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Andersen Windows, Inc. v. Barbaro

United States District Court, D. Minnesota

March 28, 2019

ANDERSEN WINDOWS, INC., Plaintiff,
v.
MARK BARBARO, Defendant.

          ORDER ON PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

          Nancy E. Brasel United States District Judge

         Andersen Windows, Inc. and Mark Barbaro, its former employee, entered into an employment agreement that is subject to arbitration. Under the non-competition and nondisclosure provisions of the contract, Andersen now seeks to stop Barbaro from his new employment at Lowe's, and brings this motion for a pre-arbitration injunction. An injunction pending arbitration is appropriate only if the agreement contains “qualifying contractual language” allowing the Court to grant the relief without considering the merits of the dispute. Because the Court determines the contract at issue does not contain the necessary qualifying language and because the Court would necessarily delve into the merits of the dispute to grant the relief Andersen seeks, the Court will deny the motion.

         BACKGROUND

         Andersen is a product sales and service organization with its principal place of business in Minnesota. [ECF No. 8 (“Mog Decl.”) at ¶ 6.] Until recently, Barbaro was an executive business manager at Andersen. (Id., ¶ 10.) Barbaro began selling windows and doors to Home Depot while in college, on behalf of a business acquired by Ply Gem, a North Carolina-based building product supplier. [ECF No. 14 (“Barbaro Decl.”) at ¶ 2.] ¶ 1995, Barbaro began working for Silver Line Building Products, continuing to sell windows and doors to Home Depot. (Id., ¶ 3.) In 2006, after Andersen acquired Silver Line, Barbaro worked for Andersen in the Silver Line division, still selling windows and doors to Home Depot. (Id., ¶¶ 4-5.)

         In 2011, Home Depot asked Andersen if Barbaro could be its primary contact and Barbaro was promoted to Director of Business Development for Andersen's Home Depot business. (Id., ¶ 6; Mog Decl., ¶ 10, Ex. B.) Barbaro approximates that he spent eighty percent of his working time on matters related to vinyl windows and doors manufactured by Silver Line and twenty percent of his time on matters related to Andersen wood windows and doors. (Barbaro Decl., ¶ 7.)

         In June 2018, Barbaro's supervisor informed him that the Silver Line division of Andersen was to be sold, and asked for Barbaro's assistance. (Id., ¶ 9.) Barbaro's supervisor asked him to keep the information confidential, including from Barbaro's wife, who worked in the Silver Line division. (Id.) Barbaro asserts that he did so. (Id., ¶ 10.) In August 2018, Andersen announced the sale of its Silver Line division to Ply Gem, where Barbaro had worked after college. Barbaro's wife moved to Ply Gem, and Barbaro hoped to move as well. (Id., ¶¶ 12-13.) Andersen instead asked him to stay, though Barbaro was concerned that his responsibilities would be diminished given that most of his job related to Silver Line, the division that had just been sold. (Id., ¶¶ 13-14.) Barbaro stayed at Andersen, and in December 2018, his supervisor asked him to sign an Employment Agreement, which included a pay increase.

         In addition to the pay increase, the agreement includes covenants to protect confidential information and covenants not to compete. (Mog Decl., Ex. C. (“Agreement”), ¶¶ 2-3.) In the non-compete, Barbaro agreed that during his employment and for a two year “restricted period” after termination of employment, he would not:

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 [Andersen], or in any other manner modify or change its existing or potential business relationship with the [Andersen]; or

         d. Recruit company personnel.

(Agreement, ¶ 3.)

         As for the nondisclosure portion of the Agreement, Andersen asserts that Barbaro was provided access to Andersen's confidential and proprietary product performance information, features, and designs, and both Andersen's and Home Depot's specific confidential and proprietary information regarding business development, marketing, promotional, sales, pricing, and distribution strategies and information, including Andersen's discount and sales profit margin structure. (Mog Decl., ¶ 14.) Through his business development responsibilities, Barbaro became familiar with Andersen's products, marketing strategies, pricing structure, discount strategies, service commitment, relationships, key customer contacts, and opportunities. (Id., ¶ 15.) The nondisclosure paragraph states that Barbaro “will never, during or after [his] 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).” (Agreement, ¶ 2.)

         The Agreement also includes an arbitration provision, under which the parties agree that claims between them (unless excepted by the Agreement) “will be decided only by an arbitrator through arbitration and not by a judge or jury.” (Agreement, ¶ 5(a).) The parties agree that the claims here fall within the arbitration clause, and Andersen has filed a demand for arbitration.

         Most relevant to this motion, however, are Paragraphs 5(d) and 5(e) of the Agreement, which states as follows:

(d) In the event that I fail to comply fully with any of the terms, provisions or conditions of this Employment Agreement, including [the non-compete provision], [Andersen] shall be entitled to equitable relief against me by way of injunction with or without first filing an arbitration. During any lawsuit to obtain equitable relief and/or during any arbitration, [Andersen] and I shall continue to perform our respective obligations under this Employment Agreement in full, including my obligations under [the non- compete provision]. I consent to a Minnesota court's personal jurisdiction and waive any objections regarding a Minnesota court's jurisdiction.
(e) In any proceeding by [Andersen] for equitable relief, I specifically waive any requirement that [Andersen] prove that any threatened or actual breach, violation or failure to comply fully with the terms, provisions or conditions of this Employment Agreement will cause irreparable injury. I agree that [Andersen] has no adequate remedy at law for a threatened or actual breach of [the non-compete provision]. I agree not to raise as a defense in any such proceeding any allegation that any of the provisions of [the non-compete] are unnecessary, unreasonable or unenforceable; that any of them illegally restrain trade or competition; that any of them violate any of my rights; or that I did not receive adequate consideration for this Employment Agreement…. [Andersen] and I expressly intend … that a court will issue an injunction enforcing [the non-compete provision] ...

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