/USCOURTS-caed-2_06-cv-02449-2/pdf.json

Parties Involved:
Advanced Care Technologies, Inc.
Defendant
BrachySciences, Inc.
Defendant
Paul Davis
Plaintiff
World Wide Medical Technologies, LLC
Defendant

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

PAUL DAVIS, 

 Plaintiff, 

 v. 

ADVANCED CARE TECHNOLOGIES, 

INC., WORLD WIDE TECHNOLOGIES, 

LLC, and BRACHYSCIENCES, INC., 

 Defendants. /

No. Civ. S-06-2449 RRB DAD 

Memorandum of Opinion

and Order

Paul Davis (“Davis”) filed an action against his former 

employers Advanced Care Technologies, Inc. (“ACM”), World Wide 

Medical Technologies, LLC (“World Wide”), and BrachySciences, 

Inc. (“BrachySciences”) (collectively “Defendants”) seeking a 

declaration that a covenant not to compete in his employment 

contract is invalid and unenforceable under California law. 

Davis now moves for summary judgment on the ground that the 

covenant not to compete is void as a matter of law. Defendants 

filed a joint opposition and cross-motion for summary judgment 

contending that Connecticut law is controlling and that the 

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covenant not to compete is valid and enforceable as a matter of 

law.1 For the reasons stated below, the Court GRANTS the 

motion.2 

I. BACKGROUND 

 From 2003 until October 2006, Davis worked as a sales 

representative and sales manager for Defendants, a coalition of 

related pharmaceutical companies that collectively develop, 

market, sell and distribute radioactive seeds, delivery systems 

(e.g., needles) and ancillary equipment used in brachytherapy3

implants for the treatment of early stage prostate cancer. 

1 Davis argues that Defendants’ cross-motion for summary 

judgment, filed jointly with the opposition to Davis’ summary 

judgment motion, was untimely and should be disregarded. 

Defendants’ filed the joint opposition and cross-motion on July 

25, 2007, more than two weeks after the court’s July 6, 2007 

deadline for dispositive motions. Because the court did not 

grant Defendants leave to file the late cross-motion for summary 

judgment, it is untimely. Therefore, the court treats 

Defendants’ motion as an opposition to Davis’ motion for summary 

judgment. See Martinez v. Home Depot USA, Inc., 2007 WL 926808, 

*2 (E.D. Cal. 2007). 2 Inasmuch as the Court concludes the parties have submitted 

memoranda thoroughly discussing the law and evidence in support 

of their positions, it further concludes oral argument is 

neither necessary nor warranted with regard to the instant 

matter. See Mahon v. Credit Bureau of Placer County, Inc., 171 

F.3d 1197, 1200 (9th Cir. 1999)(explaining that if the parties 

provided the district court with complete memoranda of the law 

and evidence in support of their positions, ordinarily oral 

argument would not be required). As a result, the oral argument 

presently scheduled for Wednesday, August 8, 2007, at 10:00 

a.m., is hereby VACATED. 3 Brachytherapy is a form of radiotherapy commonly used to 

treat prostate cancer whereby a radioactive source is placed 

inside or next to the cancerous area requiring treatment. 

Def.’s UMF ¶ 2.

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Pl.’s Stmt. of Undisputed Material Facts (“UMF”) In Support of 

Pl.’s Mot. for Summary Judgment/Adjudication (“MSJ/MSA”) ¶¶ 3, 

5, 25 & 32; Def.’s Stmt. of Undisputed Material Facts (“UMF”) In 

Opp. to Pl.’s Mot. for Summary Judgment/Adjudication (“MSJ/MSA”) 

¶ 1. Defendants are related entities insofar as they share 

common ownership, maintain centralized personnel policies and 

practices, and are headquartered and maintain their principal 

place of business in Connecticut. Def.’s UMF ¶¶ 3 & 7. 

