United States Court of Appeals For the First Circuit

No. 24-1424

BEIJING ABACE BIOLOGY CO., LTD.,

Plaintiff, Appellant,

v.

CHUNHONG ZHANG and MTOZ BIOLABS, INC.,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Indira Talwani, U.S. District Judge]

Before

Rikelman, Selya, and Kayatta, Circuit Judges.

Willard C. Shih, with whom Stephen T. Melnick, Littler Mendelson, P.C., and Wilentz, Goldman & Spitzer P.A. were on brief, for appellant. Zackary L. Stillings, with whom Yuanyou Sunny Yang and Frost Brown Todd, LLP were on brief, for appellees.

December 2, 2024 SELYA, Circuit Judge. Plaintiff-appellant Beijing Abace

Biology Co., Ltd. (Abace) challenges the district court's entry of

summary judgment in favor of defendants-appellees Dr. Chunhong

Zhang (Dr. Zhang) and MtoZ Biolabs, Inc. (MtoZ). Discerning no

error, we affirm.

I

We rehearse the relevant facts and travel of the case.

In that endeavor, we "scrutinize the record in the light most

favorable to the summary judgment loser and draw all reasonable

inferences therefrom to that party's behoof." All. of Auto. Mfrs.

v. Gwadosky,

(1st Cir. 2005).

Abace and Creative Dynamics, Inc. (Creative Dynamics)

are affiliated companies that provide research and development

resources in the life sciences and pharmaceutical spaces. Both

companies were founded in 2004. Abace is headquartered in Beijing

and Creative Dynamics is headquartered in New York. Although the

precise nature of the corporate relationship between Abace and

Creative Dynamics is murky, the record suggests that the two firms

have a "contract" relationship and that some corporate officers

work for both companies.1

In December of 2014, Abace hired Dr. Zhang. She became

a "supplier" in its creative proteomics department. As such, Dr.

1 We need not probe this too deeply as only Abace — and not Creative Dynamics — is a party to this appeal.

- 2 - Zhang was required to "find the product or service" requested by

"go[ing] online, like Google or Baidu [a Chinese search engine],

and search[ing] which company can provide this [product or service]

and then call[ing] them to ask them for the price and how long

they can deliver this [product or service] and then giv[ing] the

supplier's price back to [sic] sales person." While working for

Abace, Dr. Zhang was stationed in China.

During her tenure with Abace, Dr. Zhang signed several

employment-related agreements. These included two so-called

Cadres Agreements, dated January 9, 2016, and November 2, 2016,

respectively.2 The agreements are the same in all aspects relevant

to this decision. Separate and apart from the Cadres Agreements,

the record reflects that the parties entered into a Confidentiality

and Non-Competition Agreement (the Non-Compete Agreement) and a

Labor Contract, both dated November 2, 2016.

Each of the Cadres Agreements stated that it "appli[ed]

to all current employees of Creative Dynamics and CD Biosciences

(CD Inc), i.e., all current employees of the Company." We assume

— favorably to Abace — that Dr. Zhang fell within the reach of

those agreements.

2 Although these are called the "Creative Dynamics Cadres Agreements," the signatories are Abace and Dr. Zhang. This discrepancy is unexplained, but it is not material to the resolution of this appeal.

- 3 - Those agreements also defined certain terms. As

relevant here, those agreements defined "senior cadre[s]" as "the

first and second level leaders of each Division," meaning the

"primary and secondary head of each Division." Additionally, they

defined "senior executive[s]" as those persons who "[e]xercise the

right of operation and management" and who have certain powers

over personnel. What is more, the January Cadres Agreement stated

that, "[w]ithin 2 years from the date of termination of senior

executives, they shall not hold a position or hold a part-time job

in an organization with similar business and competitive

relationship with the Company."

On May 1, 2017, Dr. Zhang's employment with Abace was

terminated, and she signed an employment separation certificate.

This certificate referred to the obligations in the Non-Compete

Agreement.

In September of 2017, Dr. Zhang co-founded MtoZ, a

company headquartered in Massachusetts. MtoZ provides proteomics,

metabolomics, bioinformatics, and biopharmaceutical analysis

services to researchers. See About Us, MtoZ-Biolabs,

https://www.mtoz-biolabs.com/about-us.html

[https://perma.cc/5SJQ-4NCF].

