# FILED

November 4, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF AP PEALS OF TENNESSEE WESTERN SECTION AT JACK SON

GUARDSMARK, INC., ) ) Plaintiff/Appellee ) Shelby Chancery No. 104166-1 ) v. ) ) BORG-WARNER PROTECTIVE SERVICES, ) Appeal No. 02A01-9409-CH-00207 d/b/a BURNS INTERNATION AL SECURITY ) SERVICES, ) ) Defendants/App

ellants. )

APPEAL FROM THE CHANCERY COURT OF SHELBY COUNTY

AT MEMPHIS, TENNESSEE

THE HONORABL

E C. NEAL SMAL

L, CHANCEL

LOR

For the Plaintiff/Appellee : For the Defendant/Appellant : David Wade Thomas L. Henderson Memphis, Tennessee Thomas H. Lawrence Memphis, Tennessee Gerald Stern Washington, D.C. David O. Bickart Jonathan D. Schiller Washington, D.C.

AFFIRMED IN PART, REVERSED IN PART AND REMANDED

HOLLY KIRBY L

ILLARD, JUDGE

CONCUR:

W. FRANK CRAWFORD, P. J., W.S.

DAVID R. FARMER, J.OPINION

This case involv

es restr ictive employment covenants. The plaintiff and the defendant are both private secu

rity companies. The trial court granted the plaintiff a restraining order enjoining the defendant from inducing former employees to brea ch the res tri ctive covenants i n other states, from misrepresenting facts con cerning t he enforceability of the covenants, or from litigating or assisting others in

litigating in

other states reg

arding the enf

orceability

of the restrictiv

e covenants. We affirm in part, reverse in part, and remand. Plaintiff/Appellee Guardsmark (“Guardsmark”) and Defendant/Appellan t Borg-Warner (“Borg-Warner”) are competitors in the private sec urity industry. Gua

rdsmark require

s its security guards to sign a restricti

ve covenant whic

h prevents th

em from wo rking for another security firm at the same work si

te for a period of

one year after

leaving Guardsma

rk. The covenan

t reads: Employee hereby agrees that following the termination of employment with GUARDSMARK, whether voluntary or invol untary, for a period of one year thereafter he (she) will not perform or hire others to perform any security services at the site, place or location where he (she) performed security services within t h e immediate

preceding twelve ( 12) months of his (her) employment with GUARDSMARK. The guards may reque

st a transfer to a

nother Guardsm

ark si te, or may work for another company

at another site without violating the covenant. The guard’s employment contract also provides that: “Eachparty hereby consents to the jurisdiction and venue of the U.S. District Court for the Western District of Tennessee and any court of the State of Tennessee in any action, suit, or proceeding arising out of or rela

ting to this Agreement or the employment of Employee hereunder . . . .” Of course, Borg-Wa

rner is not a part

y to this agreement; the contract is between Guardsmark and the individual security guard. On May 5, 1994, Guardsmark filed a lawsuit against Bor

g-Warner in Cha

ncery Court in Shelby County, alleging that Borg-Warner tortiously interfered with Guardsmark’s contractual relations in Seattle, Washington. Guards mark asserted that, after Borg-War ner took over the

security

serv ices contract at

UPS facilities in Sea

ttle, Borg-Warne

r actively solicit

ed the Guardsmar

k security officers on the site to contin ue working at the s

ite as Borg- Warner employees, in breach of the restrictive covenant between Guardsmark and its employees. Guardsmark argued that Borg-Warner misrepresented to Guardsmark employees that the restrictive covenants were unenforcea ble. The day the complaint w as filed, the Shelb

y County trial judge,

Ch ancellor Nea l Small, issued a restraining order prohibiting Borg-Warner from “interfering with or

attempting to cause the1 The record in this case includes co

urt decisions in Ar

izona and Oklaho

ma in which Guardsmar

k’s restrictive c

ovenant was not en

forced under th

e facts present

ed in those cases. 2 breach of the restrictive covenants contained in the employment

agreements between Guardsmark and its security officers servicing the Seattle, Washington area facilities of UPS and the agreement betweenGuardsmark and United Parcel Service.” On May 20, 1994, the parties entered an identical Consent Order of Temporary Injunction. On July 28, 1994, Guardsmark filed a Supplemental Verified Complaint in Shelby County Chancery Court, seeki ng d eclaratory and injunctive relief

based on Borg-Wa

rner’s activitie

s in Birmingham, Alabama. Guardsmark alleged that Borg-Warner’s cond uct i n Birmingham was similarto that in Seattle, and also alleged that Borg-Warne

r represented t

o Guardsmark clients that Guardsmark

could not enforce its restrictive covenants. A supporting affidavit filed by Guardsmark stated that a representative of Borg-Warner showed a Guardsmark supervisor a “le gal paper” and told him that Borg-Warner “had beaten Guardsmark in Tucson, Arizona and that the opini on o f Judge Tinney whi ch was attached discussed that.” 1 The affidavit stated that the Borg-Warner representative“never said anything to me about whether Guardsmark had been successful in other

cases in enforcing its restrictive covenants with its employees.” Gu ardsmar k asserted that BorgWarner had “establish

ed a p attern” of “ca

using Guardsmark

security office

rs to breach thei

r restrictive covenants” and that Bor g-W arner had “forced Guardsmark to engage in litigation throughout the United States to enforce and defend its restrictive covenants.” Once again, the Shelby County Chancellor entered a temporary restraining order theday the supplemental complaint was filed regarding Borg-Warner’s activities in

