United States District Court, D. Minnesota
Maximilian Grant, Esq. and Latham & Watkins LLP, R J
Zayed, Esq. and Dorsey & Whitney LLP, and Michael A.
David, Esq. and Latham & Watkins LLP, counsel for
Rashid, Esq. and Mark L. Johnson, Esq. and Greene Espel PLLP,
counsel for defendant.
S. Doty, Judge
matter is before the court upon defendant Hemant Goel's
motion to dismiss or stay in favor of arbitration. Based on a
review of the file, record, and proceedings herein, and for
the following reasons, the motion to stay is granted.
contract dispute arises from Goel's employment with
plaintiff Spok, Inc. The court will recite only those facts
and allegations relevant to the narrow issue presented.
October 2014, Spok hired Goel as its chief operating officer.
Compl. ¶ 4. At that time, the parties executed an
employment agreement which included a non-competition clause.
Id. Spok ultimately promoted Goel to president.
Id. ¶ 5. The parties later executed the Amended
and Restated Executive Severance and Change in Control
Agreement (Agreement), which superseded the earlier
employment agreement. Id. ¶ 6; id. Ex.
other things, the Agreement prohibits Goel from competing
with Spok for a period of two years following his departure
from Spok. Compl. ¶ 7; id. Ex. 2 § 8. In
Section 9 of the Agreement, Goel acknowledged that violation
of the noncompetition clause “will cause irreparable
damage” to Spok and that Spok “shall be entitled
as a matter of right to an injunction, out of any court of
competent jurisdiction, restraining any violation” of
that clause. Compl. ¶ 8; id. Ex. 2 § 9.
The Agreement also contains an arbitration clause which
provides, in relevant part:
Except as otherwise provided in Section 9 hereof, the parties
agree that any dispute, claim, or controversy based on common
law, equity, or any federal, state, or local statute,
ordinance, or regulation (other than workers'
compensation claims) arising out of or relating in any way to
this Agreement, its termination or any Termination of
Employment, including whether such dispute is
arbitrable, shall be settled by arbitration.
The arbitration proceeding shall be conducted under the
employment dispute resolution arbitration rules of the
American Arbitration Association in effect at the time a
demand for arbitration under the rules is made.
Compl. Ex. 2 § 19 (emphasis added).
April 26, 2019, Goel resigned from Spok and soon thereafter
began working for Capsule Technologies as its chief executive
officer. Compl. ¶ 12. On August 2, 2019, Spok filed this
suit against Goel alleging that he breached the
non-competition clause in the Agreement by working for
Capsule, a competitor. Spok seeks a permanent injunction
enjoining Goel from further breaching the Agreement and
monetary damages. Goel now moves to dismiss or stay the
action in favor of arbitration.
deciding whether to compel arbitration under the Federal
Arbitration Act, the court considers: “(1) whether
there is a valid arbitration agreement and (2) whether the
particular dispute falls within that agreement.”
Faber v. Menard, Inc., 367 F.3d 1048, 1052 (8th Cir.
2004). The threshold question, however, is whether the