The opinion of the court was delivered by: McMAHON, District Judge.
MEMORANDUM DECISION AND ORDER DENYING DEFENDANT'S MOTION TO
DISMISS ON GROUNDS OF FORUM NON CONVENIENS
This is another in a series of cases brought by Plaintiff
International Business Machines ("IBM") against a former senior
executive who left IBM and collected incentive compensation (in
the form of stock options) pursuant to IBM's 1994 Long Term
Performance Plan ("LTPP"). That plan, inter alia, provides for
forfeiture of the pre-tax proceeds from any exercise of said
options if, within six months of exercise, the optionee renders
any services for an IBM competitor. In each of these actions,
IBM seeks to enforce its right to forfeiture of the incentive
compensation because the employee went to work for a competitor
within six months after exercising his IBM options. Each
action has its own unique twist. This one is, "The Case of the
The defendant, Anders Harrysson, a Swedish national, was
employed by IBM Svenska Aktiebolog (IBM-Sweden), a wholly-owned
subsidiary of IBM, from 1984 until mid-1998, when he resigned.
During the last two years of his tenure with the company,
Harrysson worked in Westchester County, New York, at IBM World
Headquarters, although he remained on the payroll of IBM-Sweden.
He was the Program Director of Systems Integration Marketing for
the Server Group and also served as Intelligence Leader on Sun
Microsystems ("Sun") in IBM's Corporate Champion Program, a
system by which IBM monitors key competitors and performs long
and short term assessments of their competitive threat.
Harrysson thus served in a competitor-sensitive position.
In 1995, 1996, 1997 and 1998, Harrysson was granted an
incentive stock option award by IBM (the parent), contingent on
his signing a form agreement regarding that award. In pertinent
part, each such agreement provided that Harrysson had read the
1994 LTPP and agreed to comply with its terms. In 1997 and 1998,
Harrysson not only signed such an agreement but made an audio
tape recording affirming its terms. Had Harrysson not signed
such an agreement, IBM would not have awarded him the stock
In each and every such agreement, Harrysson agreed to submit
to the exclusive jurisdiction and venue of the federal and state
courts in Westchester County, New York to resolve any disputes
that might arise out of or relate to the agreement. The
agreements themselves were governed by New York law.
On April 28, 1998, Harrysson exercised certain of his options.
The complaint does not indicate whether he realized profits or
On or about June 9, 1998, Harrysson advised IBM that he
intended to resign from IBM and go to work for Sun, the very
company whose program he had been monitoring for IBM. Harrysson
returned to Sweden and resigned from IBM on July 31, 1998. In
September 1998 — within six months of his exercise of the
options — Harrysson went to work for Sun in Sweden.
On December 11, 1998, IBM notified Harrysson that it was
rescinding his exercise of options and demanded the return of
his gains or the shares that he had acquired. Needless to say,
Harrysson has not complied with that demand. IBM has therefore
filed suit this action.
Harrysson moves to dismiss on the ground of forum non
conveniens. For purposes of this motion, he concedes that
mandatory forum selection clauses should control absent a strong
showing that they ought to be set aside. See M/S Bremen v.
Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 1916,
32 L.Ed.2d 513 (1972). And he also concedes that all but one of the
various public and private interest factors for determining
forum non conveniens motions — first set forth by the United
States Supreme Court in Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947) — also weigh against
granting his motion. However, Harrysson avers that IBM cannot
enforce any judgment against him in the United States, because
he has no assets here (a proposition that IBM does not dispute
at this juncture), and insists that Sweden, where he lives and
has all his assets, will not enforce this Court's judgment in
view of Sweden's hostility to restrictive covenants and the
like. He thus argues that the instant proceeding would be a
nullity, rendering the sole factor that weighs in his favor
The parties have submitted expert affidavits from Swedish
lawyers to demonstrate that trying this proceeding here (1)
would be a complete waste of everyone's time and money
(plaintiffs position); or (2) would not be a complete waste of
everyone's time and money, because the Swedish court might
consider the agreements to be valid and enforceable under
Swedish law (as "prorogation agreements"), and
would at the very least give some evidentiary weight to a U.S.
judgment (IBM's point of view).
There is no question that the issue of a judgment's
enforceability against plaintiff is far from clear — indeed, the
parties cannot even agree as to which aspect of Swedish law
would control on the merits. But this Court has not been
directed to any case in which the questionable enforceability of
an American judgment, without more, was deemed a sufficient
basis to dismiss on forum non conveniens grounds. On the
contrary, in the only case cited by defendant for the
proposition that lack of enforceability in Sweden is enough to
mandate dismissal. Blimpie International, Inc. v. ICA
Menyforetagen AB, 96 Civ. 3082, 1997 WL 143907 (S.D.N.Y. Mar.
25, 1997), Judge Sweet of this Court weighed the full panoply of
Gulf Oil factors and found that most of them pointed in the
direction of litigating in Sweden. He did note that the
inability to enforce the judgment (which the plaintiff conceded)
"weigh[ed] heavily" in favor of dismissal, but he hardly
premised his decision on that factor alone. The weight of that
single factor was buttressed by the ample weight of such factors
as: access to proof, the lack of availability of process to
compel third-party witnesses to testify in the United States,
and the need to translate almost all of the documentary evidence
from Swedish to English. None of those factors is present in
this case; indeed, plaintiff concedes as much.
Furthermore, IBM's inability to locate assets against which it
can enforce any judgment it may one day obtain cannot be
determined for all time to come. It may well be that Harrysson
has no assets in the United States today (and for purposes of
the instant motion I will accept defendant's representation to
that effect). But the life of a judgment is long, and what is
true today may not be true tomorrow. Should Harrysson remain
employed by Sun, which is also a United States-based company, he
may one day have stock options or restricted stock that can be
attached in this country. He may acquire other U.S. securities
for his investment portfolio. He may one day be required to work
in this country for his new employer, which would necessitate
his having a bank account and facilitate garnishment of his
wages. Or he may obtain assets in another country, one which
will more readily recognize and enforce a U.S. judgment.
Where the plaintiff received a demonstrated benefit under the
agreement that contains the mandatory forum selection clause,
and where every other convenience factor militates in favor of
adjudicating the matter here, IBM is free to come before the
chosen forum, in the hope that Harrysson will not be willing or
able to avoid acquiring assets in a locality where they can fall
into an American judgment creditor's hands. Of course, plaintiff
assumes a certain risk when it chooses to litigate here, but IBM
is obviously aware of that risk and willing to assume it.
This Court is not willing to give every citizen of Sweden — or
any other country — a free pass to avoid litigating claims in
the United States when it has agreed to do so,*fn1 as long as
the only potential inconvenience to either side is one that the
party being inconvenienced — in this case, IBM — prefers to
waive. The balance of public and private interest factors
weighing in favor of ...