Birmingham, Alabama. As withthe earlier restraining order, Borg-Warner was enjoined from attempting to cause the breach of Guardsmark’s restrictive covenants. However, this restraining order also enjoined Borg-Warner from: misrepresenting to anyone, including former, pr e sent or prospective Guardsmark clients and employees that Guardsmark cannot or will not enf orce its restrictive covenants and to require [Borg-Warner], if it chooses to discuss Guardsmark’s employment

restrictive cove

nants, to present t

o those with

whom it discusses such matters cop ies of all orders signed by Courts throughout the United States which have upheld the e

nforceability of

Guardsmark’s re

strictive covena

nts.3

Shortlythereafter, on August 10, 1994, Borg-Warner and one of Gu ards mark’s former employees filed a lawsuit in Birmingham, Alabama, c iting difficulties caused by the Tennessee restraining order and challenging the validity of the restrictive covenant. Immediately upo n receiving the Alabama comp laint, Guardsmar

k sought injunctive r

elief from Chanc

ellor Small in Tennessee. On August 12, 1994, the Shelby Coun ty trial cour t issued an order extending the effective date of the Temporary Restraining Order and prohibiting Borg-Warner from “taking any action to prosecute the case filed in Birmingham, Alabama on August 10, 1994.” On August 29, 1994, Guardsmark filed an application for injunctive relief from interference with Guar dsmark’s restrictive covenants “with its past, present or future employees,” from any misrepresentations regarding the restrictive covenants, from litigating to challenge the enforceability of the restrictive covenants,and specifically from proceeding with the Alabama litigation. Guardsmark alleged that Borg-Warner

was engaged in wide-ranging efforts to defea t G uardsmark’s re

strictive covena

nts. Chancellor

Small entered a temporary restraining order as requested by Guardsmark the same day. On September 9, 1994, the Shelby County trial court issued an order finding Guardsmark’s restrictive covenants enforceable under the laws of Tennessee and Alabama. The September 9 order grant ed Guardsmark’s motion for a Temporary Injunction proh ibiting Borg-Warner from “interfering withor attempting to cause the breach of the restrictive covenants contained in the employment agreement

between Guardsmark and its employees” in Alabama. The injunction also prohibited Borg-Warner

from misrepresenting facts concerning the enforceability of Guardsmark’s restrictive covenants to former, present or prospective Guardsmark clie

nts and employees.

Borg-Warner was specifically

prohibited from providing to any persons “copies of any judicial orders or opinions concerning the Guardsmark r estrictive cove

nants unless

it provides all such orders, including those which have upheld the enfo rceability of Guardsma rk’s restrictive

covenants.” The

order again prohibited Borg-Warner from taking part in the Alabama litigation. This provoked yet another lawsuit in another forum. On September 22, 1994, Borg-Warner filed suit against Guardsmark, the trial judge in this case, Shelby County Chancellor Neal Small, and the Shelby County Chancery Court in the United States District Court for the Easter n District of Kentucky, alleging that

the Tennessee injunction violated Borg-Warner’s First Amendment right of free speech, right to petition the government, the full faith and credit clause and 28 U.S.C. § 1738, and the Supremacy clause of the United States Constitution. Chancellor Small modi fied the2 The Sixth Circuit Cour t of Appeals affi

rmed the Kentuck

y federal distric

t court in an opinion dated June 16, 1998. 4 Tennessee injunction to permit Borg-Warner to prosecute the Kentucky lawsuit. The Kentucky districtcourt determined that it lacked personal jurisdiction over Chancellor Small and the Chancery Court, but granted summary judgment to Guardsmark on the remaining claims. See Borg-Warner Protective Servs. Corp. v. Guardsmark, Inc. , 946 F. Supp. 495 (E.D. Ky. 1996). 2 On December 20, 1 9 95, Guardsmark filed a motion for summary judgment in this case. Chancellor

Small granted Gua

rdsmark’s motion in

an order filed January 26, 1996. The Order states in part: THIS COURT THEREFORE DECLARES THAT, after reviewing the law of Tennessee, Alabama, Washin gton and Kentucky, Guardsmark’s c ovenantsare valid and enforceable under the laws of Tennessee, Alabama, Washington and Kentucky. The Guardsmark covenants state they are to be construed under Tennessee law, and, as has been said, are valid under Tennessee law. IT IS THEREFORE ORDE RED, ADJUDGED AN

D DECREED that: 1. Defendant Borg-

Warner is here

by permanently

enjoined from

interfering with or attempting to cause the breach of the restrictive covenants contained in the employment agreements between Guardsmark and its employees; and 2. D efendant

Borg-Warner is hereby permanently enjoined from initiating and encouraging or assisting others to initiate litigation to challenge the enforceability of Guardsmark’s re

strictive covena

nts with its employee

s. The trial court’s fin

al and perma

nent order does n

ot state explicitly

whether Borg-Wa

rner is permanently

enjoined from misrepresenting facts concerning the enforceability of Guardsmark’s restrictive covenants. In the final order, the trial court states, “This court hereby makes permanent its orders of temporary

injunction with

respect to the foregoing points which were previously entered in this case.” Since

the final order is

unclear on this poi

nt, for purposes o

f this appeal, we

will

assume that the trial court’s final order permanently enjoined Borg-Warner from misrepresenting facts, either expressl

y or by implication,

concerning Gua

rdsmark’s rest

rict ive covenants, and pro h ibited Borg-Warner from providing any person copies of judicial orders from other states finding the restrictive covenants unenforceable unless it also provided copies of orders upholding the enforceability of the covenants. Borg-Warner now appeals the trial court’s final order