 Davis is a former sales representative and sales manager of 

Defendants assigned to the western region of the United States 

and based out of California. Pl.’s UMF ¶¶ 1-3, 5 & 8. In 

January 2003, Davis was hired as a sales representative for 

World Wide. Pl.’s UMF ¶¶ 3-5. Shortly thereafter, in July or 

August 2003, Davis signed an Employee Confidentiality and NonCompetition Agreement (“Non-Competition Agreement”). Pl.’s UMF 

¶ 11; Def.’s UMF ¶ 16. This agreement forbids Davis from 

revealing trade secrets or working for a competing company for 

two years after leaving Defendants’ employ. Pl.’s UMF ¶¶ 14-15. 

This agreement also states that it shall be interpreted and 

construed in accordance with the laws of Connecticut. Def.’s 

UMF ¶ 19; Pl.’s UMF ¶ 16. 

 On January 1, 2005, Davis was promoted to Regional Sales 

Manager for ACT. Def.’s UMF ¶ 20. In that capacity, Davis was 

responsible for all of Defendants’ sales activities in the 

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western United States, including California, Washington and 

Oregon. Def.’s UMF ¶ 21. As a management-level executive, 

Davis had access to virtually all customer data and 

technological know-how accumulated and maintained by Defendants, 

including a contact management system containing client data 

such as the names and contact information of all clients, 

prospective clients and leads, as well as other information 

concerning specifications, contact points and other client 

needs. Def.’s UMF ¶ 27. 

 In October 2006, Davis resigned and became the western 

regional sales manager for IsoRay, Inc. (“IsoRay”), a direct 

competitor of Defendants. Def.’s UMF ¶¶ 33-34; Pl.’s UMF ¶ 32. 

This position was based out of California. Pl.’s UMF ¶ 33. 

Aware that Defendants’ had sought to enforce noncompetition agreements against other employees, Davis filed a 

declaratory relief action against Defendants in Sacramento 

County Superior Court in October 2006 seeking a determination of 

the enforceability of the non-competition agreement under 

California law. Notice of Removal ¶¶ 1-18. On November 3, 

2006, Defendants removed the action to federal court on the 

basis of diversity. Notice of Removal ¶¶ 1-18. 

On December 20, 2006, Defendants commenced a state action 

against Davis and IsoRay in Connecticut asserting the following 

claims: (1) breach of contract; (2) tortious interference with 

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business relations; (3) tortious interference with contractual 

relations; (4) violation of the Connecticut Unfair Trade 

Practices Act; and (5) violation of the Connecticut Uniform 

Trade Secrets Act. Pl.’s UMF ¶ 18; Exh. F, attached In Support 

of Pl’s MSJ/MSA. 

II. DISCUSSION 

A. Legal Standard 

Federal Rule of Civil Procedure 56(c) provides for summary 

judgment when “the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the 

affidavits, if any, show that there is no genuine issue as to 

any material fact and that the moving party is entitled to 

judgment as a matter of law.” Fed. R. Civ. P. § 56(c). 

The moving party bears the initial burden of demonstrating 

the absence of a “genuine issue of material fact for trial.” 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). A 

fact is material if it could affect the outcome of the suit 

under the governing substantive law. Id. at 248. A material 

fact is “genuine,” if the evidence is such that a reasonable 

jury could return a verdict for the nonmoving party. Id. The 

burden then shifts to the nonmoving party to establish, beyond 

the pleadings, and by his or her own affidavits, or by the 

depositions, answers to interrogatories, and admissions on file, 

specific facts showing that there is a genuine issue for trial. 

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Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (internal 

quotation marks omitted). 

“‘When the party moving for summary judgment would bear the 

burden of proof at trial, it must come forward with evidence 

which would entitle it to a directed verdict if the evidence 

went uncontroverted at trial. In such a case, the moving party 

has the initial burden of establishing the absence of a genuine 

issue of fact on each issue material to its case.’” Miller v. 

Glenn Miller Productions, Inc., 454 F.3d 975, 987 (9th Cir. 

2006) (quoting C.A.R. Transportation Brokerage Co., Inc. v. 

Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000)). 