Abace responded to this initiative by filing an action

against Dr. Zhang and MtoZ in the United States District Court for

- 4 - the District of Massachusetts.3 In the operative pleading (the

second amended complaint), it claimed that Dr. Zhang had breached

both her contract with Abace and her fiduciary duty to Abace; that

MtoZ had tortiously interfered with Abace's business and business

relationships; and that Dr. Zhang and MtoZ were liable for unjust

enrichment.4 After pretrial discovery was completed, all parties

moved for summary judgment. The district court granted summary

judgment in favor of Dr. Zhang and MtoZ. See Creative Dynamics,

Inc. v. Zhang, No. 20-11711,

(D. Mass. Mar. 31,

2024). This timely appeal followed.

II

Summary judgment is appropriate when "the movant shows

that there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law." Fed. R. Civ.

P. 56(a). A dispute is genuine if "the evidence about the fact is

such that a reasonable jury could resolve the point in favor of

the nonmoving party." Rivera-Muriente v. Agosto-Alicea,

(1st Cir. 1992) (quoting United States v. Plat 20, Lot

17, Great Harbor Neck,

(1st Cir. 1992)). A fact

3 There were additional parties below (including Creative Dynamics, as a plaintiff). None of these parties is a party to this appeal. 4 Simultaneously, Abace sought relief against Dr. Zhang in

China in both arbitration and court proceedings. Neither of those proceedings is still pending, and we make no further mention of them.

- 5 - is material if it could affect the outcome of the case. See Baker

v. St. Paul Travelers Ins. Co.,

(1st Cir. 2012).

"The summary judgment ritual is standard fare: once the movant

'adumbrate[s] an absence of evidence to support the nonmoving

party's case,' . . . the burden shifts to the nonmovant to

establish the existence of a genuine issue of material fact."

Boykin v. Genzyme Therapeutic Prods., LP,

, 60 (1st

Cir. 2024) (alteration in original) (quoting Brennan v. Hendrigan,

(1st Cir. 1989)).

We review the district court's grant of summary judgment

de novo. See Spencer v. Roche,

(1st Cir. 2011).

We peruse the record in the light most hospitable to the nonmovant

of the granted motion and draw all reasonable inferences in the

nonmovant's favor. See

III

This case arises under the aegis of diversity

jurisdiction. See

(a). The parties agree that

the substantive law of China controls. The district court accepted

this agreement, and so do we. See Borden v. Paul Revere Life Ins.

Co.,

(1st Cir. 1991) ("Where . . . the parties

have agreed about what law governs, a federal court sitting in

diversity is free, if it chooses, to forgo independent analysis

and accept the parties' agreement.").

- 6 - In undertaking to apply Chinese law, we do not write on

a pristine page. "[T]he task of deciding foreign law [is] a chore

federal courts must often perform." Nowak v. Tak How Invs., Ltd.,

(1st Cir. 1996) (second alteration in original)

(quoting Mercier v. Sheraton Int'l, Inc.,

(1st

Cir. 1992)). The Civil Rules instruct that "[i]n determining

foreign law, [a federal] court may consider any relevant material

or source, including testimony, whether or not submitted by a party

or admissible under the Federal Rules of Evidence." Fed. R. Civ.

P. 44.1. This approach parallels the approach appropriately taken

to the determination of state law by a federal court. See Kunelius

v. Town of Stow,

(1st Cir. 2009) ("Although we have

no single Polaris to guide our prediction of the state court's

resolution of [the relevant] questions, we rely on analogous cases

decided in the . . . state . . . and other secondary

sources . . . .").

China is a civil law jurisdiction — a fact that requires

us to decipher the law primarily from the constitution, statutes,

and regulations. See Qiang Bjornbak et al., China,

, 550 (2006) ("China is a civil law jurisdiction . . . ."); see

also China, Fed. Jud. Ctr.: Judiciaries Worldwide,

https://judiciariesworldwide.fjc.gov/country-profile/china

[https://perma.cc/BD4J-YKAJ]; cf. Palencia v. Perez,

(11th Cir. 2019) ("The generally recognized sources of

- 7 - law in [a civil law] jurisdiction are constitutional provisions,

statutes, administrative regulations, and customs.").5 In the case

at hand, the district court appropriately relied upon "the

Constitution of the People's Republic of China, statutes and

decrees, administrative orders, and local rules" as well as the

judicial interpretations issued by the Supreme People's Court

(China's highest court). See Creative Dynamics,

,

at *3. The parties provided much of this material, including

certified translations of reported cases and judicial

interpretations. In addition, the parties furnished the court

with expert reports that discuss these materials and the state of

the law in China.