.5

On appeal, Borg-

Warner raises

twelve issues: 1. Should this Court rev erse the decisio

n of the Chancery

Court b as ed on res judicata because the issue

s litigated in

this case have already

been litigated to final judgment in another action between Borg-Warner and Guardsmark? 2. Did the Chancery Court err in failing to dism iss this action for lack of personal jurisdiction over Borg-Warner since the events on which this suit is based occurred outside of Tennessee, and Borg-Warner’s contacts to Tenne

ssee are irrele

vant to this action? 3. Did the Chancery Court err in failing to dismiss this action based on forum non conveniens since this suit arose out-of-state, sincethe contracts on which the suit is basedwere signed out-of-state, since all the witnesses are out-of-state, a

nd since this action could have been conveniently joined to a prior federal action in Kentucky? 4. Does the Chancery Court inj unction violate the Full Faith and Credit Clause by prohibiting Borg-Warner’s actions in other states, even though o ther sta tes have found Guardsmark’s covenants unenforceable? 5. Does the Chancery Court injunction violate the First Amendment and Tennessee law as a prior restrain

t on speech where

it prohibits

Borg-Warner from, among other things, interfering withthe restrictive c ovenants of Guar

dsmark’s future

employees? 6. Does the Chancery Court injunction viol ate th e First Amendment and corresponding Tennessee constitutional free speech rights since the Chancery Court neither determinedthat there was a significant government interest, nor did it tailor the injunction to burden no more speech than was necessary? 7. Is the Chancery Court injunction unconstitutionally vague and over broad since it prohibits Borg-Warner “from taking any action to interfere with Guardsmark’s covenants . . . and from making any misrepresentations regarding Guardsmark?” 8. Did the Chancery Court err by entering a nationwide injunction declaring all of Guardsmark’s restrictive cove nant s valid regardless of other states’ laws and decisions on this issue? 9. Does the Chancer

y Court injunction vio

late the Commerce

Clause since it has the effect of regulating conduct wholly outside of Tennessee? 10. Did the Chancery Court err by allowing Guardsmark to litigate the validity of its rest rictive covenants without joining the security guards who signed the covenants? 11. Did the Chancery Court a buse its discretion

by failing to

grant Borg-Warner a continuance to obtain controverting affidavits when G uardsmark filed

a late affidavit in support of summary

judgment, or by fai

ling to grant Borg-W

arner’s motion to strike the late af

fidavit? 12. Did the Chancery Court err in granting Guardsmar k’s motion for summary judgmentwhen there w ere genuine issues of material fact precluding summary judgment? A motion for summary judgment should be granted when the movant demonstrates that there

are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law. See Tenn. R. Civ. P. 56.03. The party moving for summary judgment bears the burden of6

demonstrating that no genuine issue of material fact exists. See Byrd v. Hall

, 847 S.W.2d 208, 211 (Tenn. 1993). On a motion f or summary judgmen

t, the court must take the strongest legitimate view of the evidence i n fa vor of the nonmoving party, allow all reasonable inferences in favor of that party, and discard all countervailing eviden ce. See id. at 210-11. Summary judgment is only appropriate

when the facts a

nd the legal conc

lusions drawn fro

m the facts reaso

nably permit only

one conclusion. See Carvell v. Botto ms , 900 S.W.2d 23, 26 (Tenn. 1995). Since only questions of law are involved, there is no presumption of correctness regarding a trial court's grant of summary judgment. See id. Therefore, our review of the tri

al court’s grant

of summary judgmen

t is de novo on the record before this Court. See id. On appeal, Borg-Warner contends that the trial court erred in not dismissing the complaint for lack of personal jurisdiction. Borg-Warner asserts that, alth

ough it is licensed to

do business in Tenne ssee, its contacts with thi s state are unre

lated to this action

and are theref

ore insuffic

ient t o support personal jurisdiction . G uardsmark argues that the exercise of personal jurisdiction over Borg-Warner

is ap propriate because Borg-Warner’s contac ts are sufficient and because Borg-Warner waived any objection to personal jurisdiction by failing to timely object. Rule 12.08 of the Te

nnessee Rules of Ci

vil Procedure pro

vides: A party waives all defenses and objections which the party does not present either by motion as hereinabove

provided, or, if th

e party has made no motion, i

n the party’s answer or reply, or any amen

d ments thereto, (provided, however, the defenses enumerated in 12.02(2) . . . shall not be raised by amendment) . . . . Rule 12.02(2) of

the Tennessee Rules of Civil Procedure is the defense of “lack of jurisdiction over the person.” Under this rule, “objections to personal jurisdiction and venue a re deemed waived unless they are raised

in a timely manner.” Dixie Sav. Stores, Inc. v. Turner , 767 S.W.2d 408, 410 (Te nn. Ap p. 1988). If a party makes a “general appearance” without challenging per sonal jurisdiction, venue, or other matters, these obj ections are deemed waived. See id. In Landers v. Jones , 872 S.W.2d 674 (Tenn. 1994) , the Court stated: Init ial ly, we note that there is a mo dern legal trend away from the technical requirement

that a def

endant must enter a special appearance to contest personal jurisdiction. . . . Under