When the moving party meets its burden, the “adverse party may 

not rest upon the mere allegations or denials of the adverse 

party’s pleading, but the adverse party’s response, by 

affidavits or as otherwise provided in this rule, must set forth 

specific facts showing that there is a genuine issue for trial. 

If the adverse party does not so respond, summary judgment, if 

appropriate, shall be entered against the adverse party.”

Fed. R. Civ.P. 56(e). 

“[I]n ruling on a motion for summary judgment, the 

nonmoving party’s evidence is to be believed, and all 

justifiable inferences are to be drawn in [that party’s] favor.” 

Miller, 454 F.3d at 988 (internal quotation marks omitted) 

(citing Hunt v. Cromartie, 526 U.S. 541, 552 (1999)). “But the 

non-moving party must come forward with more than ‘the mere 

existence of a scintilla of evidence.’” Miller, 454 F.3d at 988 

(quoting Anderson, 477 U.S. at 252). Thus, “‘[w]here the record 

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taken as a whole could not lead a rational trier of fact to find 

for the nonmoving party, there is no genuine issue for trial.’” 

Miller, 454 F.3d at 988 (quoting Matsushita Elec. Indus. Co., 

Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). 

Where divergent ultimate inferences may reasonably be drawn 

from the undisputed facts, summary judgment is improper. 

Miller, 454 F.3d at 988. 

B. Terms of the Non-Competition Agreement 

The Non-competition Agreement provides, in relevant part, 

that for two years following termination Davis agrees not to: 

(1) accept employment with, or provide services, in any 

capacity, to any competitor of the Company or its Affiliates or 

to any other person, firm or entity which is engaged in any 

business of the same or similar nature to the business of the 

Company or its Affiliates; (2) solicit, perform or engage in any 

business of the same or similar nature to the business of the 

Company or its Affiliates anywhere within the Company’s 

territories or its Affiliates territories; (3) solicit, engage 

in, perform, divert or accept any business of the same or 

similar nature to the business of the Company or its Affiliates 

with or from any customer or potential customer of the Company 

or its Affiliates; (4) induce or attempt to induce any customer 

of the Company or its Affiliates to reduce such customer’s 

business with the Company or its Affiliates or divert such 

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customer’s business from the Company or its Affiliates by direct 

advertising, solicitation or otherwise; (5) disclose the names 

of any customers or any potential customers of the Company or 

its Affiliates to any other person, firm, corporation or other 

entity; (6) employ, hire, cause to be employed or hired, entice 

away, solicit or establish a business with any then current 

officer, employee, servant or agent of the Company or its 

Affiliates or any other person that was employed by the Company 

or its Affiliates within the twelve months immediately prior to 

such employment or establishment, or in any manner persuade or 

attempt to persuade any officer, employee, servant or agent of 

the Company or its Affiliates to leave the employ of the Company 

or its Affiliates; or (7) assist any person, firm, entity, 

employer, business associate or member of Employee’s family to 

commit any of the foregoing acts. Pl.’s UMF ¶ 14; Exh. B, 

attached In Support of Pl’s MSJ/MSA. The Non-Competition 

Agreement also contains a choice of law provision stating that 

it shall be interpreted and construed in accordance with the 

laws of Connecticut. Pl.’s UMF ¶ 16. 

C. Choice of Law 

 Defendants argue that Connecticut law governs the instant 

action because the choice of law provision in the NonCompetition Agreement expressly states that the agreement shall 

be interpreted and construed in accordance with the laws of 

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Connecticut. While Davis does not dispute the existence of the 

choice of law provision, he argues that California law should 

govern this action because Connecticut law conflicts with a 

fundamental policy of California and California has a 

“materially greater interest” in the outcome of this litigation 

than does Connecticut. Thus, the threshold question is which 

state’s law governs this action. 