We hasten to add that the district court was not

obligated to give the views of any expert any particular weight.

See Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co.,

, 36 (2018) (holding that even foreign government's statements

are not binding because court may consider any relevant material).

In the last analysis, the dimensions of foreign law must be

determined by the inquiring court, not simply by rubber-stamping

5Abace disputes the use and reliability of the Judiciaries Worldwide website. But as Dr. Zhang notes, this is a resource provided by the Federal Judicial Center — a resource that is commonly used by federal courts in a wide variety of contexts. See, e.g., Victor v. Nebraska,

(1994) (citing Federal Judicial Center for "definitions of reasonable doubt most widely used in the federal courts").

- 8 - the views of some expert witness. See Balkan Energy Ltd. v.

Republic of Ghana,

, 153 n.5 (D.D.C. 2018).

Instead, an inquiring court must "regard the matter of

foreign country law as purely a 'question of law.'" Kalmich v.

Bruno,

(7th Cir. 1977) (quoting Fed. R. Civ. P.

44.1). The court must answer that question of law through its own

research and analysis. See

Appellate review is de novo, see

Robidoux v. Muholland,

(1st Cir. 2011), and the

lower court's answer to the question must be fairly supportable.

Cf. R.W. Int'l Corp. v. Welch Foods, Inc.,

(1st

Cir. 1996) (stating that federal courts may make "predict[ions]"

as to state law if "reasonably clear" (quoting VanHaaren v. State

Farm Mut. Auto. Ins. Co.,

(1st Cir. 1993))).

IV

Given that China is a civil law jurisdiction, we start

our analysis with the relevant statutory text. Article 24 of the

Labor Contract Law states that "[p]ersonnel subject to non-

competitive restrictive covenant [sic] shall be limited to the

employer's senior management personnel, senior technical personnel

and other personnel who are obliged to keep confidentiality." See

Hunan Mingjing New Bldg. Materials Co. v. Zhang Yongxing, No. 4486,

at 10 (Changsha Hunan Interm. People's Ct. June 13, 2022)

- 9 - (interpreting labor contract law of People's Republic of China).6

The parties dispute whether Dr. Zhang was properly classified as

senior management or technical personnel or had other

confidentiality obligations.7 We conclude that Dr. Zhang does not

fit into either of these categories and, therefore, any non-compete

contractual provisions are unenforceable under Chinese law.

In analyzing this issue, the parties quarrel about

whether we should look primarily to the courts of Beijing, rather

than the courts of China generally. Abace argues that only law

from Beijing courts is binding, and that the district court erred

in its categorization of Chinese courts as less geographically

rigid than U.S. courts. On this point, however, the parties'

contrasting views are purely academic: Beijing courts agree with

the dispositive principle in this case, which is that non-compete

agreements are only enforceable against senior management or

technical personnel and employees with confidentiality

obligations. See, e.g., Beijing Golden Cap. Gen. Aviation Co. v.

Gao Hui, No. 3362, at 8 (Beijing 3d Interm. People's Ct. Mar. 29,

6 The certified translations of these decisions are available in the appendices provided by the parties, and the page numbers cited reflect the pagination provided there. 7 Although MtoZ is also named as a defendant and appellee,

the parties agree that its liability, if any, is coterminous with that of Dr. Zhang. Consequently, we refer to Dr. Zhang for the most part as if she was the sole defendant-appellee. Our ruling, of course, extends to the claims brought against MtoZ.

- 10 - 2021). And because both parties have cited non-Beijing cases, we

do not hesitate to rely on those cases as persuasive authority.

A

Courts have made pellucid that — under Chinese law —

"[e]mployers can only sign [binding] non-competition agreements

with employees for specific job positions." Shengli Oilfield

Furuite Petroleum Equip. Co. v. Wang Zhifeng, No. 2250, at 19

(Dongying Shandong Interm. People's Ct. Feb. 16, 2022). They also

have made pellucid that employers "cannot require employees to

assume non-competition obligations for general job positions."

Thus, the fact that Dr. Zhang signed one or more agreements

containing non-compete provisions does not end our inquiry.

On this record, we are constrained to find that Dr.