both the state and f

ederal civil

procedure rules, therefore, a defendant is permitted to raise the defense of lack of personal jurisdiction atthe same time o ther defenses a

re raised. Waive

r occurs only

if there is no obje

cti on t o personal jurisdiction in the first filing, either a Rule 12 motion or a answer. 872 S.W.2d at 676. Tennessee cour ts have defined th

e term “genera

l app earance,” as “acts from which it can reasonably be inferred that the party recognizes and submits itself to

the jurisdiction of7

the court. Thus a par

ty’s consent to the

entry of a judgmen

t against it constitutes a general appearance.” Dixie Sav. Stores , 767 S.W.2d at 410. In Patterson v. Rockwell International , 665 S.W.2d 96 (Tenn. 1984), the Tennessee Supreme Court discussed the finding of an appearance: [B]eforean appearance will be found by implica tion, i t must be shown from the defendant’s se eking, taki ng, or agreeing t o some step or proc

eeding in the cau

se beneficial to himself or detrimental to the plaintiff other than one contesting only the jurisdiction of the court or by reason of some ac t or proceeding r

ecognizing the c

ase as being in court. Patterson , 665 S.W.2d at 99-100. The Landers court cautioned: In accordance

with the modern trend, and Rule 12.02 of theTennessee Rules o f Civil Procedure juvenile courts sh ould only find

a general app

earance that w

aives a defendant’s right

to contest personal jurisdiction when the defendant has recognized the proper pendency of the caus e by m aking a motion that goes to the merits or by filing an answer, without challenging personal jurisdiction. To the extent that prior judicial decisions can be read as requiring otherwise, they are overruled. Landers , 872 S.W.2d at 677. G iv en these parameters, the circumstances in this case must be examined. Guardsmark filed

its original complaint on May 5, 1994. Before raising the issues of lack of personal juris

diction and imprope

r venue, Borg-Wa

rner took the foll

owing actions: 1. ConsentOrder

of Temporary Injunction, entered May 20, 1994, and signed by counsel for Borg-Warner. 2. Notice of Appearance of counsel for Borg-Warner, filed May 23, 1994. 3. Defendant’s Notice of Tennessee Rules of Civil Procedure 30.02(6) Deposition of the Person(s) M ost Knowledgeable at

Guardsmark, Inc ., filed August 4, 1994, and signed

by Borg-Warner

’s counsel. 4. D efendant’s Objections and Response to Plaintiff’s Request for Production of Docu ments, filed August 10, 1994, and signed by Borg-Warner’s counsel. 5. Order

Resetting Date of Preliminary Injunction an d E xtending Temporar y Restrai ning Order, entered August 12, 1994, and signed by BorgWarner’s counsel. 6. Affidavit

of Ray Sides, submitted on behalf of Borg-Warner and filed on August 26, 1994. 7. Affidavit

of David B. Hicks,

submitted on behalf of Borg-Warner and filed on August 26, 1994. 8. Affidavit

of Charles Rodney Weldon, submitted on behalf of BorgWarner and filed on August 26, 1994. 9. Supplemental Notice o f Appearance of counsel for Borg-Warner, fi led on September 7, 199

4, and signed by ne

w Borg-Warner c

ounsel. 10. Defend ant’s Application for Permission to Appeal and M otion to Sta y Restraining Order and Temporary Injunction Pending Appeal, filed on September 8, 1994, and signed by

Borg-Warner c

ounsel. 11. Appli cat ion on Behalf of Defendant-Appellant for Extraordinary Appeal by Permission on Original Application in the A ppellate Court and

Motion to Stay, filed on Septe

mber 9, 1994, and si

gned by Borg-War

ner counsel. 12. Defendant’s Motion fo r Reconsideration of Order Granting Restraining Order and Temporary Injunction or, in the Alternative, Moti on to Dissolve and/or Modify Restraining Order and Temporary Injunction, filed8

September 8, 1994,

and signed by Borg-

Warner’s coun

sel. 13. Order

Granting Temporary Injunction, entered by the Chancellor

on September 9, 1994,

and signed by Borg-

Warner’s coun

sel. The first time Borg-Warner raised the defe

nse of lack of pe

rsonal jurisdictio

n was in its Answer, and in a motion, both

filed on September 14, 1994, over four months a fter Guardsmar

k filed its Complaint. Under these circumstances, we find that Borg-Warner waived any objection to the trial court’s lack of jurisdiction over the person. The decision of th e trial court is af

firmed on this

issue. Borg-Warner

also asserts

on appeal that the

trial court erre

d in denying its motion

to dismiss

on the grounds of forum non conveniens . Borg-Warner notes that the events that led to this lawsuit occurred outside Tennesse

e and that all the w

itnesses with knowl

e dge of th e covenants at issue reside in Alabama and Was hington. Although the

contracts between Guardsmark and the individual security guards are gove

rned by the Tenne

ssee forum selec

tion clauses of the

ir contracts, of

course the contractual provision between Guardsmark and the security guards would not govern an action betweenGuardsmark and Borg-Warner. U

nder these circ

umstances, Borg-

Warner argue

s that these other states have a more significant relationship to the controversy and a legitimate intere

st in this suit, and consequently that the trial court erred in denying Borg-Warner’s motion to dismiss. On appeal, this Court m