 1. General Principles 

 “Federal courts sitting in diversity apply ‘the forum 

state’s choice of law rules to determine the controlling 

substantive law.’” Fields v. Legacy Health System, 413 F.3d 

943, 950 (9th Cir. 2005) (quoting Patton v. Cox, 276 F.3d 493, 

495 (9th Cir. 2002)). California courts will enforce a choice 

of law clause in a contract in favor of another jurisdiction’s 

law unless: “‘(a) the chosen state has no substantial 

relationship to the parties or the transaction and there is no 

other reasonable basis for the parties choice, or [¶] (b) 

application of the law of the chosen state would be contrary to 

a fundamental policy of a state which has a materially greater 

interest than the chosen state in the determination of the 

particular issue and which, under the rule of § 188, would be 

the state of the applicable law in the absence of an effective 

choice of law by the parties.’” See Nedlloyd Lines B.V. v. 

Superior Court of San Mateo, 3 Cal.4th 459, 465 (1992) (quoting 

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Rest.2d, Conflict of Laws, § 187(2)); Application Group, Inc. v. 

Hunter Group, Inc., 61 Cal.App.4th 881, 897 (1998). “[T]he 

foregoing approach ‘reflect[s] strong policy considerations 

favoring the enforcement of freely negotiated choice-of-law 

clauses.’” Washington Mutual Bank, FA v. Superior Court, 24 

Cal.4th 906, 917 (2001). 

 In short, “if the proponent of the [choice of law] clause . 

. . demonstrates that the chosen state has a substantial 

relationship to the parties or their transaction, or that a 

reasonable basis otherwise exists for the choice of law, the 

parties’ choice generally will be enforced unless the other side 

can establish both that the chosen law is contrary to a 

fundamental policy of California and that California has a 

materially greater interest in the determination of the 

particular issue.” Washington Mutual, 24 Cal.4th at 917. “‘If 

California has a materially greater interest than the chosen 

state, the choice of law shall not be enforced, for the obvious 

reason that in such circumstance we will decline to enforce a 

law contrary to this state's fundamental policy.’” Id. at 916-

917 (quoting Nedlloyd, 3 Cal.4th at 466). 

2. Substantial Relationship/Reasonable Basis

 In the case at bar, Defendants’ state of incorporation, 

principal place of business and headquarters are all in 

Connecticut. As such, there is both a “substantial 

relationship” between the contract and Connecticut and a 

“reasonable basis” for the parties’ choice of law. See

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Application Group, 61 Cal.App.4th at 899 (finding that “the mere 

fact that one of the parties to the contract is incorporated in 

the chosen state is sufficient to support a finding of 

‘substantial relationship,’ and the mere fact that one of the 

parties resides in the chosen state provides a ‘reasonable 

basis’ for the parties choice of law.’”) Accordingly, the next 

step is to determine whether a conflict of law exists between 

California and Connecticut and whether both have a significant 

interest in having its law applied. 

 3. Conflict of Law & Significant Interest 

 With respect to whether Connecticut law is contrary to a 

fundamental public policy of California in the determination of 

the particular issue (i.e., validity of the Non-Competition 

Agreement), the court must begin its analysis by determining 

whether Connecticut law is in conflict with California law and 

whether both have a significant interest in having its law 

applied. See Application Group, 61 Cal.App.4th at 899-900. If 

the court finds that both states have a significant interest in 

having their law applied, and the law of the chosen state is 

contrary to a fundamental policy of the forum state, the court 

must weigh the chosen state’s interests against the forum 

state’s public policy interests and determine which state has 

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the “materially greater interest” in having its law applied. 

Id.4 

 Under Connecticut law, restrictive covenants made in an 

employment agreement “may be against public policy, and, thus, 

are enforceable only if their imposed restraint is reasonable, 

an assessment that depends upon the competing needs of the 

parties as well as the needs of the public. These needs 

include: (1) the employer’s need to protect legitimate business 

interests, such as trade secrets and customer lists; (2) the 

employee’s need to earn a living; and (3) the public’s need to 

secure the employee’s presence in the labor pool.” Deming v. 

Nationwide Mutual Ins. Co., 279 Conn. 745, 761 (2006). 