Zhang's role fell within the category that Chinese courts have

excluded from the purview of non-compete agreements. Abace

conceded at the summary judgment hearing that Dr. Zhang was not

"senior technical personnel." What is more, neither Chinese

statutes nor Chinese courts have defined with particularity which

employees are to be considered senior management personnel. Even

so, common understanding can guide our approach. To rise to the

level of senior management, it seems inexorable that the role must

involve some exercise of discretion in a company's affairs. See

Management, Black's Law Dictionary (12th ed. 2024). Here, there

is not a scrap of evidence that Dr. Zhang was senior management

- 11 - personnel. Indeed, the record does not show that she had any

management responsibilities.

Dr. Zhang's job responsibilities, by contrast, appear to

fall within the realm of general sales. Ordinarily, general sales

personnel have been held to fall short of the requisite level.

See Hunan Mingjing, No. 4486, at 10; Zhongshan Laser Ent. Co. v.

Xu Jun, No. 3271, at 4 (Zhongshan Guangdong Interm. People's Ct.

May 6, 2021). So it is here. The general sales roles described

in Hunan Mingjing and Zhongshan Laser seem to be fairly comparable

to Dr. Zhang's role in level of responsibility: her work primarily

involved using Google and Baidu to connect salespeople with

vendors.

To cinch the matter, Abace introduced no evidence that

Dr. Zhang was either in a supervisory or management role. On the

contrary, the record indicates that Dr. Zhang started in an entry

level position: an Abace representative testified that when Dr.

Zhang joined the company, she was a "graduate without any

experience." And even after Dr. Zhang was promoted, there is no

evidence that her duties ever extended beyond "communicat[ing]

with the supplier," "communicat[ing] with the marketing

department," and "customer service."

A review of the agreements at issue here confirms our

commonsense understanding of the relevant terms in Chinese law.

Even under the definitions in the Cadres Agreements, Dr. Zhang is

- 12 - neither a "senior cadre" nor a "senior executive" to whom a non-

compete agreement might apply. "Senior cadres" are defined as

"the first and second level leaders of each Division, i.e., those

position [sic] higher than the head of the battle group." The

record contains no evidence that Dr. Zhang came within this

definition. "Senior executive[s]" are defined as employees who,

among other things, "[e]xercise the right of operation and

management," who can "employ or dismiss subordinates," and who can

"transfer personnel." Once again, the record is devoid of any

evidence that Dr. Zhang either performed any of these functions or

— as a practical matter — had the right to do so notwithstanding

the language in the contracts. And in any event, Abace has not

argued that she did.

Abace has a fallback position. It contends that Dr.

Zhang's non-compete obligation is enforceable because she "signed

the agreement indicating that she was a Cadre — explicitly defined

by the Agreement as a senior executive." This contention lacks

force. First, "senior cadre" and "senior executive" have different

definitions in the Cadres Agreements, and only senior executives

are defined as having management responsibilities. Second,

Chinese courts have rejected nearly identical arguments. See

Qingdao Xingyue Iron Tower Co. v. Yin Yichang, No. 13686, at 4-5

(Jiaozhou Shandong People's Ct. Mar. 16, 2002) (holding that

signing agreement containing non-compete provisions was "not

- 13 - sufficient to identify the defendant . . . as a non-competition or

duty of confidentiality person," because agreement was "generally

applicable to different positions and employees").8 It is clear,

then, that the Cadres Agreements — as well as any other agreement

signed by Dr. Zhang — are not dispositive as to the analysis of

whether Dr. Zhang's role satisfied the relevant legal standard.

In a last-ditch effort to gain some traction, Abace

insists that the record is tenebrous as to whether every employee

is offered the Cadres Agreement. This lack of clarity, Abace

continues, extends to whether Dr. Zhang was offered the agreement

only after being promoted. At oral argument, Abace suggested that

any sufficiently senior employee could be subject to a non-compete

regardless of whether he can plausibly lay claim to being

management or technical personnel. Building on this porous

foundation, Abace summarily concludes that these are genuine

disputes of material fact sufficient to defeat summary judgment.

The fly in the ointment is that these are not material

facts: they do not have any bearing on the outcome of the case.

Even if the Agreements did establish that Dr. Zhang was a senior

executive, that would be insufficient to bridge the gap that

separates the general run of executives from senior management or

8 In light of the facts of the cited case, the date provided in the case translation may be incorrect. The defendants' expert report lists the year of decision as 2021. This discrepancy, though, is not material to our decision, and we do not pursue it.

