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Medtronic Sofamor Danek, Inc. v. Gannon

United States Court of Appeals, Eighth Circuit

January 9, 2019

Medtronic Sofamor Danek, Inc.; Medtronic Sofamor Danek USA, Inc.; Medtronic, Inc. Plaintiffs - Appellees
v.
Patrick B. Gannon Defendant-Appellant

          Submitted: October 16, 2018

          Appeal from United States District Court for the District of Minnesota - Minneapolis

          Before SMITH, Chief Judge, LOKEN and GRUENDER, Circuit Judges.

          GRUENDER, Circuit Judge.

         Patrick Gannon appeals the grant of a motion to remand filed by his former employer, Medtronic Sofamor Danek, Inc., Medtronic Sofamor Danek USA, Inc., and Medtronic, Inc. (collectively, "Medtronic"). The district court[1] held that Gannon waived his right to remove the case to federal court because the employment contract he signed contained an enforceable forum selection clause. We affirm.

         I.

         On March 2, 2015, Gannon signed an Offer Letter, an Employee Agreement, and a Repayment Agreement. He does not dispute that he signed these documents at the same time to form an employment relationship with Medtronic.

         The Offer Letter is a "formal offer of employment at Medtronic." By signing it, Gannon "ACCEPT[ED] THIS OFFER OF EMPLOYMENT" and agreed to the terms set forth in it. The Offer Letter includes basic information about Gannon's employment, including his start date, compensation structure, vacation time, and training. It is also expressly "contingent upon [Gannon] signing the attached Employee Agreement and the Sales Guarantee Repayment Agreement."

         The Employee Agreement deals with things like confidentiality, proprietary inventions, and restrictions on competition. It also includes a forum selection clause. That clause says that disputes "arising out of or related to this Agreement" must be litigated in Minnesota state court and that Gannon "irrevocably consents to the personal jurisdiction of the state courts in the State of Minnesota for the purposes of any action arising out of or related to this Agreement." The Employee Agreement does not address "compensation, benefits, and other financial terms and conditions," which it says are "set forth in separate documents provided to [Gannon]." In a section entitled "Prior Agreements," the Employee Agreement says that nothing in it "affects any term or provision of any MEDTRONIC compensation or benefit plan or any agreements related thereto."

         The one-page Repayment Agreement states that Medtronic and Gannon "wish to enter into an . . . employment relationship." Medtronic agreed to pay Gannon $900, 000 over a three-year "Guarantee Period," but "if [Gannon] voluntarily terminates from Medtronic during the Guarantee Period or within one year after the end of the Guarantee Period, [he] must pay back to Medtronic the difference between" his earned commissions and payments received. The Offer Letter also describes the Guarantee Period and summarizes the condition of repayment should Gannon terminate his employment during this period. The Repayment Agreement does not include a forum selection clause.

         In late 2016, Gannon left Medtronic. Medtronic sued him in Minnesota state court, alleging that he left during the Guarantee Period and failed to repay Medtronic pursuant to the Repayment Agreement. Gannon removed the action to federal court under 28 U.S.C. § 1332(a)(1), and Medtronic moved to remand pursuant to the forum selection clause in the Employee Agreement. The district court granted Medtronic's motion, holding that the forum selection clause in the Employee Agreement applied to actions arising from the Repayment Agreement because, under Minnesota law, both agreements were different parts of the same contract. It also determined that Medtronic's suit was "related to" the Employee Agreement and therefore subject to its forum selection clause. Gannon appeals.

         II.

         We review a district court's grant of a motion to remand de novo. See Faltermeier v. FCA U.S. LLC, 899 F.3d 617, 620 (8th Cir. 2018). "Under 28 U.S.C. § 1446, a defendant may remove a case filed in state court to federal court based on diversity jurisdiction." PR Group, LLC v. Windmill Intern., Ltd., 792 F.3d 1025, 1026 (8th Cir. 2015). This right to remove may be waived by agreement. Id. "Such waiver must be clear and unequivocal." Id.

         The parties do not dispute that Minnesota law applies to the interpretation of the Employee Agreement, Repayment Agreement, and Offer Letter. They also do not dispute that the forum selection clause in the Employee Agreement is clear and unequivocal. But they disagree about whether the forum selection clause applies to the present dispute, which arises from the Repayment Agreement. Gannon argues that the forum selection clause does not apply to the Repayment Agreement because it is a separate contract from the Employee Agreement. But even if they are parts of ...


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