The Minnesota Court of Appeals recently confirmed that parties to a non-compete agreement are supposed to mean what they say and say what they mean.
In a seemingly unremarkable conclusion, the Minnesota Court of Appeals found that after a jury and the district court finds that a defendant has breached his or her contract, the plaintiff is actually entitled to the remedies that were agreed to in the contract in the event of a breach.
In St. Jude Medical, Inc. v. Heath Carter et al., 899 N.W.2d 869 (Minn. Ct. App.2017), the Minnesota Court of Appeals considered a contractual provision that dictated the right to injunctive relief in the event of a breach, regardless of whether the criteria for injunctive relief under Minnesota law are met. The backdrop for the decision was a dispute between two competing medical device companies.Defendant Heath Carter was employed for plaintiff St. Jude in various positions over eight years, including research and development work. Mr. Carter and St. Jude entered into a non-compete agreement containing a remedies provision that provided (in part):
“Employee recognizes that irreparable injury will result to [St. Jude], that [St. Jude’s] remedy at law for damages will be inadequate, and that [St. Jude] shall be entitled to an injunction to restrain the continuing breach by Employee ….”
After a four-day jury trial regarding St. Jude’s breach of contract and tortious interference claims, the jury answered a special verdict question and found that defendant Carter had breached his employment contract. Because St. Jude indicated prior to trial that it was not seeking monetary damages for Carter’s breach of contract, the jury was not asked to make findings regarding damages. Instead, St. Jude was seeking equitable relief in the form of an injunction. Here comes the interesting part: although the district court acknowledged that it was “bound” by the jury’s finding and also “independently [found]” that Carter breached his employment contract, the district court determined that St. Jude was not entitled to injunctive relief because the trial court did not find that St. Jude had suffered irreparable harm. St. Jude apparently said to itself “we contracted for that!” and appealed.