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Spok, Inc. v. Goel

United States District Court, D. Minnesota

October 24, 2019

Spok, Inc., Plaintiff,
v.
Hemant Goel, Defendant.

          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 plaintiff.

          Faris Rashid, Esq. and Mark L. Johnson, Esq. and Greene Espel PLLP, counsel for defendant.

          ORDER

          David S. Doty, Judge

         This 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.

         BACKGROUND

         This 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.

         In 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parties later executed the Amended and Restated Executive Severance and Change in Control Agreement (Agreement), which superseded the earlier employment agreement.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. 2.

         Among 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).

         On 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.

         DISCUSSION

         In 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 ...


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