Cardiovascular Systems, Inc. v. Money

980 F. Supp. 2d 1102, 36 I.E.R. Cas. (BNA) 1868, 2013 WL 5425993, 2013 U.S. Dist. LEXIS 138816
CourtDistrict Court, D. Minnesota
DecidedSeptember 27, 2013
DocketCase No. 12-CV-2673 (PJS/FLN)
StatusPublished

This text of 980 F. Supp. 2d 1102 (Cardiovascular Systems, Inc. v. Money) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cardiovascular Systems, Inc. v. Money, 980 F. Supp. 2d 1102, 36 I.E.R. Cas. (BNA) 1868, 2013 WL 5425993, 2013 U.S. Dist. LEXIS 138816 (mnd 2013).

Opinion

ORDER

PATRICK J. SCHILTZ, District Judge.

Plaintiff Cardiovascular Systems, Inc. (“CSI”) brings this action for breach of contract against a former employee, Jason Money, alleging that Money violated a non-solicitation provision in his employment agreement. This matter is before the Court on Money’s motion for summary judgment. The motion is granted for the reasons explained below.

I. BACKGROUND

CSI is a Minnesota corporation that designs, manufactures, and sells orbital atherectomy products. In 2008, CSI employed Money as a district sales manager under a written employment agreement. Money Dep. 8-10. In 2010, Money signed an amendment to his employment agreement that included the following non-solicitation clause:

Employee agrees that at all times while employed by Cardiovascular Systems, Inc. [and] for one (1) year thereafter, Employee will not solicit, cause to be solicited, or participate in or promote the solicitation of any person to terminate that person’s employment with Cardiovascular Systems, Inc. or to breach that person’s employment agreement with Cardiovascular Systems, Inc.

Steffenson Aff. Ex. F ¶ 13.2.

Money’s employment with CSI ended in December 2011. Money Dep. 25. In February 2012, Money became an independent sales representative for Natural Molecular Testing Corporation (“Natural Molecular”), a provider of genetic-testing kits. Money Dep. 52. Natural Molecular is not a competitor of CSI. Flaherty Dep. 34; Gilbert Dep. 28.

CSI alleges that, after Money left CSI, Money solicited two CSI employees to sell Natural Molecular testing kits (while remaining employed by CSI). Neither of the employees agreed to sell the kits. But, CSI argues, if either of the employees had agreed to sell the kits, they would have violated ¶ 7 of CSI’s standard employment agreement and ¶ 3.5 of CSI’s Code of Ethics and Business Conduct (“Code of Ethics”). Therefore, CSI contends, Money violated the non-solicitation clause in his contract by soliciting these [1104]*1104two CSI employees to breach their own employment agreements with CSI.

Money moves for summary judgment on CSI’s claim. Money contends that, even if he did solicit CSI employees to sell genetic-testing kits (which he denies), such solicitation did not breach the non-solicitation clause in his contract because neither ¶ 7 of CSI’s standard employment agreement nor ¶ 3.5 of CSI’s Code of Ethics prohibit CSI employees from selling non-CSI products to CSI customers.

II. ANALYSIS

A. Standard of Review

Summary judgment is warranted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute over a fact is “material” only if its resolution might affect the outcome of the lawsuit under the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute over a fact is “genuine” only if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. “The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in [its] favor.” Id. at 255, 106 S.Ct. 2505.

B. CSI’s Breach^-of-Contract Claim,

Restrictive covenants—such as the non-solicitation provision and the restrictions on CSI employees’ outside activities—are “strictly construed” in Minnesota and “should not be extended beyond their true intent.” Snyder’s Drug Stores, Inc. v. Sheehy Props., Inc., 266 N.W.2d 882, 885 (Minn.1978) (per curiam). Any ambiguity in a restrictive covenant or any other contractual provision must be construed against the drafting party “ ‘in the absence of a clear showing that a contrary meaning was intended by the parties at the time of its execution.’ ” Ecolab, Inc. v. Gartland, 537 N.W.2d 291, 295 (Minn.Ct.App.1995) (quoting Wick v. Murphy, 237 Minn. 447, 54 N.W.2d 805, 809 (1952)).

As explained above, the question of whether Money violated the non-solicitation clause in his contract turns on whether an employee of CSI is altogether prohibited from selling non-CSI products to CSI customers by either ¶ 7 of CSI’s standard employment agreement or ¶ 3.5 of CSI’s Code of Ethics. Paragraph 7 of CSI’s standard employment agreement provides in relevant part:

Best Ejforts/Undertakings of Employee. During Employee’s employment with the Corporation, Employee shall serve the Corporation faithfully and to the best of his/her ability and shall devote his/her full business and professional time, energy, and diligence to the performance of the duties assigned to him/ her.... During Employee’s employment with the Corporation, Employee shall not engage in any other business activity that would conflict or interfere with his/ her ability to perform his/her duties under this Agreement (to include not providing any services to any individual, company or other business entity that is a competitor, supplier, or customer of the Corporation, except in connection with Employee’s employment with the Corporation). Furthermore, Employee agrees to be subject to the Corporation’s control, rules, regulations, policies and programs.

Steffenson Aff. Exs. G, H ¶ 7. Paragraph ¶ 3.5 of CSI’s Code of Ethics provides in relevant part that “[e]ach Representative must avoid any situation in which his or her personal interests conflict with or interfere with CSI’s interests.” Steffenson Aff. Ex. I ¶ 3.5. The Code of Ethics also provides, however, that “CSI Representa[1105]*1105tives are generally free to engage in outside activities of their choice.” Id.

CSI contends that these provisions unambiguously prohibit CSI employees from selling non-CSI products to CSI customers at any time. The Court disagrees. These provisions are, at best, ambiguous.

CSI’s standard employment agreement requires employees to devote their “business and professional time”—not their personal time—to CSI. The Code of Ethics clarifies that salespeople are “generally free to engage in outside activities of their choice.” Together, these provisions clearly communicate that employees of CSI are free to engage in outside activities on their own time—including money-making activities, such as selling non-CSI products—so long as those activities do not create any conflict with CSI’s interests. Even CSI’s chief administrative officer focused on the distinction between business and personal time, testifying that the standard employment agreement “doesn’t prohibit [CSI employees] from engaging in other activities but it does require that the employees dedicate their full efforts to CSI during the normal course of business.” Flaherty Dep. 25 (emphasis added). Given this emphasis on the timing—rather than the na

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Ecolab, Inc. v. Gartland
537 N.W.2d 291 (Court of Appeals of Minnesota, 1995)
Snyder's Drug Stores, Inc. v. Sheehy Properties, Inc.
266 N.W.2d 882 (Supreme Court of Minnesota, 1978)
Wick v. Murphy
54 N.W.2d 805 (Supreme Court of Minnesota, 1952)

Cite This Page — Counsel Stack

Bluebook (online)
980 F. Supp. 2d 1102, 36 I.E.R. Cas. (BNA) 1868, 2013 WL 5425993, 2013 U.S. Dist. LEXIS 138816, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cardiovascular-systems-inc-v-money-mnd-2013.