ust determine whe

ther the trial cou

rt’s denial of Bo

rg-Warn er’s motion to dismiss based on the doctrine of forum non conveniens was an abuse of discretion. See Package Exp. Ctr., Inc. v. Snid er Fo ods, Inc. , 788 S.W.2d 561, 564 (Tenn. App. 1989) (citing Zurick v. Inman , 221 Tenn. 393, 404, 426 S.W.2d 767, 772 (1968)). There are numerous factors considered

in determining the applicability of the doctrine of forum non conveniens . These factors “generally

relate to the parties, witnesses, subject-matter, or the court.” Zurick , 426 S.W.2d at 772. It is necessary th

at the cause

of action arise outside the state in order to trigger the question of the applicability

of the doctrine, but this fact in and of itself is not sufficient. See id. at 773. In addition, while the necessity of out-of-state witnesses may be considered, the fact [that] there are out-of-state witnesses is not of itself enough to support an application of the doctrine. This factor has to be supported by facts showing why, due to out-of-state w

itnesses, there is

a strong likelihood

defendant will

be done an injustice if forced to go to trial in the forum selected by plaintiff. This can be done by giving the names of

the witnesses, na

ture and materia

lity of their

testimony, and any other applicable

facts. It is upon these facts the trial court exercises its discretion in the application of the doctrine. Id. , 221 Tenn. at 410, 426 S.W.2d at 775. Other factors that may be considered include: the relative ease o

f access to sources of proof

; availability

of compulsory process for9

attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be ap

propriate to the a

ction; and all other practical problems that make trial of the case easy, expe ditious and inexpensive. Package Exp. , 788 S.W.2d at 563 (quoting Zurick , 221 Tenn. at 403, 426 S.W.2d at 772). In this case, the cause of action arose out-of-state, and one of the parties, Borg -Warner, is locatedoutside Tennessee but does business in Tennessee. In support of its motion to dismiss, BorgWarner submitted affidav

its from its employees, who assert that they have no conta

ct with the state of Tennessee. However, the empl o yees indicated th at their jobs requ

ire them to travel

from Ohio

to Kentucky and other states. Under these circumstances, the evidence is insufficient to

find that the trial court abused its discretion by denying Borg-Warner’s motion to dismiss on the basis of forum non conveniens . The decision of the trial court is affirmed on this issue. Borg-Warner

also argues that the doctrine of res judicata requires dismissa

l of this lawsuit. Borg-Warner’s argument is based on its litigation against Guardsmark in federal cour

t in Kentucky. On September 15, 1994, the Tennessee trial court in this case issued a temporary injunction against Borg-Warner, prohibiting Borg-Warner from interfering with Guardsmark’s restrictive covenants and prohibiting Borg-Warner from litigating against Guardsmark in other forums. On September

21, 1994, Guardsmark

filed a petition to h

oldBorg-Warner in

contempt for viola

ting this order and previous orders. Borg-Warner t hen filed a motion for modification of the temporary injunction in order to file sui t in federal court a

gainst Guardsmar

k, asserting cer

tain federal cla

ims. The Tennessee trial court modified the injunction to allow Borg-Warner to file actions in the United States District C ourt for the Western District of Tennessee, and later also modified the injunction

to allow Borg-Warner to file a complaint in the United States District Courtfor the Eastern District of Kentucky. On September 22, 1994, Borg-Warner filed a complaint in the Eastern District of Kentucky against Shelby County Chancellor Neal Small, the Shelby County Chancery Co urt, and Guardsmark. See Borg-Warner Pro tective Serv

s. Corp. v. Guardsmark, Inc. , 946 F. Supp. 495 (E.D. Ky. 1996). Borg-W arner asserte

d that Guardsma

rk’s restrictive

covenants were

unenforceable and sought an injunction prohibiti ng the enforceme

nt of the Shelby Count

y Chancellor’s orders. See id. at 497. After the Kentucky federal court determined that it lacked personal jurisdiction over the Tennessee trial judge and the Chancery Court, Borg-Warner voluntarily dismissed those claims. The Kentucky feder

al court heard th

e claims again st Guardsmark on the merits, found that3 The decision of the Kentucky federal court was later affirmed on appeal. See

footnote 2 herein.

4 The Commerce Clause of the United States Constitution grants Congress the power “[t]o regulate Commerce . . . among the several States.” U.S. Const. art. I, § 8, cl. 3. 10 Guardsmark’s restrictive covenants were enforceable,

and dismissed Borg-

Warner’s clai

ms against Guardsmark. See id. at 502. 3 It is unclear how application of the doctrine of res judicata is favorab le to Borg-W arner under these circumstan

ces, since the Ke

ntucky federal c

ourt refused to e

njoin enforc ement of the Tennessee injunction at issue h ere, and dismisse

d Borg-Warner’ s claims against Guardsmark. Although the Kentucky federal court decision was rendered te

n months after the

trial court in this

case granted summary judgment for Guardsmark, Borg-Warner co ntends t hat the doctrine of res j udicata applies because the federal decision, though appealed, was final and the t rial court’ s decisio n in this case was not final. Of course, since the Kentucky federal court’s decision wa s rendered months after the d

ecision in this

Court, the issue of

res judicata

was not raised in the trial court. Under all of these circumstances, we find this argument to be without merit. Borg-Warner

also contends on a

ppeal that the tr

ial co urt erred in granting summary judgment

to Guardsmark and in issui ng the injunctive relief sought. Borg-Warner argues in part that the injunction is overly broad and violates the Commerce Clause of the United States Constitution. 4 Borg-Warner

maintains that the t

rial court’s orde

r affects interstat e commerce in security guard services outside Tennessee, and therefore has the ef fect of regulating inters

tate commerce w

holly outside Tennessee. The initial complaint in t

his case was based on Borg-Warner’s actions in a given situation in Seattle, Washington. The supplemental complaint sought relief based on Borg-Warner’s conduct

at a particular fa

cility in Birmingham,

Alabama. Subsequently, Guardsmark sought broader relief, alleging, and submitting documents indicating, that Borg-War ner was engaged in wide-ranging efforts to challenge Guardsmark’s restrictive covenants. Guardsmark sought an order enjoining11

