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Heraeus Medical, LLC v. Zimmer, Inc.

Supreme Court of Indiana

December 3, 2019

Heraeus Medical, LLC, et al. Appellants (Defendants)
v.
Zimmer, Inc., et al. Appellees (Plaintiffs)

          Argued: September 26, 2019

          Appeal from the Kosciusko Superior Court, No. 43D04-1802-PL-21 The Honorable David C. Cates, Judge.

         On Petition to Transfer from the Indiana Court of Appeals, No. 18A-PL-1823

          ATTORNEYS FOR APPELLANTS ROBERT G. DEVETSKI PETER D. HAMANN BARNES & THORNBURG LLP SOUTH BEND, INDIANA MARK J. CRANDLEY BARNES & THORNBURG LLP INDIANAPOLIS, INDIANA GERALD E. BURNS PATRICK D. DORAN BUCHANAN INGERSOLL & ROONEY, PC PHILADELPHIA, PENNSYLVANIA

          ATTORNEYS FOR APPELLEES JOSHUA B. FLEMING LUCY R. DOLLENS QUARLES & BRADY LLP INDIANAPOLIS, INDIANA

          OPINION

          RUSH, CHIEF JUSTICE.

         Indiana courts employ the "blue pencil doctrine" to revise unreasonable noncompetition agreements. This doctrine, though, is really an eraser.

         Under the blue pencil doctrine, courts can make overbroad covenants reasonable by deleting language, but they may not add terms-even if the agreement contains a clause authorizing a court to do so. Here, the overbroad covenant cannot be blue-penciled to render it reasonable; so we vacate the section of the trial court's preliminary injunction purporting to enforce that provision.

         Facts and Procedural History

         Zimmer employee Robert Kolbe signed a noncompetition agreement (Kolbe Agreement) soon after he transitioned into a group director role. At issue today is a provision within the Kolbe Agreement-a nonsolicitation covenant.

         That nonsolicitation covenant, which Zimmer drafted, prohibited Kolbe from recruiting Zimmer employees to work for a competitor. At the time, Zimmer was the exclusive United States distributor of one of Heraeus's major medical products.

         But a couple years later, Heraeus created an affiliate-Heraeus Medical-to sell its products in the United States. Kolbe then left Zimmer and joined Heraeus Medical to build a sales team. In his new role, Kolbe recruited agents "on a weekly basis" for Heraeus Medical. Eventually, several positions at Heraeus Medical were filled by former Zimmer employees.

         Litigation ensued. Asserting multiple claims, Zimmer sought damages from Heraeus Medical, Kolbe, and other former employees.

         As relevant here, Zimmer alleged that Kolbe violated the nonsolicitation covenant by recruiting former Zimmer employees to work for Heraeus Medical. Zimmer also sought a preliminary injunction to enforce the Kolbe Agreement. After a hearing, the trial court ...


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