RULING
These matters are before the Court on two motions. The first is a Motion for
I. Background
Plaintiffs Robby J. Waguespack (‘Wag-uespack”), Stephen Powell (“Powell”), and Lloyd Lile Lindsеy, III (“Lindsey”) (collectively, “Plaintiffs” or “Louisiana Representatives”) were sales employees for MSDU. MSDU — a Medtronic subsidiary— is a medical device company based out of Memphis, Tennessee, that operates Med-tronic’s spine business in Louisiana. While working for MSDU, Waguespack was a District Sales Manager with responsibility for all of Louisiana (except the Shreveport area), the southern one-third of Mississippi, and Beaumont, Texas. Powell and Lindsey were Sales Representatives in Baton Rouge, Louisiana.
As a condition of employment, Medtronic required Plaintiffs to sign Employment Agreements. The Employment Agreements contains a variety of restrictive covenants, including provisions that purport to prohibit Plaintiffs from competing with “MEDTRONIC” or soliciting its customers for a period of one year after the termination of their employment. The Employment Agreements also contain choice of law, choice of forum, and related clauses that essentially require the Employment Agreements to be interpreted under Minnesota law and that any litigation related to the agreement be prosecuted in a state court in Minnesota.
A week after being served with this suit, the defendants filed a second lawsuit (“the Minnesota Action”) in Minnesota state court naming Waguespack, K2M, Lindsey, and Powell as defendants. In the Minnesota Action, Medtronic asserted claims for declaratory relief and breach of contract. The Minnesota Action has been removed to federal court,
II. First-piled Rule
Because the first-filed rule gives the court discretion to dismiss a case in its entirety, and thus be dispositive of the rеmaining issues presented in these motions, it is logical to address the this issue first.
The Fifth Circuit has “long advocated that district courts exercise their discretion to avoid duplication of proceedings where related claims are being litigated in different districts.” Marks v. Mackey, No. 6:14-CV-00441,2014 WL 3530137 , at *2 (W.D.La. July 15, 2014) (quoting Schauss v. Metals Depository Corp.,757 F.2d 649 , 654 (5th Cir.1985)). Accordingly, “the court with prior jurisdiction over the common subject matter should resolve all issues presented in related actions.” W. Gulf Mar. Ass’n v. ILA Deep Sea Local M, S. Atl. & Gulf Coast Dist. of ILA; AFL-CIO,751 F.2d 721 , 730 (5th Cir.1985) (internal quotation omitted). As a matter of federal comity, the first-filed rale provides that “where two actions involving overlapping issues and parties are pending in two federal courts, there is a strong presumption across the federal circuits that favors the forum of the first-filed suit[J” Manuel v. Convergys Corp.,430 F.3d 1132 , 1135 (11th Cir.2005); Codie Co. v. Whataburger of Alice, Inc., 174 F.3d 599 , 603 (5th Cir.1999) (“Under the first-to-file rule, when related cases are pending before two federal courts, the court in which the case was last filed may refuse to hear it if the issues raised by the cases substantially overlap.”). A decision to apply the first-filed rule rests on two questions: “(1) whether the two pending actions are so duplicative that they involve substantially overlapping issues such that one court should decide both, and if so, (2) which of the two courts should take the case.” Mackey,2014 WL 3530137 at *3.
InforMD, L.L.C. v. DocRx, Inc. et al., Civil Action No. 13-533-JJB-SCR, Doc. 73 at *3 (M.D. La. Aug. 31, 2015). In the instant case, the parties do not dispute that the action filed in this Court substantially overlaps with the Minnesota Action. It is also undisputed that Plaintiffs filed the declaratory judgment suit in Louisiana before the defendants filed their complaint in thе Minnesota case.
In answering which Court should take the case, “[t]he Fifth Circuit adheres to the general rule that the court in which the action is first filed is the appropriate court to determine whether subsequently filed cases involving substantially similar issues should proceed.” Save Power Ltd. v. Syntek Fin. Corp.,
III. Motion for Preliminary Injunction
In order to be entitled to injunctive relief, a party must demonstrate: (1) a substantial likelihood of success on the merits; (2) that it will suffer irreparable injury' if the injunction is not granted; (3) that the irreparable injury outweighs the harm to the defendant; and (4) that granting the preliminary injunction will not dis-serve the public interest. Cardoni v. Prosperity Bank,
A. Likelihood of Success on the Merits
Plaintiffs argue that they have a likelihood of success on the mеrits of their declaratory judgment claims because: (1) the choice of forum and choice of law clauses in the Employment Agreements are null and void pursuant to La. R.S. § 23:921(A)(2); and (2) the Employment Agreements’ non-competition clauses are unenforceable because they fail to comply with the requirements of La. R.S. § 23:921(C).
