June 2018

Boston Scientific Corporation Wins Unanimous Decision in Minnesota Supreme Court Non-Compete Case

United States - Minnesota

Boston Scientific Corporation won a unanimous decision in Minnesota Supreme Court in a case involving alleged breaches of a non-competition agreement. Our firm represented Boston Scientific and one of its employees in the matter.

In the case, plaintiff St. Jude Medical sued one of its former employees and Boston Scientific after the employee left his job at St. Jude to work for Boston Scientific. St. Jude alleged the employee violated a non-competition covenant in his employment agreement with St. Jude. The agreement expressly stated if the employee breached the non-competition provision, St. Jude would suffer irreparable injury, and St. Jude would be entitled to an injunction against the employee and his new employer because St. Jude’s remedy at law for damages would be inadequate. As relief, St. Jude asked that the employee be enjoined from working for Boston Scientific for one year.

Following a jury trial, the Hennepin County District Court concluded that St. Jude was not entitled to an injunction because, although the employee breached the agreement, St. Jude failed to show any harm from the breach. St. Jude pointed to the contract provision stating that any breach would be sufficient to establish harm, but the District Court concluded a contract provision alone was not sufficient to establish the sort of harm needed to grant an injunction.

St. Jude appealed, and the Court of Appeals reversed. It held that the District Court was required to give dispositive weight to the contractual provision authorizing an injunction even if there was no other evidence that the employee’s breach caused St. Jude any harm.

Because that position was nearly unprecedented in the law, Boston Scientific sought review at the Minnesota Supreme Court. After hearing arguments from our firm’s appellate team, the Minnesota Supreme Court ruled in favor of Boston Scientific and its employee. It set a clear rule in Minnesota non-compete law: the district court was not required to exercise its equitable authority simply by reason of the contract language. To state it differently, a contract provision authorizing injunctive relief for a breach of a non-competition covenant, without more, is not enough to secure an injunction. Instead, plaintiffs seeking injunctive relief for breach of a non-competition covenant still must satisfy the traditional equitable factors in Minnesota, including a showing of actual harm from the breach.

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