- 14 - technical personnel. Because Abace's proposed interpretation —

that any sufficiently senior employee could be subject to a non-

compete regardless of whether he could plausibly lay claim to being

management or technical personnel — contradicts the explicit text

of Article 24, we reject it.

In all events, we are not convinced by Abace's contention

that Dr. Zhang's signing of the agreements is conclusive evidence

that she was a senior executive. Those agreements clearly

contemplate that employees who do not meet the definitions of

"senior executive" and "senior cadre" may nonetheless be required

to sign Cadres Agreements. And even if it is true that an employee

must achieve an arbitrary internal seniority level to be offered

such a contract, that would not render the employee either a senior

executive or a senior cadre under the Agreements' own definitions.

To sum up, as we have explained, Chinese law makes plain

that it is the nature of the job description, not the employer's

label, that is the relevant inquiry as to whether a non-compete

provision can apply to a role. See Qingdao Xingyue, No. 13686, at

4-5. Viewing the record as a whole, then, we discern no genuine

issue of material fact. And taking the established facts in the

light most hospitable to Abace, we nonetheless conclude that the

district court did not err in determining that Dr. Zhang — when

employed by Abace — was neither senior management nor senior

- 15 - technical personnel such as would bind her to a non-compete

provision under Chinese law.

B

The final category of individuals that may be subject to

a non-compete agreement under Chinese law includes "other

personnel with confidentiality obligations." Hunan Mingjing, No.

4486, at 10. This category has been limited by courts to those

employees who have access to confidential information that is not

accessible to the average employee or to the public. See Foshan

FIND Culture & Art Co. v. Xiang Mingqi, No. 15463, at 10 (Foshan

Guangdong Interm. People's Ct. Nov. 21, 2022). In other words,

the information must be beyond "the normal scope of information

that a [general employee] can understand." Hunan Mingjing, No.

4486, at 10-11. Thus, for non-compete restrictions to apply,

courts have required that employers demonstrate that an employee

had access to "trade secrets." Zhongshan Laser, No. 3271, at 4.

Abace does not identify any such trade secrets in its

brief. Nor is there any proof of them in the record. To fill

this void, Abace points only to Dr. Zhang's use of "information

about our business, our customer [sic] and a lot of documents."

But under Chinese law, this is insufficient to demonstrate that

she had information that was not accessible to average employees.

See Hunan Mingjing, No. 4486, at 10-11 (holding that former

employee's knowledge of customers was not enough for non-compete

- 16 - agreement to be enforceable); Foshan FIND, No. 15463, at 10

(holding that "general knowledge, experience, and skills" acquired

by employee are distinguishable from "trade secrets" and are

insufficient to establish confidentiality obligation); Hefei Yuehe

Educ. & Training Sch. Co. v. Chen Mei, No. 3423, at 7 (Hefei Anhui

Interm. People's Ct. June 11, 2021) ("[The employer] has no

evidence to prove that the above information constitutes a trade

secret that needs to be kept confidential. . . . If non-

competition restrictions are imposed on workers on this ground, it

would be too harsh for workers and would also be contrary to the

provisions of the Labor Contract Law."). Dr. Zhang's knowledge of

general business information appears to be no different in kind

than what any employee would have from a former employer, and Abace

has not argued to the contrary.

We are aware that this holding is in tension with the

language of the agreements. For example, the Non-Compete Agreement

defines "trade secrets" as "customer, product, procedure, business

and service information" of Abace "or any affiliated business

entity." But — as the district court concluded, see Creative

Dynamics,

, at *6-7 — we cannot give effect to this

language because it contravenes Chinese law. See Hefei Yuehe, No.

3423, at 7 (distinguishing trade secrets from general business

information); cf. Paul Arpin Van Lines, Inc. v. Universal Transp.

Servs., Inc.,

(1st Cir. 1993) (holding that "an

- 17 - otherwise valid contract that results in the violation of a public-

protection statute or regulation is unenforceable"). Put bluntly,

to the extent that this language encompasses ordinary business

information that would be available to general employees, it cannot

serve as a basis to trigger the non-competition obligation against

Dr. Zhang.

V

We need go no further. We discern no genuine issue of

material fact and hold that a necessary condition for the

enforcement of a non-compete agreement under Chinese law has not

been satisfied. Accordingly, the district court did not err either

in granting Dr. Zhang's motion for summary judgment or in denying

Abace's cross-motion.

Affirmed.

- 18 -