Connecticut courts consider the following factors in determining 

whether a restrictive covenant in an employment agreement is 

reasonable: “‘(1) the length of time the restriction operates; 

(2) the geographic area covered; (3) the fairness of the 

 

4 “California applies a three-step ‘governmental interest’ 

analysis to choice-of-law questions: (1) ‘the court examines the 

substantive laws of each jurisdiction to determine whether the 

laws differ as applied to the relevant transaction,’ (2) ‘if the 

laws do differ, the court must determine whether a true conflict 

exists in that each of the relevant jurisdictions has an 

interest in having its law applied,’ and (3) ‘if more than one 

jurisdiction has a legitimate interest . . . the court [must] 

identify and apply the law of the state whose interest would be 

more impaired if its law were not applied.’ Only if both states 

have a legitimate but conflicting interest in applying its own 

law will the court be confronted with a ‘true conflict’ case.” 

Downing v. Abercrombie & Fitch, 265 F.3d 994, 1005 (9th Cir. 

2001) (citation omitted).

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protection accorded to the employer; (4) the extent of the 

restraint on the employee's opportunity to pursue his 

occupation; and (5) the extent of interference with the public’s 

interests.’” United Rentals, Inc. v. Pruett, 296 F.Supp.2d 220, 

231 (D. Conn. 2003). 

Conversely, under California law, the legislature has 

expressly rejected the common law ‘rule of reasonableness’ with 

respect to restraints on the practice of a profession, trade or 

business. Hill Medical Corp. v. Wycoff, 86 Cal.App.4th 895, 

900-901 (2001); see Cal. Bus. & Prof. Code, § 16600 (stating 

that the general rule in California is that covenants not to 

compete are void).5 The settled public policy of California 

favors open competition and the ability of every citizen to 

pursue any lawful employment enterprise of their choice. Hill 

Medical, 86 Cal.App.4th at 900-901; see Application Group, 61 

Cal.App.4th at 900 (observing that section 16600 reflects a 

“strong public policy” of California). To effectuate this 

policy, covenants not to compete in a contract are generally 

void, and, thus unenforceable in California, except where the 

covenant is executed as part of the sale of the goodwill of a 

business or where a partner agrees not to compete in 

 

5 Section 16600 states that “[e]xcept as provided in this 

chapter, every contract by which anyone is restrained from 

engaging in a lawful profession, trade, or business of any kind 

is to that extent void.” Cal. Bus. & Prof. Code, § 16600.

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anticipation of dissolution of a partnership. See Kelton v. 

Stravinski, 138 Cal.App.4th 941, 946-947, 949 (2006) (observing 

that a contract made contrary to public policy may not serve as 

the foundation of any action and therefore when the parties come 

to court for relief they will be left where they are found). 

 In the instant action, Connecticut law conflicts with a 

fundamental policy of California insofar as Connecticut will 

enforce certain covenants not to compete if the imposed 

restraints are reasonable, while California will not enforce 

such covenants, except in narrowly proscribed circumstances. 

See Application Group, 61 Cal.App.4th at 899-900 (observing that 

the common law rule of reasonableness regarding the 

enforceability of a covenant not to compete is “diametrically 

opposed” to California’s approach to the enforceability of a 

covenant not to compete); United Rentals, 296 F.Supp.2d at 231

(Connecticut court observing that because Connecticut law 

enforces certain restrictive covenants in employee contracts, 

and therefore restricts the mobility of employees and the 

exercise of free competition, “it collides with California’s 

blanket policy” prohibiting such covenants).6 

 

6 See Metro Traffic Control, Inc. v. Shadow Traffic Network,

22 Cal.App.4th 853, 859 (1994) (“Section 16600 has specifically 

been held to invalidate employment contracts which prohibit an 

employee from working for a competitor when employment has 

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Thus, the court must next determine whether the respective 

states have a significant interest in applying their own law. 

See Rosenthal v. Fonda, 862 F.2d 1398, 1402 (9th Cir. 1988). If 

only one state has a legitimate interest in the application of 

its law, then the law of that state controls. Id. 

 As the forum state, California has an interest in applying 

its law to this case. See Rosenthal, 862 F.2d at 1402 (noting 

that, “[a]s the forum, a California court will conclude that a 

conflict is ‘false’ and apply its own law unless the application 

of the foreign law will ‘significantly advance the interests of 

the foreign state.’”); see also Int’l Business Machines Corp. v. 