Defendants make three independent arguments as to why Plaintiffs are unlikely to succeed on the merits: (1) as applied, § 921 prohibits Defendants from prosecuting the Minnesota Action, which violates their First Amendment rights under the Noerr-Pennington doctrine; (2) as applied, § 921 violates the Dormant Commerce Clause because the statute constitutes an impermissible burden on interstate commerce; and (3) the non-competition clauses are valid and enforceable under § 921(C).
The likelihood of success on the merits centrally turns on which states’ law applies — if Louisiana’s law applies regarding the enforceability of the non-competition agreements, then Plaintiffs may have a
1. Choice of Lavo and Choice of Forum Clauses
Because this is a diversity case, the forum state of Louisiana provides the law that governs this choice-of-law analysis. See Klaxon Co. v. Stentor Elec. Mfg. Co.,
The Court agrees with Plaintiffs that Louisiana has a strong public policy against forum selection and choice of law clauses in employment contracts as indicated by both the text of § 921(A)(2)
a) Constitutionality of La. R.S. § 23:921
Defendants argue against the likelihood of success on the merits by arguing that, as applied, § 921(A) violates (1) their First Amendment rights to petition the government for redress of grievances, and (2) the dormant Commerce Clause.
First, Defendants argue that as applied, § 921(A)(2) violates their First Amendment rights. According to Defendants, both parties have a First Amendment right, under the Noerr-Pennington doctrine, to “petition the Government for redress of grievances,” including a constitutional right to file a lawsuit “wherever they choose.” Defs.’ Opp’n 8-9, Doc. 9; Defs.’ Suppl. Mem. 4-5, Doc. 33. Defendants assert that while Plaintiffs waived the right to sue anywhere except in Minnesota due to the forum selection clause in the Employment Agreements, Defendants maintаin their right to sue anywhere.
Defendants’ First Amendment objections are insufficient to overcome Plaintiffs’ demonstrated likelihood of success on the merits of invalidating the forum selection and choice of law clauses. The Noerr-Pennington doctrine confers federal antitrust immunity to parties exercising the First Amendment right to petition the government for redress of grievances. City of Columbia v. Omni Outdoor Advert., Inc.,
Defendants’ second constitutional argument — that, as applied, § 921 violates the dormant Commerce Clause, U.S. Const, art. I, § 8, cl. 3 — is also insufficient to overcome Plaintiffs’ demonstrated likelihood of success on the merits of invalidating the forum selection and choice of law clauses. The first step in reviewing state statutes under the dormant Commerce Clause is to determine whether the statute “regulates evenhandedly with only incidental effects on interstate commerce, or discriminates against interstate commerce.” Ford Motor Co. v. Tex. Dep’t of Transp.,
Defendants first argue that although § 921 is not facially discriminatory, it discriminates against out-of-state business “in practical effect.” Defs.’ Opp’n 9-12, Doc. 9; Defs.’ Suppl. Mem. 5-7, Doc. 33. A statute discriminates against interstate commerce when it provides for “differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Ford Motor,
Having concluded that § 921 is nondiscriminatory, the Court must next determine whether § 921 effectuates a legitimate locаl interest, and if so, the statute will upheld “unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Pike,
The second burden, that Louisiana law may apply to govern disputes with a Louisiana employee, is mitigated by two aspects of § 921. First, as previously discussed, § 921(A)(2) does not totally prohibit choice of forum and choice of law clauses — out-of-state employers can enforce these clauses if employees agree to them after the incident giving rise to the dispute. Second, out-of-state employers can secure protection from Louisiana law against unwanted competition by merely complying with § 921(C), which allows out-of-state employers to enfоrce a non-
According to Defendants, Louisiana’s prohibition on the choice of forum clause in Medtronic’s Employee Agreement interferes with Medtronic’s management of its workforce, and in so doing places an improper burden on interstate commerce. Defendants also impliedly contend that § 921 interferes with their ability to sell their FDA-approved products to customers in Louisiana. The Court disagrees. Section 921(A)(2) does not prevent Defendants from managing their workforce — Defendants are free to hire the employees of their choice, open the offices of their choice, ship products into Louisiana, and make sales and profits in Louisiana. Moreover, the statute does not regulate or implicate the FDA approval process, the payment for product with Medicare funds, FDA or Medicare regulations, or the shipping of products made outside of Louisiana into Louisiana. The statute only involves how post-employment activities of Louisiana-based employees’ can be governed.
Accordingly, Plaintiffs have demonstrated а likelihood of success on the merits of this declaratory action invalidating the forum selection and choice of law clauses in their Employment Agreements.
2. Non-Competition Agreement
Plaintiffs argue that the non-competition/non-solicitation clauses are void because (1) the clauses do not “specify” the parishes or municipalities where Plaintiffs are prohibited from competing or soliciting customers, and (2) the clauses seek to prevent Plaintiffs from competing with entities other than their employer.
