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Miller v. Honkamp Krueger Fin. Servs.

Miller v. Honkamp Krueger Fin. Servs.

United States Court of Appeals for the Eighth Circuit

March 18, 2021, Submitted; August 24, 2021, Filed

No. 20-3061, No. 20-3081, No. 20-3400

Opinion

 [*1013]  ERICKSON, Circuit Judge.

Cara Miller left her employment at Honkamp Krueger Financial Services, Inc. ("HKFS") and commenced this action, seeking a declaratory judgment that the restrictive covenants in her various employment contracts were unenforceable. HKFS brought counterclaims against Miller and a third-party complaint against Miller's [**2]  new employer, Mariner Wealth Advisors, LLC ("Mariner"). HKFS successfully sought preliminary injunctions enjoining Miller from breaching the non-compete and non-solicitation provisions in her employment contracts. Miller and Mariner appeal. We reverse and vacate the preliminary injunctions.

I. BACKGROUND

In 2006, Miller entered into a written employment agreement with HKFS (the "Employment Agreement") and began working as a financial advisor. The Employment Agreement contained restrictive covenants, including non-compete and non-solicitation provisions. On July 25, 2016, Miller and HKFS entered into an Agreement Ancillary to Employment (the "Ancillary Agreement") that updated the non-solicitation provision. Notably, the Ancillary Agreement did not include a non-compete provision.

Blucora, Inc. acquired HKFS and Miller responded by terminating her employment on September 4, 2020. That same day she commenced this action against HKFS and Blucora seeking a declaration that the restrictive covenants in the Ancillary Agreement are unenforceable. Miller immediately began working for Mariner who is a direct competitor of HKFS.

On September 7, 2020, Miller sent a letter to John Darrah, the chief [**3]  executive officer for HKFS, informing him that she was terminating the Employment Agreement to the extent it survived the Ancillary Agreement. The next day she amended her complaint, alleging that the Employment Agreement was superseded by the Ancillary Agreement (which would have the effect of abrogating the Employment Agreement's non-compete provision).

HKFS answered the amended complaint, filed a third-party complaint against Mariner, and raised a number of counterclaims against Miller. HKFS then moved for a preliminary injunction against Miller, seeking to enforce, among other things, the non-compete and non-solicitation provisions. Following a two-day evidentiary hearing, the district court entered an oral order enforcing the non-compete provision, which it subsequently supplemented with a written Memorandum and Order. The district court also requested and received supplemental briefing on the non-solicitation provision, which it considered before granting a preliminary injunction with respect to that restrictive covenant. Miller and Mariner appeal.

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9 F.4th 1011 *; 2021 U.S. App. LEXIS 25284 **

Cara Miller, Plaintiff - Appellant v. Honkamp Krueger Financial Services, Inc., Defendant - Appellee, Blucora, Inc., Defendant; Mariner Wealth Advisors, LLC, Third Party Defendant - Appellant

Subsequent History: Dismissed by, Motion granted by Miller v. Honkamp Krueger Fin. Servs., 2022 U.S. App. LEXIS 2099, 2022 WL 190434 (8th Cir. S.D., Jan. 20, 2022)

Prior History:  [**1] Appeals from United States District Court for the District of South Dakota - Western.

Miller v. Honkamp Krueger Fin. Servs., 2020 U.S. Dist. LEXIS 213069, 2020 WL 6707204 (D.S.D., Nov. 13, 2020)Miller v. Honkamp Krueger Fin. Servs., 2020 U.S. Dist. LEXIS 183198, 2020 WL 5878031 (D.S.D., Oct. 2, 2020)

CORE TERMS

non-compete, non-solicitation, employment agreement, termination, terms of employment, preliminary injunction, district court, provisions, unsolicited, breach of contract claim, contracts, prevail, survive, restrictive covenant, public policy, accepting, parties, merits

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, De Novo Review, Remedies, Injunctions, Preliminary & Temporary Injunctions, Clearly Erroneous Review, Questions of Fact & Law, Grounds for Injunctions, Likelihood of Success, Labor & Employment Law, Employment Relationships, Employment Contracts, Contract Interpretation, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Irreparable Harm, Preliminary Considerations, Federal & State Interrelationships, Erie Doctrine, Contracts Law, Defenses, Illegal Bargains, Governments, Legislation, Interpretation, Reviewability of Lower Court Decisions, Preservation for Review, Record on Appeal