Bajorek, 191 F.3d 1033, 1042 (9th Cir. 1999) (observing that 

California has a considerable interest in protecting its 

citizens from oppressive contracts (e.g., non-competition 

contracts) imposed by employers). 

Likewise, Connecticut has a legitimate interest in applying 

its law because Defendants’ state of incorporation, principal 

place of business and headquarters are located in Connecticut. 

Application Group, 61 Cal.App.4th at 899, n.14 (observing that a 

state has an interest “in the enforceability of covenants not to 

compete, valid where made, and the competitive advantages of 

such provisions”); Int’l Business Machines, 191 F.3d at 1042 

 

terminated, unless necessary to protect the employer’s trade 

secrets.”) 

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(observing that New York has a considerable interest in 

providing coherent, predictable uniform law governing exchange 

of stock by corporations headquartered and trading stock there). 

Thus, because both states have a legitimate but conflicting 

interest in applying its own law, the court is confronted with a 

“true conflict” and therefore must identify and apply the law of 

the state whose interest would be more impaired if its law were 

not applied. Put another way, the court must determine which 

state has the “materially greater interest” in having its law 

applied by weighing the chosen state’s interests against the 

forum state’s public policy interests. See Application Group, 

61 Cal.App.4th at 898-899 (emphasis in original) (“a court can 

decline to enforce the parties’ contractual choice-of-law 

provision only if the interests of the forum state are 

‘materially greater’ than those of the chosen state, and the 

forum state’s interests would be more seriously impaired by 

enforcement of the parties’ contractual choice-of-law provision 

than would the interests of the chosen state by application of 

the law of the forum state.”) 

4. Materially Greater Interest 

In the instant action, it is undisputed that Davis resided 

and worked out of California during his employment with 

Defendants. It is also undisputed that Davis currently resides 

in California and works out of California for IsoRay. 

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Additionally, the parties do not dispute that Defendants 

interviewed and hired Davis’ in Las Vegas and that Davis was 

responsible for sales in the western region of the United 

States, including California, not Connecticut. Further, the 

parties do not dispute that Davis reported to supervisors in 

Arizona and Colorado, not Connecticut. Finally, the parties do 

not dispute that Defendants are a national company doing 

business in every state and are incorporated and headquartered 

in Connecticut.7 

Based on the foregoing, the court concludes that California 

has a “materially greater interest” in the outcome of this case 

than Connecticut and that California’s interests would be more 

seriously impaired by enforcement of the parties’ contractual 

choice of law provision than would the interests of Connecticut 

if California law were applied. First, California has a 

“materially greater interest” in the outcome of this case 

because it has a greater connection to the facts of this case. 

Davis is a resident of California and currently works out of 

7 The parties do however dispute where the Non-Competition 

Agreement was signed. Davis claims it was signed in San Diego, 

while Defendants contend that it was signed in Connecticut. 

Neither party has presented conclusive evidence demonstrating 

where the Agreement was actually signed. While important, 

resolution of this issue is not necessary for the determination 

of which state’s law applies. 

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California for IsoRay.8 At all times during his employ with 

Defendants, Davis resided and worked out of California and his 

responsibilities included sales in California, not Connecticut. 

Moreover, Davis reported to supervisors in Arizona and Colorado, 

not Connecticut. As such, Davis’ responsibilities and 

supervision had little or nothing to do with Connecticut. For 

these reasons, the court concludes that California has a 

“materially greater interest” in the outcome of this case than 

Connecticut because it has a greater connection with the facts 

of this case and the determination of the enforceability of the 

Non-Competition Agreement will affect whether Davis, a 

California resident, will be permitted to remain employed in 

California. See Application Group, 61 Cal.App.4th at 991 

(finding that California had a “materially greater interest” 

than Maryland in the outcome of the case because California has 

a strong interest in ensuring that California-based employers 

can effectively compete for talented employees and protect 

employers and employees from anticompetitive conduct from outof-state employers);9 Pruett, 296 F.Supp.2d at 232-233 (finding 

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8 Indeed, Defendants do not dispute Davis’ assertion that he 

performs “a large majority of his work [for Isoray] in 

California.” Pl’s UMF ¶ 31.