The Louisiana statute governing non-competition agreements provides: “Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind ... shall be null and void. However, [every agreement] which meets the exceptions as provided in this Section, shall be enforceable.” § 23:921(A)(1) (emphasis added). Thus, non-competition agreements are unenforceable unless they fit within one of the statute’s narrow exceptions. SWAT 24 Shreveport Bossier, Inc. v. Bond,
As to the geographical limitation, there are two independent requirements: (a) the parishes where competition is restrained must be “specified” within the agreement itself; and (b) a substantive limit requiring non-competition agreements to be “limited in enforcement to parishes where the first employer actually carries on a like business therein.” Id. at 1334-35 (internal quotations and citations omitted). Regarding the specificity requirement, “[wjhat is important is that the geographic limitation be express and clearly diseernable.” Vartech Sys., Inc. v. Hayden,
In the Employment Agreements,
Defendants point out that Louisiana courts of appeals have enforced geographic limitations that did not specifically identify the applicable parishes by name because the geographic limitations were “identifiable.” Petrol. Helicopters, Inc. v. Untereker,
B. Remaining Preliminary Injunction Prerequisites
Next, the Court must determine whether Plaintiffs have established that they meet the remaining prerequisites for a preliminary injunction — that Plaintiffs will suffer irreparable injury if the injunction is not granted, that the irreparable injury outweighs the harm to the defendant, and that granting the preliminary injunction will not disserve the public interest. Cardoni,
First, the Court finds that Plaintiffs will suffer irreparable harm if Defendants are allowed to prosecute a suit in any forum that seeks to enforce the non-competition agreement contained in the Employment Agreements. The parties do not dispute that a Minnesota court will apply Minnesota law and therefore likely find that the noncompetition agreements are enforceable under Minnesota law.
Second, the balance of hardships weigh in Plaintiffs’ favor. Plaintiffs assert that the only harm Defendants might suffer is that it will be required to comply with labor laws in a state from which it has benefitted from sales. Pis.’ Supp, Mem. 17-18, Doc. 4-1. The Court agrees with Plaintiffs that such minor harm pales in comparison to the hardship that they and their families would suffer if forced to litigate in and, under the laws of a state in which, they have never worked and denied the protections afforded to Louisiana employees.
Finally, issuing the preliminary injunction will not disserve the public interest. Prohibiting Defendants from proceeding with an action in a different forum will both conserve judicial resources, and uphold Louisiana’s strong public policy against overbroad non-competition agreements. Accordingly, Plaintiffs have satisfied the remaining preliminary injunction prerequisites.
IV. Motion to Transfer Venue Pursuant To § 1404(a)
28 U.S.C. § 1404(a) provides: “For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district court or division where it might have been brought.” Under federal law, forum-selection clauses are presumed enforceable, and the party resisting enforcement bears a heavy burden of proof.
V. Conclusion
For the reasons stated above, Plaintiffs’ Motion for Preliminary Injunction (16-cv-
Plaintiffs shall file a proposed order in conformity herewith, after attaining approval from. Defendants as to form, within 3 days of the date of this ruling.
. The defendants, Medtronic Sofamor Danek USA, Inc. ("MSDU”); Medtronic, Inc.; and Medtronic Sofamor Danek’, Inc., are collectively referred to herein interchangeably as "Medtronic” or "MSDU.”
. In Section 7.3 of the Agreements, Wagues-pack, Powell, and Lindsey agreed that "[a]ny dispute arising out of or related to this Agreement, or any breach or alleged breach hereof, shall be exclusively decided by a state court in the State of Minnesota,” and further agreed to irrevocably waive any rights to have any disputes between them and Medtronic arising out of or related to the Agreement decided in any jurisdiction or venue other than a state court in the State of Minnesota. La. Employment Agreement 9, Doc. 32-2.
In Section 7.3 of the Agreements, Waguеs-pack, Powell, and Lindsey also "irrevocably consented] to the personal jurisdiction of the state courts in the State of Minnesota for the purposes of any action arising out of or related to this Agreement.” Id.
In Section 7.4 of the Agreements, Wagues-pack, Powell, and Lindsey each agreed "not to sue MEDTRONIC in any jurisdiction other than a state court in the State of Minnesota for the purposes of any action arising out of or related to this Agreement,” and further agreed "not to assist, aid, abet, encourage, be a party to, or participate in the commencement or prosecution of any lawsuit or action
. K2M subsequently intervened and joined in Plaintiffs’ declaratory judgment claims.
. The Minnesota Action pending in the District of Minnesota is captioned: Medtronic, Inc., et al. v. Powell, et al., No. 0:16-cv-00918-JNE-TNL.