Borg-Warner f

rom: 1. Taking any action to interfere w ith Guardsmark’s restrictive cove

nants with its past, present or f

uture employees; 2. Making misrepre

sentations regar

ding Guardsmark a

nd its restrictive

covenants; 3. Initiating and encouraging or a ssisting o thers in litigation to challenge the enforceability of Guardsmark’s restrictive covenants with its employees; and 4. From proceeding with or taking part in the litigation filed by Bo rg-Warner in Birmingham, Alabama, in the Circuit Court o f Jefferson Coun

ty, Alabama, at Civ

il Action No. CV-94-05690. Guardsmark’s request for injunctive relief was granted in toto the same day. In support of its

argument, Borg-W

arner cites Hyatt Corp. v. Hyatt Legal Services , 610 F. Supp. 381 (N.D. Ill., E.D. 1985). In Hyatt , the plaintiff, Hyatt Cor po ration, sought a nationwide injunction prohibiti

ng the defendant

from using the trad

emarked name Hy

att for its servic

e, Hyatt Legal Services. The trial court denied the plaintiff’s motion for a preliminar y injunction, and the Seventh Circuit Court of

Appeals revers

ed, finding that use

of the name Hyatt Legal Services was

a probable violatio

n of the Illinois Ant

i-Dilution Act, in th

at it diluted the disti

nctiveness of th e plaintiff’s mark. See id. at 381-82. The appellate court remanded the action to the trial court “for entry of an injunction prohibiting the appellee from using the name Hyatt L egal Services” and ordered the defendant to select a new name. Id. On rema nd, the trial cour t examined a natio

nwide injunction in o

rder to enforce

Hyatt Corpora tio n’s protectable property right against dilution of its mark, under Illinois’ anti-dilution

statute. See id. at 382. The trial cour t note d first that the trial court had the power to issue a nationwide injun cti on, by virtue of its jurisdiction over the parties. See id. at 383. However, the Hyatt court found that the issuance of a nationwide injunction in that case would conflict with the Commerce Clause of the UnitedStates Constitution. See id. at 383-85. The court noted, under the Commerce Clause, (1) that states canno

t dir ectly regu late interstate commerce; and (2) that incidental regulations of interstate com m erce cannot be exces sive in light of loca l interests furthered by the law. Id. at 383 (citing Edgar v. MITE Corp. , 457 U.S. 624, 640, 102 S. Ct. 2629, 2639, 73 L. Ed. 2d 269 (1982)). Observing that advertising is a “vital aspect of interest commerce,” the court found that a state injunction dir

ected at advert

ising out of the state

“would appear to be a direct interfe rence with interstate commerce.” Id. The court found that such a direct

interference with interstate commerce12

would conflict with the Commerce Clause. See id. at 384. In the alternative, the Hyatt court examined whether the

injunction would be

an “incidental” regulation of interstate commerce that violated the Commerce Clause. Quoting Pike v. Bruce Church, Inc. , 397 U.S. 137, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970), the Hyatt court stated: Where the [state] statute regulates evenhande dly to effectuate a legitimate local public interest and its effects on interstate commerce are only inci dental, i t will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the punitive local benefits. . . . If a legitimate local purpose is found then the question becomes one of degree. And the extend of the burden that will be tolerated will of course depend

on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities. Id. at 384 (quoting Pike , 397 U.S. at 142, 90 S. Ct. at 847). In Hyatt , the local intere st was th e protection of the corporation’s trademark within the state. See id. Noting that trademark protection differs among states, the Hyatt court foundthat a nationwide injunction, while effective to protect the local interest, appeared “excessive.” Id. at 385. The court stated: The n ationwide injuncti on proposed by plai

ntiff would elimina

te any dilutio

n problem. The injunction soug ht by plaintiff, how

ever, would

also reach way beyond the limits of Illinois, affecting advertising and promotion in areas which have little, if any, effect on the strength of plaintiff’s trademark

within Illinois. The thought of an Illinois statute, in the absence of fraud, affecting the advertising of an

Ohio legal office to Ohio citizens in Ohio, where no anti-dilution statute exists, is

particularly disquieting. Id. The Hyatt

court concluded that a nat ionwide i njunction, even if it only incidentally affected interstate commerce, “would place an excessive b urden on that commerce

in light of the inter

est sought to be protected.” Id. Nevertheless, because the appellate court had directed the trial court to issue a nationwide injunction, the trial court did so. See id. at 385-86. However, the trial court stayed the injunction pending appeal. See id. at 386. The record

shows no further published action on the case. Guardsmark

insists tha t the trial court in this case had the power to issue a nationwide injunction, and a

rgues tha t Tennessee has a legitimate interest in protecting Guardsmark’s contractual pro

visions in any state . Guardsmark cite s Carson v. Here’s Johnny Portable Toilets, Inc. , 810 F.2d 104 (6th Cir. 1987), in which the court upheld