9 In Application Group, the court noted at the outset that 

there was no real dispute that a former employer could not 

enforce a covenant not to compete against a California resident 

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that California had a “materially greater interest” in the 

outcome of a case where the employee was a California resident 

hired by a California-based employer and Connecticut was found 

to have little connection to the facts of the litigation (other 

than being the location of the former employer’s headquarters) 

and no strong policy in favor of keeping the case in 

Connecticut).10 

Second, California’s interests would be more seriously 

impaired by enforcement of the parties’ contractual choice of 

law provision than would the interests of Connecticut if 

California law were applied. This is because Defendants have 

failed to articulate a compelling interest or policy of 

Connecticut that outweighs California’s strong interest in 

protecting its employees from anti-competitive conduct by outwho joined a California-based employer. Application Group, 61 

Cal.App.4th at 895.

10 While the court recognizes that Davis was not hired by a 

California corporation, he resides and currently performs a 

majority of his work in California. The court finds that such 

circumstances are sufficient to afford Davis the protection of 

California’s longstanding policy of strongly favoring the right 

of every citizen to pursue any lawful employment and enterprise 

of their choice. See Application Group, 61 Cal.App.4th at 900; 

see also Whyte v. Schlage Lock Co., 101 Cal.App.4th 1443, 1462 

(2002) (noting that California public policy “generally 

prohibits covenants not to compete,” and “strongly favors 

employee mobility”); Metro Traffic Control, 22 Cal.App.4th at 860 

(“California courts have held that ‘the interests of the 

employee in his own mobility and betterment are deemed paramount 

to the competitive business interests of the employers, where 

neither the employee nor his new employer has committed any 

illegal act accompanying the employment change.’”) 

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of-state employers. As such, California’s interests would be 

more seriously impaired by enforcement of the parties’ 

contractual choice of law provision than would the interests of 

Connecticut if California law were applied. See Cal. Bus. & 

Prof. Code, § 16600 (stating covenants not to compete are 

generally void in California); Hill Medical, 86 Cal.App.4th at 

900-901 (California has a “strong public policy” favoring open 

competition and the ability of every citizen to pursue any 

lawful employment enterprise of their choice); Metro Traffic 

Control, 22 Cal.App.4th at 860 (“California courts have held 

that ‘the interests of the employee in his own mobility and 

betterment are deemed paramount to the competitive business 

interests of the employers, where neither the employee nor his 

new employer has committed any illegal act accompanying the 

employment change.’”) 

For these reasons, the court concludes, on balance, that 

California has a “materially greater interest” in the outcome of 

this case than Connecticut, and that California’s interests 

would be more seriously impaired by enforcement of the parties’ 

contractual choice of law provision than would the interests of 

Connecticut if California law were applied. 

// 

// 

// 

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5. State of Applicable Law in the Absence of a Contractual 

 Choice of Law Provision 

 The final step in California’s conflict of law analysis is 

to determine which state’s law would apply in the absence of an 

effective contractual choice of law provision under § 188 of the 

Restatement of Conflict of Laws. Section 188 provides: 

(1) The rights and duties of the parties with respect 

to an issue in contract are determined by the local 

law of the state which, with respect to that issue, 

has the most significant relationship to the 

transaction and the parties under the principles 

stated in § 6. 

(2) In the absence of an effective choice of law by 

 the parties (see § 187), the contacts to be taken into 

 account in applying the principles of § 6 to determine 

 the law applicable to an issue include: 

(a) the place of contracting, 

(b) the place of negotiation of the contract, 

(c) the place of performance, 

(d) the location of the subject matter of the contract, 

and 

(e) the domicil, residence, nationality, place of 

incorporation and place of business of the parties. 

These contacts are to be evaluated according to their 

relative importance with respect to the particular 

issue. 

