Yost worked for Torrington Co. He left Torrington and went to work for a company that manufactured the same type of goods as Torrington. Torrington sued Yost, based on Yost’s alleged misuse of Torrington’s trade secrets. Yost moved to dismiss.
A party must be joined, if feasible, when that party’s absence would impair their interest or prejudice parties already in the lawsuit by subjecting them to a risk of multiple or inconsistent obligations.
Yost worked for Torrington Co., a bearings manufacturer. While with Torrington, Yost signed an agreement promising not to divulge trade secrets or confidential information. Yost left Torrington and went to work for INA Bearing Company, another bearings manufacturer. Torrington sued Yost, seeking an injunction and damages arising out of alleged use of Torrington’s trade secrets. Yost moved to dismiss for failure to join INA, an indispensable party, to the lawsuit.
Was INA Bearing Co. (Yost’s new employer) an indispensable party?
Yes. INA was an indispensable party; failure to join INA in the lawsuit defeated diversity jurisdiction and, based on factors set forth in Federal Rule of Civil Procedure 19(b), the matter had to be dismissed.
Nonjoinder in this case would impair the new employer’s interests (because it had an employment contract with Yost and Torrington was seeking injunctive relief preventing him from working for Torrington) and/or prejudice Yost (because he had an obligation to work for INA) and might subject Yost to inconsistent obligations (because Torrington was seeking injunctive relief).