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Safety Center, Inc. v. Stier

Court of Appeals of Minnesota

November 6, 2017

Safety Center, Inc., Appellant,
v.
Joan Marie Stier, et al., Respondents.

         Olmsted County District Court File No. 55-CV-15-5304

          James T. Smith, Craig D. Greenberg, Huffman, Usem, Crawford & Greenberg, P.A., Minneapolis, Minnesota (for appellant)

          Mark W. Delehanty, Klampe, Delehanty & Pasternak, LLC, Rochester, Minnesota (for respondents)

          Considered and decided by Connolly, Presiding Judge; Ross, Judge; and Rodenberg, Judge.

         SYLLABUS

         1. A noncompete agreement unsupported by independent consideration is not enforceable where the record supports the district court's factual finding that the noncompete agreement was not ancillary to the employment agreement.

         2. A district court does not clearly err when it finds the existence of a contract for employment by inference from an employer's letter to an employee confirming the offer and acceptance of employment, despite neither party having a present recollection of the details of the offer and acceptance.

          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 the noncompete 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 Devries. 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 agreement. 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 sex 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 noncompete 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 ...


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