185 F. Supp. 3d 916
M.D. La.2016Background
- Plaintiffs (Waguespack, Powell, Lindsey) were Louisiana-based Medtronic sales employees who signed employment agreements containing Minnesota choice-of-law/forum clauses and non‑competition/non‑solicitation covenants.
- Plaintiffs resigned and took jobs with competitor K2M; they filed a Louisiana declaratory judgment action seeking to invalidate the forum, choice‑of‑law, and non‑compete provisions under La. R.S. § 23:921.
- Medtronic filed a later suit in Minnesota (removed to federal court) seeking to enforce the agreements; Medtronic moved to transfer/seek enforcement and to remand the Minnesota action.
- The Middle District of Louisiana issued a TRO, held a hearing, and considered (1) whether it should apply the first‑filed rule, (2) whether Louisiana law governs the contract disputes, (3) constitutionality challenges to § 23:921, and (4) whether the non‑competes satisfy § 23:921(C).
- Court concluded Louisiana was the first‑filed forum, invalidated the forum and choice‑of‑law clauses under § 23:921(A)(2), found the geographic scope of the non‑competes insufficient under § 23:921(C), granted a preliminary injunction preventing Medtronic from prosecuting the Minnesota suit to enforce the agreements, and denied Medtronic’s motion to transfer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Application of first‑filed rule | Louisiana suit filed first; forum should decide overlapping dispute | Minnesota suit later filed; Medtronic sought Minnesota forum | Court applied first‑filed rule: Louisiana case proceeds (no anticipatory‑suit exception) |
| Validity of forum and choice‑of‑law clauses under La. R.S. § 23:921(A)(2) | Clauses are void because not expressly, knowingly, voluntarily ratified after injury | Enforcement protected by First Amendment petitioning and federal forum‑selection principles | Clauses void under § 23:921(A)(2); Louisiana public policy controls; First Amendment/Noerr arguments rejected |
| Constitutionality of § 23:921 (Dormant Commerce Clause & First Amendment) | N/A (plaintiffs rely on statute) | Statute unduly burdens interstate commerce and impairs petitioning rights | Statute upheld as applied here: nondiscriminatory, legitimate local interest, incidental burden not excessive; Noerr‑Pennington does not bar injunction |
| Enforceability of non‑competition clauses under § 23:921(C) | Non‑competes fail § 921(C) because geographic parishes/municipalities are not specified/clearly discernible | Clauses are identifiable by employee territories; enforceable under other Louisiana appellate decisions | Non‑competes invalid: agreements lack the required express, clearly discernible listing of parishes; preliminary injunction granted |
Key Cases Cited
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (choice‑of‑law governed by forum state)
- Cardoni v. Prosperity Bank, 805 F.3d 573 (5th Cir.) (preliminary injunction factors)
- W. Gulf Mar. Ass’n v. ILA, 751 F.2d 721 (5th Cir.) (first‑filed/priority of jurisdiction principle)
- Schauss v. Metals Depository Corp., 757 F.2d 649 (5th Cir.) (first‑filed rule discussion)
- Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947 (5th Cir.) (first‑filed court should decide subsequent related suits)
- Pike v. Bruce Church, Inc., 397 U.S. 137 (dormant Commerce Clause balancing test)
- Oregon Waste Sys. Inc. v. Dep’t of Envtl. Quality, 511 U.S. 93 (dormant Commerce Clause: discrimination vs. incidental effects)
- City of Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365 (Noerr‑Pennington and petitioning immunity)
- Atl. Marine Constr. Co. v. U.S. Dist. Court, 134 S. Ct. 568 (forum‑selection clauses presumed enforceable when valid)