Schroeder & Barrett Wiik Score Non-Compete and Trade Secret Win, Defeating Preliminary Injunction Motion Sought by UnitedHealth Group
A Best & Flanagan team led by partners Joel Schroeder and Katie Barrett Wiik recently secured a win in Minnesota federal court. In denying a motion for a preliminary injunction by UnitedHealth Group, the Court declined to enforce non-compete provisions contained in UHG’s stock options and restricted stock unit agreements.
Our client Carlos Louro, a former UHG underwriting executive, resigned from UHG to work for one of UHG’s competitors, Anthem. In accepting the position at Anthem, Louro worked carefully with Anthem to structure a position that served a different business segment from his position at UHG, in order to honor the terms of his non-compete with UHG. Louro resigned transparently, but UHG raised concerns with Anthem about Louro’s intended position. In the midst of negotiations with Anthem, UHG sued Louro on the day before he was supposed to start working for Anthem, and asked the court to issue an injunction blocking Louro from accepting his intended role with Anthem.
The Best & Flanagan team vigorously challenged UHG’s motion for a preliminary injunction. In a 19-page order released on February 12, 2021, Chief Judge Tunheim of the U.S. District Court for the District of Minnesota denied UHG’s motion for a preliminary injunction in its entirety and dissolved a previously-issued temporary restraining order. The Court found that UHG had failed to establish a likelihood of success on its claims for breach of the non-compete and threatened trade-secret misappropriation under federal, Minnesota and Delaware law. The Court credited Louro’s and Anthem’s efforts to structure a role to address UHG’s non-compete and found that there was no reason to distrust Louro’s and Anthem’s representations.
The Court also found that UHG had failed to establish irreparable harm and that enjoining Louro from his intended role at Anthem was not reasonably necessary to protect UHG’s legitimate business interests. In finding that the balance of harms weighed in Louro’s favor, the Court observed that UHG had “not offered any clear indication of harm, aside from the unactionable injury of losing a valued employee to a competitor and conclusory statements about inevitable disclosure and market competition.”
Best & Flanagan’s litigation team regularly represents employers and employees in non-compete litigation in state and federal courts. To learn more about our Non-Compete and Trade-Secret Litigation practice, click here.