the issuance of a nationwide injunction

to prevent the dilution of the plaintiff’s state-created rights. Guardsmark argues that Borg-Warner may seek modification of the injunction for states whose laws differ from Tennessee regarding the enforcement

of restrictive c

ovenants, conce

ding that at least on

e state , Cali fornia, has enacted statutes which wou

ld prevent the enf

orcement of Gua

rdsmark’s coven

ants.13

Determining the geographic scope of an injunc

tion is within the discret

ion of the trial cou

rt. See Deere & Co. v. MTD Prod., Inc. , 41 F.3d 39 (2d Cir. 1994). The trial court in this case, having jurisdiction over the parties , had the power a nd authority

to issue an injunction crossing state line s. Se e , e.g. , Instrumentalist Co. v. Ma rine Corps. League , 509 F. Supp. 323, 340 (N.D. Ill. 1981), aff’d , 694 F.2d 145 (7t h Cir. 1982) ; Champions Golf Club, Inc. v. Sunrise Land Corp. , 846 F. Supp. 742, 759 (W.D. Ark. 1994) (and cases collected therein); Restatement (Second) of Conflict of Laws § 53. In this case, Guard

smark’s interest

is protection of its

nationwide right to prohibit employees from provid ing security serv ices at a given site

after Guardsma

rk no longer provi

des security services at that site. The trial court found that Guardsmark’s restrictive covenants were

limited in scope an d re asonable, and the refore enforc

eable under the

laws of Tennesse

e and other state

s. However, the enforcement of a ny restr ictive covenant depends greatly on the facts presented in a given situation. As between the parties in this case, the cour ts of at least two states, Arizona and Oklahoma, declined to enforce Guardsmark’s restrictive covenant under certain circumstances. In bothof those

cases, the employee subject to the restrictive covenant was not offered another position by Guardsmark after G

uardsmark’s services at the site of employment were terminated. In the Oklahoma decision, the court stated:

Viewed withoutregard to attendant circumstances, the Guardsmark covenant falls well within the realm of reasonableness. It is clearly limited in scope, and the prohibited “ activity” is limited to protecting the employer from having its stock of employees at a facility “raided” by a competitor. However,viewing the restraint in light of all the circumstances surrounding Guardsmark’s implementation of it here makes the covenant much less reasonable. Plaintiff’s evidence showed that the loss of the Amoco contract -- and hence the loss of his job -- oc

curred solely

because of Guardsmark . Burns had already won the contract when it appro ached pla intiff, and Guardsmark had no other jobs available. These factors a lone do away with G

uardsmark’s ar

gument t hat the covenant was needed to pro

tect its “investme

nt” in its employees , since by the time plain tiff was contacted, that “investment” was already lost. There is no allegation that plaintiff possessed any trade secr ets or confidential information, that he had a particularunique or unusual talent, or that the nature of his work was something other than work in the nature of a “common calling.” Thus, regardless of

how narrowly the

covenant was dra

wn, viewing it in

the totality of the circumstances -- in a light mo st favorable to pl

aintiff -- prese

nts considerable

evidence of its unreasonable harshness to plaintiff. Furt her , Guardsmark’s attempt to enforc e the covenant oc

curred at a time

when the value of the covenant to Guardsmark was minimal at best. I n other w ords, plaintiff’s evidence is such that -- disregarding conflicting evidence from Gua rds mark which might show otherwise -- the trial court should have deemed the covenant unenforceable

and against public

policy under the sp

ecific facts an

d circumstances

.14

Hankins v. Guardsmark, Inc. , No. 80, 121, at 9-10 (Okla. Ct. App. Mar. 15, 1994) (unpublish ed mem.op.). Clearly, the enforceability of a restrictive covenant must be viewed in light of all of the circumstances in a given situation. See Restatement (Second) of Contracts § 186 cmt. a, § 188 cmt. g (1981). Section 188, comment g, to t he Secon d Restatement of Co ntracts was quote

d with approval in Selox, Inc. v. Ford , 675 S.W.2d 474, 476 (Tenn. 1984): Whether the risk that the employee may do in jury to the employe

r is sufficient to justify a promise to refrain from competition after the termination of the employment wo uld depend on the facts of the particular case. Post-employment restraints are scrutinizedwith particular care because they are often the product of une qua l bargaining power and because the em ploy ee is likely to give scant attention to the hardship he may later suffer through the loss of his livelihood. Selox , 675 S.W.2d at 476 (quoting Restatement (Second) of Contracts § 188 cmt. g). Moreover, the level of support for the enforcement of restrictive covenants may differ from state to state. See, e.g., American Protective Servs., Inc. v. Guardsmark, Inc. , BC 115277 (Cal. Su per. Ct. Los Angeles County) (transcript of proceedings on Feb. 21, 1996) ( citing section 1660 0 of the California

