St. Jude Medical, Inc., Appellant,
Heath Carter, et al., Respondents.
County District Court File No. 27-CV-15-21203
F. Fox, Kevin P. Hickey, Mark R. Bradford, Laurel J. Pugh,
Bassford Remele, P.A., Minneapolis, Minnesota (for appellant)
L. Schnell, Jr., Martin S. Chester, Blake J. Lindevig, Faegre
Baker Daniels LLP, Minneapolis, Minnesota (for respondent)
Considered and decided by Bjorkman, Presiding Judge; Hooten,
Judge; and Reyes, Judge.
noncompete clause in an employment contract provides that
irreparable harm occurs upon an employee's breach and
specifies remedies for the breach, the district court, upon a
finding of breach by the employee, must enforce the contract
against the employee by awarding injunctive relief or other
appropriate relief as provided for under the contract.
former employer challenges the district court's order
dismissing its amended complaint, arguing that the district
court erred by failing to award a remedy, specifically
injunctive relief, after a jury and the district court found
that appellant's former employee breached the noncompete
provision of his employment contract. Appellant also contends
that the district court erred by determining that appellant
had abandoned or waived its claim for attorney fees against
its former employee. We reverse and remand the case for
further proceedings consistent with this opinion.
St. Jude Medical, Inc. (St. Jude), is a Minnesota corporation
that engages in the research, development, marketing, and
sale of medical devices, including electrophysiology (EP)
products. EP products are used to evaluate heart rhythm
disorders and treat diseases such as atrial fibrillation,
atrial flutter, and ventricular tachycardia. These products
are generally separated into two categories: EP capital
products and EP disposable products. EP capital products
include circuitry and software-based devices that interpret,
digitize, and display electrical information collected from
the heart. EP disposable products are accessory items that
collect and measure electronic information produced by the
heart and transmit such information to an EP capital product.
2007, St. Jude hired respondent Heath Carter, who signed an
at-will employment contract. The employment contract
contained two standard restrictive covenants: a noncompete
clause and a confidentiality clause. The noncompete provision
limited Carter's ability to work for any of St.
Jude's competitors for one year after his employment at
St. Jude ended. The provision stated:
In the event of Employee's termination of employment for
any reason, whether voluntary or involuntary, Employee,
either personally or through an agent, servant, employee,
partner, representative, affiliate or other entity, shall not
for a period of one (1) year following termination, without
the prior written consent of [St. Jude], directly or
indirectly, seek or accept employment with or render services
to any other person or entity that competes in any sense with
[St. Jude] in connection with the design, development,
manufacture, marketing or sale of any product, process or
service that is being designed, developed, manufactured,
marketed or sold by [St. Jude] and in which the Employee
participated in the design, development, manufacture,
marketing or sale during Employee's employment with [St.
. . . The preceding paragraph further specifically prohibits
Employee from rendering services to any company where
rendering such services would be expected to require or
involve Employee's using or disclosing confidential
information belonging to [St. Jude].
confidentiality provision prohibited Carter from disclosing
any of St. Jude's confidential information, including but
not limited to information relating to the research,
development, and pricing of St. Jude's products. The
employment contract also contained a remedies provision,
In the event Employee breaches the covenants contained in
this Agreement, Employee recognizes that irreparable injury
will result to [St. Jude], that [St. Jude's] remedy at
law for damages will be inadequate, and that [St. Jude] shall
be entitled to an injunction to restrain the continuing
breach by Employee, the Employee's partners, agents,
servants or employees, or any other persons or entities
acting for or with the Employee. [St. Jude] shall further be
entitled to damages, reasonable attorney's fees, and all
other costs and expenses incurred in connection with the
enforcement of this Agreement, in addition to any other
rights and remedies which [St. Jude] may have at law or in
his eight-year tenure at St. Jude, Carter held a variety of
different positions. After spending several years performing
preclinical research and product development testing on EP
products, Carter assisted in redesigning St. Jude's
website and was responsible for marketing St. Jude's EP
capital products. Toward the end of his tenure, Carter also
participated in research regarding one of St. Jude's EP
2014, an employee at respondent Boston Scientific
Corporation, who was Carter's former supervisor at St.
Jude, contacted Carter regarding possible employment in a
non-EP related position at Boston Scientific. St. Jude and
Boston Scientific are direct competitors in the research,
development, manufacture, marketing, and sale of EP products.
Carter did not accept the position.
2015, the former supervisor again contacted Carter, this time
regarding an opening on Boston Scientific's marketing
team for EP disposable products. On August 21, 2015, Carter
voluntarily resigned from his position at St. Jude. He
subsequently began employment at Boston Scientific, working
as a senior product manager with the primary duty of
overseeing the marketing of EP disposable products.
Jude learned the details of Carter's employment at Boston
Scientific in October 2015 and asked Boston Scientific to
provide assurances that his employment would not involve EP
products during his one-year noncompete period and that he
had not disclosed any of St. Jude's confidential
information. Boston Scientific responded that Carter's
position at Boston Scientific did not violate his noncompete
obligations to St. Jude, claiming he worked with EP capital
products at St. Jude, whereas at Boston Scientific his focus
was on EP disposable products.
December 2015, St. Jude filed suit against Carter and Boston
Scientific (collectively respondents), alleging that Carter
breached his employment contract with St. Jude and that
Boston Scientific tortiously interfered with Carter's
employment contract. St. Jude claimed that as a result of
Carter's breach, it was entitled to injunctive relief and
monetary damages, as well as attorney fees and costs against
Carter, and damages for Boston Scientific's tortious
Jude immediately sought a temporary injunction to prohibit
Carter from continuing his employment with Boston Scientific.
The district court denied this request, determining that St.
Jude failed to demonstrate a reasonable likelihood of success
on the merits and that, in considering the balance of harm to
the parties, temporary injunctive relief was not justified.
engaging in extensive discovery, the parties filed
cross-motions for summary judgment. St. Jude specifically
requested summary judgment on its breach of contract and
tortious interference claims, seeking injunctive relief and
attorney fees. The district court denied the parties'
summary judgment motions and the case proceeded to jury
trial. The parties stipulated before trial that the district
court would address any issue ...