Andersen Windows, Inc. v. Garfield

Filing 19

ORDER: Andersen Windows' Motion for a Temporary or Preliminary Injunction [Docket No. 5 ] is DENIED. The hearing on April 11, 2017, at 11 a.m. is CANCELLED. (Written Opinion) Signed by Judge Joan N. Ericksen on April 5, 2017. (CBC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Andersen Windows, Inc.,
Plaintiff,
v.

Case No. 17-cv-826 (JNE/KMM)
ORDER

John W. Garfield,
Defendant.
Andersen Windows, Inc., brought this action against its former employee, John W.
Garfield, and filed a Motion for a Temporary or Preliminary Injunction. Andersen
Windows claimed that Garfield is violating restrictive covenants in his employment
agreement. In its complaint, Andersen Windows alleged that “Garfield agreed to
arbitrate all claims arising from his employment at Andersen,” that “Andersen is still
permitted under the Employment Agreement to bring a lawsuit in order to obtain
preliminary or temporary injunctive relief” notwithstanding the arbitration agreement,
that “Andersen is filing a demand for arbitration,” and that “Andersen now seeks a
preliminary injunction and temporary restraining order to prevent irreparable harm
caused by Garfield’s on-going breach of the Employment Agreement while the
arbitration is pending.” The employment agreement states that the agreement to arbitrate
is governed by the Federal Arbitration Act.
“In a case involving the Federal Arbitration Act (FAA), courts should not grant
injunctive relief unless there is ‘qualifying contractual language’ which permits it.”
Manion v. Nagin, 255 F.3d 535, 538-39 (8th Cir. 2001). “Qualifying contractual

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language is ‘language which provides the court with clear grounds to grant relief without
addressing the merits of the underlying arbitrable dispute.’” Id. at 539 (quoting Peabody
Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46, 47 n.3 (8th Cir. 1994)); see Merrill
Lynch, Pierce, Fenner & Smith, Inc. v. Hovey, 726 F.2d 1286, 1292 (8th Cir. 1984).
After Andersen Windows filed its motion, the Court ordered Andersen Windows
to file a memorandum of law that addresses whether the Court may grant the requested
injunctive relief in light of Manion, Peabody Coalsales, and Hovey. Andersen Windows
complied, asserting that the employment agreement contains qualifying contractual
language “that permits the Court to enter injunctive relief based upon the contract itself
and not on the merits of any defenses raised by Garfield.”
Garfield opposed Andersen Windows’ motion. He argued that the motion “should
be denied because its outcome depends on the merits of a breach of contract claim that is
only asserted in arbitration and may only be determined by the arbitrator.” He also
asserted that the Court lacks subject-matter jurisdiction because the amount in
controversy does not exceed $75,000, that Andersen Windows did not assert a claim on
which injunctive relief can be granted, that Andersen Windows is not likely to succeed on
the merits of its claim for breach of contract in arbitration, that Andersen Windows
cannot demonstrate a threat of irreparable harm, and that the balance of harms favors
denial of an injunction.
In its reply, Andersen Windows maintained that the employment agreement
contains qualifying contractual language. It also argued that subject-matter jurisdiction

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exists, that it asserted a claim for breach of contract, and that it is entitled to an
injunction.
A summary of certain provisions of the employment agreement follows.
Paragraph 2 states, “I will never, during or after my employment, use or disclose
Confidential Information, unless authorized by the Company in writing or compelled by
law (such as by a court order or valid subpoena).” Paragraph 3 contains promises not to
compete:
3. Promises Not to Compete. During my employment and for
twelve months after the termination of my employment (whatever the cause
or reason), I will not, within the Territory, do any of the following:
a.
Work for or Support a Competing Business or a Covered
Customer or Vendor;
b.
Sell any Competing Product or Service;
c.
Induce or encourage a Covered Customer or Vendor to
reduce, cancel or discontinue its business with the Company,
or in any other manner modify or change its existing or
potential business relationship with the Company; or,
d.
Recruit Company Personnel.
Paragraph 5 states that “[t]he Company and I mutually agree all Claims (unless
specifically excluded below) will be decided only by an arbitrator through arbitration and
not by a judge or jury”; that the agreement to arbitrate “is governed by the Federal
Arbitration Act”; that the agreement to arbitrate “applies to any Claim that the Company
may have against me or that I may have against the Company”; that “the arbitrator, and
not any federal, state or local court or agency, will have the exclusive authority to resolve
any question or dispute relating to the interpretation, applicability, enforceability or
formation of this Employment Agreement and this Agreement to Arbitrate.” Paragraph 5
also provides that “[e]ither the Company or I may apply to a court of competent

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jurisdiction for temporary or preliminary injunctive relief in connection with a Claim that
is subject to arbitration; provided, however, that all determinations of final relief will be
decided in arbitration.” Paragraph 16 states that “[t]he terms of this Employment
Agreement will remain in force during my employment and after my employment ends,
regardless of the reason, for the time periods, if any, governing those terms.”
The employment agreement does not contain qualifying contractual language.
Nothing in the employment agreement provides the Court with clear grounds to grant the
requested relief without addressing the merits of the underlying arbitrable dispute. That
Andersen Windows may apply to the Court for temporary or preliminary injunctive relief
does not entitle Andersen Windows to injunctive relief. See Manion, 255 F.3d at 539 (“It
is true that the Agreement contemplates the possibility of interim judicial relief in the
event of a dispute between the parties. It does not provide that a party is automatically
entitled to injunctive relief, however, but only that a party may request such relief.”).
That some of the employment agreement’s provisions remain in force after termination of
employment provides no basis to avoid addressing the merits of the underlying arbitrable
dispute. See Peabody Coalsales, 36 F.3d at 48 & n.5 (“[T]he bargained-for terms of the
Agreement require continued performance as part of the dispute resolution process.
Thus, an order compelling arbitration ‘in accordance with the terms of the agreement’
must necessarily include an order requiring continued performance.”). The Court cannot
grant the requested relief without addressing the merits of the underlying arbitrable
dispute. See Manion, 255 F.3d at 539 (“Another provision in the Agreement states that a
party is entitled to injunctive relief ‘in case of any breach,’ but in order to issue such
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relief the district court would have been required to determine that a breach had occurred
and to have made a determination on the merits of the underlying dispute, an issue for the
arbitrator.”); Peabody Coalsales, 36 F.3d at 48 (“Where . . . the contract clearly requires
continued performance during the arbitration process, the judicial inquiry is limited and
arbitration under the contract terms will not be delayed. The court need only read the
contract and order arbitration according to its provisions.”).
Andersen Windows’ Motion for a Temporary or Preliminary Injunction is denied.
The hearing on April 11, 2017, at 11 a.m. is cancelled.
Based on the files, records, and proceedings herein, and for the reasons stated
above, IT IS ORDERED THAT:
1.

Andersen Windows’ Motion for a Temporary or Preliminary Injunction
[Docket No. 5] is DENIED.

2.

The hearing on April 11, 2017, at 11 a.m. is CANCELLED.

Dated: April 5, 2017
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge

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