. Courts in the Fifth Circuit have addressed the first-filed rule in various ways. For example, one court suggested that the first-filed rule is dispositive of all other issues. Marks v. Mackey, No. 6:14-CV-00441,
. Plaintiffs filed the declaratory judgment petition in Louisiana state court on March 28, 2016, eight days before Medtronic filed its suit in Minnesota state court. Although the Minnesota case was removed to federal court prior to removal of the Louisiana case, the relevant benchmark for determining which suit was first filed is the date of filing in state court. E.g., Poche v. Geo-Ram, Inc., No. 96-1437,
. Ft Marine Transporters,
. Defendants have not argued that Minnesota law would otherwise be applicable. Therefore, the Court assumes, for the purposes of this ruling, that Louisiana law would "otherwise be applicable" to this case within the meaning of Article 3540.
. La. R.S. § 23:921(A)(2) provides:
The provisions of every employment contract or agreement, or provisions thereof, by which any foreign or domestic employer or any other person or entity includes a choice of forum clause or choice of law clause in an employee’s contract of employment ... shall be null and void except where the choice of forum clause or choice of law clause is expressly, knowingly, and voluntarily agreed to and ratified by the employee after the occurrence of the incident which is the subject of the civil or administrative action.
. The Louisiana Supreme Court has explained:
Louisiana Revised Statute 23:921(A)(2) is a strong expression of Louisiana public policy concerning forum selection clauses wherein the legislature clearly intended to allow Louisiana courts to adjudicate the claims of plaintiffs who have properly invoked their jurisdiction. Thus, suits validly filed in this state can remain here, despite forum selection clauses to thе contrary unless the clause was expressly, knowingly, and voluntarily entered into and ratified after the occurrence of the incident which gives rise to the. litigation. The legislature has expressed Louisiana’s strong policy with a legitimate concern for providing justice'to those parties who would otherwise be entitled to adjudication in a Louisiana court .... The requirement that forum selection clauses be expressly, knowingly and voluntarily entered into and ratified after the occurrence of injury is a reasonable condition, and is appropriately geared toward Louisiana’s public policy decision to allow its state courts to adjudicate claims brought within'its jurisdiction.
Sawicki v. K/S Stavanger Prince,
. Because the Court concludes that Plaintiffs have demonstrated a likelihood of success as to Plaintiffs’ first argument, the Court need not address the second aspect of invalidity under § 921(C) asserted by Plaintiffs.
. There are two separate Employment Agreements at issue here — Waguespack’s & Powell’s Employment Agreements are entitled "Louisiana Employee Agreement,” while Lindsey’s Employment Agreement is entitled "Employee Agreement." In Lindsey's Employment Agreement, the non-competition clause contains no territory whatsoever, which clearly violates § 921(C). Defendants do not specifically address this deficiency, instead Defendants address Lindsey's Employment Agreement as if it were the same as the other two employees’ agreements. It suffices to say that if Waguespack’s and Powell’s more detailed Employment Agreements are invalid under § 921(C), then Lindsey's less specific Employment Agreement is also invalid under § 921(C). For the sake of efficiency, the Court will simply refer to all three Plaintiffs’ Employment Agreements collectively.
. The Fourth Circuit has stated:
We beg to differ with the reasoning of our learned brothers of the Third Circuit. We find that the clear language of LSA-R.S. 23:921 requires that the agreement specify the parishes, etc., and that the employer must do business in those parishes. If this Court were to adopt the position espoused by the plaintiff, there would have been no reason for the legislature to have included the requirement that the parishes be specified, It would have been sufficient for the legislature to have simply stated that the parties could enter into a non-compete agreement referring to "those parishes in which the employer does business” in general terms only, without naming or listing those parishes. We are required to give effect to the word "specified” where to do so would not lead to absurd consequences.
Ryan,
. The Court assumes, for the purposes of this ruling, that this assertion is correct.
. The Louisiana Supreme Court has described this "strong public policy” as a "state desire to prevent an individual from contractually depriving himself of the ability to support himself and consequently becoming a public burden.” SWAT 24 Shreveport Bossier, Inc. v. Bond,
. Although under the Employment Agreements the Plaintiffs are entitled to compensation from Defendants- for the duration of the non-competition period, the Cоurt finds that such compensation is insufficient to overcome Plaintiffs' likelihood of success on the merits of this case, as well as Louisiana's strong public policy against these type of agreements. Moreover, such compensation does not change the fact that the non-competition clause prevents Plaintiffs from receiving profits above and beyond the baseline severance salary provided by Medtronic,
. Defendants cite the Supreme Court decision in Atlantic Marine for the proposition that the forum selection cláuses in the Employment -Agreements must be given controlling weight. Atl Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, — U.S,-,