913 F.3d 704
8th Cir.2019Background
- In March 2015 Gannon signed three contemporaneous employment documents with Medtronic: an Offer Letter, an Employee Agreement (containing a Minnesota forum-selection clause), and a one-page Repayment Agreement (guaranteed payments subject to repayment if Gannon left during the Guarantee Period).
- The Offer Letter made employment contingent on signing the Employee Agreement and Repayment Agreement and summarized the Repayment Agreement’s key repayment terms.
- Gannon left Medtronic in late 2016; Medtronic sued in Minnesota state court alleging breach of the Repayment Agreement (failure to repay guaranteed amounts).
- Gannon removed the state-court action to federal court based on diversity jurisdiction under 28 U.S.C. § 1332(a)(1).
- Medtronic moved to remand, arguing the Employee Agreement’s forum-selection clause barred removal; the district court granted remand, concluding the documents constituted one contract and the clause covered the Repayment Agreement.
- The Eighth Circuit affirmed, holding the three documents were parts of a single contract and the forum-selection clause unambiguously encompassed the Repayment Agreement.
Issues
| Issue | Plaintiff's Argument (Gannon) | Defendant's Argument (Medtronic) | Held |
|---|---|---|---|
| Whether the forum-selection clause in the Employee Agreement waived Medtronic’s right to removal for claims arising from the Repayment Agreement | The Repayment Agreement is a separate, free-standing contract that lacks a forum-selection clause, so removal was not waived | The Offer Letter, Employee Agreement, and Repayment Agreement were executed together for the same purpose and should be read as one contract; the forum clause therefore covers the Repayment Agreement | The documents are one contract under Minnesota law; forum clause applies and remand is proper |
| Whether the forum-selection clause’s phrase “arising out of or related to this Agreement” unambiguously covers the Repayment Agreement | The phrase is ambiguous and should be construed against Medtronic (the drafter), excluding the Repayment Agreement | The clause is unambiguous: “arising out of” covers direct disputes about the Employee Agreement; “related to” necessarily covers related employment documents like the Repayment Agreement | The clause unambiguously covers the Repayment Agreement; construing clauses to avoid internal conflict, the clause governs venue |
| Whether the Employee Agreement’s “Prior Agreements” provision prevents application of the forum clause to compensation-related agreements | The “Prior Agreements” clause means forum clause cannot affect compensation agreements like the Repayment Agreement | The specific forum-selection clause controls venue; the “Prior Agreements” language does not override a specific venue clause | The specific forum-selection clause governs; the “Prior Agreements” provision does not preclude its application |
| Standard for waiver of removal by contract | Waiver applies only if the contract that gave rise to the action contains a clear forum clause; because Repayment Agreement lacks one, no waiver | Contemporaneous documents creating a single contract can effect waiver through a clause in one document | Under Minnesota law, contemporaneous instruments may be read as one contract; waiver by forum clause is effective here |
Key Cases Cited
- Faltermeier v. FCA US LLC, 899 F.3d 617 (8th Cir. 2018) (standard of review for remand rulings)
- PR Group, LLC v. Windmill Intern., Ltd., 792 F.3d 1025 (8th Cir. 2015) (removal rights may be waived by clear and unequivocal agreement)
- Marso v. Mankato Clinic, Ltd., 153 N.W.2d 281 (Minn. 1967) (instruments executed at same time for same purpose are read together)
- Farrell v. Johnson, 442 N.W.2d 805 (Minn. Ct. App. 1989) (contracting parties’ intent governs whether separate documents form one agreement)
- Hilligoss v. Cargill, Inc., 649 N.W.2d 142 (Minn. 2002) (ambiguities construed against the drafter)
- Fortune Funding, LLC v. Ceridian Corp., 368 F.3d 985 (8th Cir. 2004) (avoid interpretation rendering clause meaningless)
- Burgi v. Eckes, 354 N.W.2d 514 (Minn. Ct. App. 1984) (specific contract terms govern over general provisions)
- Oster v. Medtronic, Inc., 428 N.W.2d 116 (Minn. Ct. App. 1988) (courts should harmonize conflicting contract clauses when possible)