Background - Osborne worked as a sales representative for Brown & Saenger in Fargo under yearly employment agreements; the 2015 agreement controls. - The 2015 agreement contained a 2-year, 100-mile non-compete clause and a choice-of-law/forum clause selecting South Dakota law and Minnehaha County, SD, courts as exclusive forum. - Brown terminated Osborne in January 2017; Osborne sued in North Dakota alleging retaliation, improper deductions, breach of contract, and sought a declaratory judgment that the non-compete was void and a preliminary injunction preventing its enforcement. - Brown moved to dismiss for improper venue based on the forum-selection clause; the district court granted the dismissal without ruling on the injunction motion. - Brown separately sought a preliminary injunction in the South Dakota court to enforce the non-compete against Osborne. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---|---|---| | Enforceability of forum-selection clause | Forum clause is unenforceable because enforcement would allow evasion of North Dakota public policy forbidding restraints on lawful trade | Forum clause is valid and requires dismissal; parties agreed to South Dakota law and forum | Forum-selection clause unenforceable as applied to Osborne's declaratory-judgment claim because it would facilitate enforcement of a non-compete contrary to ND public policy | | Validity of non-compete under ND law | Non-compete void under N.D.C.C. § 9-08-06 as restraint on lawful profession/trade | Non-compete enforceable under South Dakota law per choice-of-law clause | Non-compete unenforceable under § 9-08-06 to the extent it restrains Osborne from exercising a lawful profession, trade, or business in North Dakota | | Standard of review for Rule 12(b)(3) dismissal based on forum clause | Plaintiff urged court to apply de novo review | Defendant implicitly accepted de novo review | Court applied de novo review (issues of contract interpretation reviewed de novo) | | Public-policy exception to forum clauses | North Dakota public policy against non-competes is strong; enforcement would be unfair/unreasonable under N.D.C.C. § 28-04.1-03(5) | Forum clauses are prima facie valid and should be enforced unless unjust or unreasonable | Enforcement of forum clause would be unfair/unreasonable because it would allow a foreign forum to enforce a restraint contrary to ND policy; clause set aside | ### Key Cases Cited M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (forum-selection clauses are prima facie valid but may be unenforceable if unreasonable or unjust) Global Seafood Inc. v. Bantry Bay Mussels Ltd., 659 F.3d 221 (2d Cir.) (de novo review for motions to dismiss under Rule 12(b)(3) when based on pleadings/affidavits) Servewell Plumbing, LLC v. Federal Ins. Co., 439 F.3d 786 (8th Cir.) (forum-selection clauses enforced unless invalid, unfair, or unreasonable) Lapolla Industries, Inc. v. Hess, 750 S.E.2d 467 (Ga. Ct. App.) (refusing to enforce forum/choice clauses where enforcement would evade Georgia public policy against non-competes) Beilfuss v. Huffy Corp., 685 N.W.2d 373 (Wis. Ct. App.) (choice-of-law/forum clauses invalid where they would undercut Wisconsin public policy on non-competes) Werlinger v. Mutual Service Cas. Ins. Co., 496 N.W.2d 26 (N.D.) (N.D. precedent recognizing non-compete clauses void under § 9-08-06) * Spectrum Emergency Care, Inc. v. St. Joseph’s Hosp. and Health Center, 479 N.W.2d 848 (N.D.) (reaffirming invalidity of restraints on trade under ND law)