(3) If the place of negotiating the contract and the 

place of performance are in the same state, the local law 

of this state will usually be applied, except as 

otherwise provided in §§ 189-199 and 203. 

Rest.2d, Conflicts of Law § 188(1)-(3). 

 As § 188 plainly provides, a court must analyze section 188 

under the principles of § 6. Section 6 provides: 

(1) A court, subject to constitutional restrictions, 

will follow a statutory directive of its own state on 

choice of law. 

(2) When there is no such directive, the factors 

relevant to the choice of the applicable rule of law 

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include 

(a) the needs of the interstate and international 

systems, 

(b) the relevant policies of the forum, 

(c) the relevant policies of other interested states 

and the relative interests of those states in the 

determination of the particular issue, 

(d) the protection of justified expectations, 

(e) the basic policies underlying the particular field 

of law, 

(f) certainty, predictability and uniformity of result, 

and 

(g) ease in the determination and application of the 

law to be applied. 

Rest.2d, Conflicts of Law, § 6. 

 These factors suggest that California should be the “state 

of applicable law” under both § 188 and § 6. While the place of 

contracting with respect to the Non-Competition Agreement is in 

dispute, the parties do not dispute that Davis was interviewed, 

hired, and signed an offer letter in Nevada, not Connecticut. 

Thus, at best, only part of the employment contract (i.e., NonCompetition Agreement) was negotiated and signed in Connecticut. 

Importantly, because Davis was based out of California, and 

responsible for sales in California, the subject matter and 

performance of the contract occurred at least in part in 

California. Further, because Davis was assigned to the western 

region, and reported to supervisors in Arizona and Colorado, his 

responsibilities and supervision had little or nothing to do 

with Connecticut. Finally, at all relevant times, Davis resided 

and worked out of California. Therefore, the alleged breach of 

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the agreement occurred in California when Davis accepted 

employment with Isoray to work out of California. 

While the court recognizes that Defendants are incorporated 

and headquartered in Connecticut, and that application of 

Connecticut law arguably will provide certainty, predictability 

and uniformity of result, the court finds that the most 

significant contacts in the case are in California. 

Additionally, the court finds that, as discussed above, 

California’s strong interest and well-settled public policy of 

protecting resident employees from out-of-state anticompetitive 

conduct seeking to restrict a citizen employee’s mobility and 

right to pursue any lawful employment enterprise of their 

choice, weighs strongly in favor of applying California, 

especially since Defendants have failed to articulate any 

countervailing compelling policy or interest of Connecticut that 

would warrant application of Connecticut law.11

Accordingly, the court concludes that, on balance, 

California law would apply in the absence of a valid choice of 

law provision because it has the most significant relationship 

11 Finally, the court finds that Defendants have failed to 

demonstrate that they had a justified expectation that 

Connecticut law would apply or that Connecticut law would be 

easier to determine or apply than California law. Indeed, 

California law would be easier to apply inasmuch as it would 

void the Non-Competition Agreement without the need to determine 

whether the agreement was reasonable. 

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to the transaction and the parties. The court further concludes 

that, to the extent that applying Connecticut law would provide 

certainty, predictability and uniformity, this does not outweigh 

California’s strong interest and well-settled public policy of 

protecting its citizens from out-of-state anticompetitive 

conduct that restricts an employee’s mobility and right to 

pursue any lawful employment enterprise of their choice. 

For these reasons, the court concludes that California law 

is applicable to this dispute. As such, the court holds that 

the Non-Competition Agreement is invalid and unenforceable as a 

matter of law. The agreement violates California’s well-settled 

public policy prohibiting covenants not to compete.12

III. CONCLUSION 

 For the above stated reasons, the Court GRANTS Davis’ 

motion for summary judgment. 

IT IS SO ORDERED. 

 ENTERED this 7th day of August, 2007. 

s/RALPH R. BEISTLINE 

 United States District Judge 

12 Because the court concludes that Non-Competition Agreement 

is unenforceable under California law, it need not address 

Davis’ alternative argument that the agreement has expired.

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