Safety Center, Inc. v. Stier

903 N.W.2d 896
CourtCourt of Appeals of Minnesota
DecidedNovember 6, 2017
DocketA17-0360
StatusPublished
Cited by2 cases

This text of 903 N.W.2d 896 (Safety Center, Inc. v. Stier) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Safety Center, Inc. v. Stier, 903 N.W.2d 896 (Mich. Ct. App. 2017).

Opinion

OPINION

RODENBERG, Judge

Appellant Safety Center, Inc., sued respondents for respondent Joan Stier’s breach of a noncompete agreement, among other related claims. The noncompete agreement, by its terms and if enforceable, purported to limit Stier’s ability to “provide services to [appellant’s] clients in any competitive capacity for a period of one year commencing from the termination of employment,” together with other related one-year limitations on her work activity.

The parties stipulated to a bifurcated trial to isolate and resolve the issue of whether the noncompete agreement is enforceable. The district court found as a fact that the noncompete agreement is not ancillary to the employment agreement between the parties and is not supported by independent consideration. It concluded that the noncompete agreement is invalid and unenforceable. Appellant argues that the district court erred by finding that there had been an offer and acceptance of an employment agreement before thé non-compete agreement was presented to Stier. Because the district court did not clearly err by inferring that there was an offer and acceptance, unaccompanied by any reference to a noncompete agreement, and because the district court did not abuse its discretion by concluding the noncompete agreement was not ancillary to the employment agreement, we affirm.

FACTS

This case concerns the enforceability of a Non-Disclosure/Confidentiality and Non-Compete Agreement (the noncompete agreement) signed by appellant’s former employee, Stier. Appellant is a treatment center for special-needs sex offenders, owned by Executive Director Dean. Dev-ries. Stier applied for work with appellant on May 19, 2003, and interviewed that day with Devries for a part-time therapist position. Neither Stier nor Devries could confirm in their trial testimony whether Stier was offered a job that day or whether they discussed the noncompete agreement during the interview. The next day, Devries mailed Stier a letter (the May 20 letter). The first line of the letter identified its purpose “to confirm [Stier’s] acceptance of the position [appellant] offered [her].” The May 20 letter asked Stier to attend a training presentation and offered to “pay [her] for the time.” It also, laid out the terms of employment, indicating Stier’s hourly wage, her at-will status, and that her first day of work would be on May 27, 2003. The May 20 letter made no mention of a noncompete agreement.

Stier arrived to work on May 27 as directed by the May .20 letter. That day, she filled out new-hire paperwork. She was also presented with a noncompete agree? ment. Stier signed it. Stier remained employed .by appellant for many years and eventually became program director. In late 2014, Stier established another treatment program for special-needs séx offenders and incorporated respondent All New Directions. She resigned from appellant’s employ in early 2015. .Appellant sued respondents claiming, among other things, that Stier’s actions violated the noncom-pete agreement.

The parties isolated the issue of whether the noncompete agreement between Stier and appellant is enforceable by bifurcating the trial. The district court determined after trial on the issue so isolated that the noncompete agreement is not ancillary to the initial employment agreement, based on its finding that appellant and Stier had entered into an employment agreement before Stier was informed of or presented with the noncompete agreement. The district court also found that no independent consideration supports Stier’s execution of the noncompete agreement, and concluded that the agreement is not enforceable. Appellant moved for po.sttrial relief, seeking amended findings. The district .court denied the motion. This appeal followed.

ISSUES

I. Must a noncompete agreement be ancillary to an employment agreement or accompanied by independent consideration to be enforceable?

II. Did the district court clearly err in finding that an employment agreement was formed before Stier was informed of or presented with the noncompete agreement?

ANALYSIS

I. A noncompete agreement must be ancillary to an employment agreement or accompanied by independent consideration to be enforceable.

The Minnesota Supreme Court has reasoned that noncompete agreements are to be “disfavored” by the courts .because they restrain trade. Nat’l Recruiters, Inc. v. Cashman, 323 N.W.2d 736, 740 (Minn. 1982). Noncompete agreements may .be permitted if they are “bargained for” by the parties and if there exists independent consideration beyond the 'employment opportunity provided to the employee. Id. But, when an employer and employee enter into a noncompete agreement “at the inception of the employment relationship,” independent consideration, is not required for a noncompete agreement to be enforceable. Overholt Crop. Ins. Serv. Co. v. Bredeson, 437 N.W.2d 698, 702 (Minn. App. 1989). This rule takes into account the disparity in bargaining power between employers and employees. Nat’l Recruiters, 323 N.W.2d at 741. Without this rule, employers might ,take “undue advantage” of this disparity by presenting a prospective employee with a noncompete agreement only after she has accepted employment. Id, .

Where a noncompete agreement is not ancillary to an employment agreement, independent consideration must be. provided to the employee to render the agreement valid and enforceable.

II. The record supports the district court’s finding that the employment agreement between appellant and Stier was made before Stier was informed of or presented with the noncompete agreement.

Appellant’s primary argument on appeal is that the district court erred in finding that appellant and Stier had formed an employment agreement before Stier was given notice of and presented with the noncompete agreement. Appellant also argues that the district court incorrectly used this finding to conclude that the noncompete agreement was not ancillary to Stier’s employment.

We review the district court’s factual findings for clear error, examining the record for “reasonable evidence” that would “support the court’s findings.” Rasmussen v. Two Harbors Fish Co., 832 N.W.2d 790, 797 (Minn. 2013) (quotations omitted). “And when determining whether a finding of fact is clearly erroneous, we view the evidence in the light most favorable to. .the verdict. To conclude that findings of fact are clearly erroneous we must, be left with the definite and firm conviction that a mistake has been made.” Id. (quotations and citations omitted). “When reviewing mixed questions of law and fact, we correct erroneous applications of law, but accord, the district court discretion in its ultimate conclusions and review such conclusions under an abuse of discretion standard.”' In re Estate of Sullivan, 868 N.W.2d 750, 754 (Minn. App. 2015) (quotation omitted).

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
903 N.W.2d 896, Counsel Stack Legal Research, https://law.counselstack.com/opinion/safety-center-inc-v-stier-minnctapp-2017.