Medtronic Sofamor Danek, Inc. v. Patrick B. Gannon

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 court1 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.”

1The Honorable Susan Richard Nelson, United States District Judge for the

District of Minnesota.

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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 US 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

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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

the same contract, he claims that language in the Employee Agreement precludes

application of its forum selection clause to the Repayment Agreement.

A.

As an initial matter, Gannon asserts that a party may waive its right to remove

an action for breach of contract only if the contract from which the action arose

contains a clear and unequivocal forum selection clause. See, e.g., City of New

Orleans v. Municipal Admin. Servs., 376 F.3d 501, 504 (5th Cir. 2004); Brister v.

Romanowski, No. 14-2921, 2015 WL 2090236, at *2 (E.D. La. Apr. 30, 2015).

Maintaining that the Employee Agreement and Repayment Agreement are separate

contracts, Gannon concludes that he did not waive his right to remove because this

action arose from the Repayment Agreement, a contract that does not contain a forum

selection clause.

But the Employment Agreement and Repayment Agreement are not separate

contracts. Under Minnesota law, “instruments executed at the same time, for the

same purpose, and in the course of the same transaction are, in the eyes of the law,

one instrument and will be read and construed together unless the parties stipulate

otherwise.” Marso v. Mankato Clinic, Ltd., 153 N.W.2d 281, 288-89 (Minn. 1967).

“Whether separate documents executed simultaneously should be treated as a single

contract is governed by the intent of the parties manifested at the time of contracting

and viewed in light of the surrounding circumstances.” Farrell v. Johnson, 442

N.W.2d 805, 807 (Minn. Ct. App. 1989).

The Employee Agreement, Repayment Agreement, and Offer Letter were

executed simultaneously, and the circumstances surrounding their execution indicate

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that they should be treated as a single contract. The Offer Letter constitutes a “formal

offer of employment” and is contingent upon Gannon’s execution of the Employee

Agreement and Repayment Agreement, strong indications that all three documents

are part of the same transaction and were executed for the same purpose of forming

an employment relationship. See Boston Scientific Corp. v. Kiland, No. 10-4053,

2011 WL 3035088, at *3 (D. Minn. July 25, 2011) (applying Minnesota law and

holding that employment-related agreements must be read together in part because

“entering into both agreements was a condition of guaranteed employment and

compensation”). The Offer Letter also summarizes the key provisions of the

Repayment Agreement, and the Repayment Agreement states that “[Gannon] and

Medtronic wish to enter into an . . . employment relationship,” which, as Gannon

concedes, was formed by his execution of all three documents. The Repayment

Agreement is therefore not a “free-standing contract,” as he claims.

Gannon also contends that the Employee Agreement and Repayment

Agreement are separate contracts because they do not expressly incorporate each

other. But Minnesota courts do not require that separate agreements incorporate each

other to be considered parts of the same contract. Marso, 153 N.W.2d at 289 (“Where

several instruments are made part of one transaction, they will be read together and

each will be construed with reference to the others, although the instruments do not

in terms refer to each other.”).

For these reasons, we hold that the Offer Letter, Employee Agreement, and

Repayment Agreement are parts of a single contract.



B.

We next address Gannon’s argument that language in the Employee Agreement

precludes application of its forum selection clause to this action. The forum selection

clause says that disputes “arising out of or related to this Agreement” must be

litigated in Minnesota state court. Gannon contends that the clause is, at the very

least, ambiguous whether it extends to claims arising from the Repayment Agreement,

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and we should therefore construe it against its drafter, Medtronic. See Hilligoss v.

Cargill, Inc., 649 N.W.2d 142, 148 (Minn. 2002) (“A fundamental principle of

contract law is that when contract language is reasonably susceptible of more than

one interpretation it is ambiguous, and ambiguous contract terms must be construed

against the drafter . . . .”). However, the clause is reasonably susceptible to only one

interpretation.

When analyzing the forum selection clause, we must “avoid an interpretation

that renders a clause meaningless.” See Fortune Funding, LLC v. Ceridian Corp.,

368 F.3d 985, 987 (8th Cir. 2004) (applying Minnesota law). We agree with the

district court that “[b]ecause the words ‘arising out of’ must mean disputes about the

terms of the Employee Agreement—that is, confidentiality, restrictive covenant,

etc.—the words ‘or relating to’ must mean something else.” Medtronic Sofamor

Danek, Inc., et al. v. Gannon, No. 0:17-cv-00943, 2017 WL 4685041, at *4 (D. Minn.

Oct. 16, 2017). Our analysis about whether the Repayment Agreement and Employee

Agreement are different parts of the same contract applies here and requires us to

conclude that the Repayment Agreement is unambiguously “related to” the Employee

Agreement. They were executed at the same time and for the same purpose, and

without either one of them, the Offer Letter would be unenforceable. The Repayment

Agreement and Employee Agreement are also complementary in that they address

different aspects of the same employment relationship. The Repayment Agreement

focuses on compensation, and the Employee Agreement on things like confidentiality,

proprietary inventions, and restrictions on competition. Indeed, the Employee

Agreement expressly saves compensation terms for “separate documents provided to

[Gannon],” another indication that any such document (i.e., the Repayment

Agreement) is “related to” it.

Gannon also relies on the “Prior Agreements” section of the Employee

Agreement, which says that “nothing in [the Employee Agreement] affects any term

or provision of any MEDTRONIC compensation or benefit plan or any agreements

related thereto.” He argues that application of the forum selection clause violates the

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“Prior Agreements” section because doing so “affects” the Repayment Agreement.

But under Minnesota law, “the specific in a writing governs over the general,” and

therefore the “Prior Agreements” section cannot supersede the forum selection clause,

which is specific to the question of proper venue in this case. See Burgi v. Eckes, 354

N.W.2d 514, 519 (Minn. Ct. App. 1984). We also note that Gannon’s interpretation

creates a conflict within the Employee Agreement between the “Prior Agreements”

section and the forum selection clause. Such an interpretation is disfavored. See

Oster v. Medtronic, Inc., 428 N.W.2d 116, 119 (Minn. Ct. App. 1988) (“Where there

is an apparent conflict between two clauses or provisions of a contract, it is the

court’s duty to find harmony between them and to reconcile them if possible.”).

Thus, the language of the Employee Agreement does not preclude application of its

forum selection clause to this action.

We conclude that the Employee Agreement contains a clear and unequivocal

forum selection clause that unambiguously encompasses the Repayment Agreement,

and we affirm the district court’s grant of Medtronic’s motion to remand.