Business and Professional Code as prohibiting the enforcement of restrictive covenants). Where the enforceability

of Guardsmark’ s restrictive covenant is so dependent on the facts in a particular

s ituation and the laws and public policy of the state in which the employee reside s, issuance of a nationwide injunction is clearly inappropriate. Therefore, while the trial court in this case had jurisdiction over the parties and the power and authority to issue a nationwide injunction under appropriate

circumstances, the trial court abused its discretion by issuing an injunction, nationwide in scope, prohibiting Borg-Warner from “interfering with or attempting to cause

the breach” of the restrictive cove

nants, or from litig

ating to challenge

the enforceab

ility of the covena

nts. As noted above, the trial court’s temporary injunction, made p ermanent in its final order, enjoins Borg-War

ner from: mis represe

nting facts, either expressly or by implication, to anyone, including fo rmer , present or prospective Guardsmark clients and employees, concerning Guardsmark’s restrictive cove nants. Specifica

lly, Defendant is

pr ohibited from providing such persons or entities, copies of any judici al orders or opinions concerning the Guardsmark res trictive covena

nts unless it provide

s all such orders, inclu ding those which have upheld the enforceability of Guardsmark’s restrictive covenants. As discussed above,

the enforceab

ility of Guardsmar

k’s restrictive c

ovenantsdepends on the factual circumstanc es and other factors, such as the laws and public policy of the state in which the5 There were no concomitant restrictions on Guardsmark to disclose to employees

or others that the restrictive covenant may notbe enforceabl e under some circ

umstances. 15 employee is located. 5 Consequently, if Bor g-Warner expr

esses t he vi ew that Guardsmark’s restrictive covenant

may not be enforceable in a given situation, the truth of the statement depends

on the fact ual circumstances and the law in the state involved. Therefore, the issuance of a nationwide injunction prohibiting Borg-Warner from taking thep osition that Guardsmark’s restrictive covenant cannot be enforced in a particular situation is overly broad and inappropriate. The trial court abused its discretion in ordering such a broad, nationwide prohibition. Borg-Warner

next argues that the trial cour t e rred in allowing Guardsmark to seek a declaratory judgment as to the va lidity of its restrictive covenants without joining as defendants the individual security guards who signed the covenants. Borg-Warner contends t

hat the guards are indispensable

parties under Tennessee Code Annotated § 29-14-107(a), wh ic h provides: “When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no de claration sha ll prejudice the rights of persons not parties to the proceedings.” Tenn. Code Ann. § 29-14-107(a) (1980). “The non-joinder of

necessary parties is fatal on the question of justicia

bility, which, in a su

it for declaratory judgment, is a necessary condition of judicial relief.” Huntsville Utility District v. General Trust , 839 S .W.2d 3 97, 400 (Tenn. App. 1992) (quoting Wright v. Nashville G as & He ating Co

. , 183 Tenn. 594, 598, 194 S.W.2d 459, 461 (1946)). Guardsmark argues that a declarationthat the restrict ive covenants ar

e enforceable

in this case does not prejudice the rights of the security guards who signed thecovenants, beca use they remain

free to challen

ge the covenants in individual actions. Therefore, Gu ardsma rk contends that, under Section 29-14-107(a), the declaratory judgment does not “prejudice the rights of persons not parties to the proceedings.” Tenn. Code Ann. § 29-14-107(a) (1980). To determine whethe

r the guards’ interests would be affected by a declarator

y judgment in this case, it must be de

termined whether

Guardsmark coul

d use the declara

tory judgment agai

nst the guards in subsequent laws uits unde r the doctrine of collateral estoppel. Collateral estoppel “precludes relitigation of issues between the parties or t heir privies in different causes of action provided resolution of the issue was necessary to the decision.” Phillips v. General M otors Corp. , 669 S.W.2d 665, 667 (Tenn. App. 1984) (citing Scales v. Scales , 564 S.W.2d 667 (Tenn. App.6 It is arguable that the choice-of-law clause in the covenants mandate that

Tennessee law would apply in subsequent suits involving the guards. However, the forum selection clause in the covenants states that “[t]he law of the State of Tennessee will govern the interpretation, validity, and effect of this Agreement.” This language indicates that the provision applies to substantive issues on interpretation of the agreement, not to procedural issues, such as whether collate

ral estoppel appl

ies. 16 1977)). If Guardsmark could utilize the declaratory judgment in this case to prevent relitigation of the validity of the covenants in subsequent actions against theguards in Washington and Alabama, this would clearly prejudice the right s of the guards. Re solution of this issue

, therefore, en

tails a study of the laws of those states and factual circumstanc es of each subsequent case. 6 The law on collateral estop

pel may differ fr

om state to state

as to whether mutua

lity of parties is required, the definition of privity, and other relevant issues. The issue may turn on the facts of the particular case. A case by case determination is necessary to ascertain whether a guard’s interests are affected and, thus, whether he is an indispensable party. Therefore, in this case, we remand for the trial court to deter mine whether the individual guards in Washington and Alabama are indispensable parties. Because we find that the trial court abused its discretion in issuing a sweeping, nationwide injunction in this case, it is unne cessa ry to reach the issue of whether the injunction violates the Commerce Clause of the U.S. Constitution. Likewise, the remaining issues raised by Borg-Warner are pretermitted by this holding. The order of

injunction issued by the trial court in this case is hereby reversed. The cause is remanded

to the tr ial court for a determination of whether Guardsmark is entitled to summary judgmentin the specific factual circumstances presented in Seattle, Washington and Birmingham, Alab ama and whether the guards are indispensable parties considering the doctrine of collateral estoppel under the laws of Washington and Alabama.17

The decision of the trial court is aff irmed in part, rev

ersed in part,

and the cause is remanded for further proceedings consistent with this Opinion. Costs are assessed against Appellee, for which execution may issue if necessary.

HOLLY KIRBY LILLARD, J. CONCUR:

W. FRANK CRAW

FORD, P. J., W.

S.

DAVID R. FARMER, J.