I’m pleased to report that on December 6, 2016, Judge Kevin Siefken of the Mower County District Court signed an order dismissing all claims against my client in a lawsuit entitled Brinkman Claim Service LLC v. Jeremy Korn and Pharmacists Mutual Insurance Company. The facts may be summarized as follows. Plaintiff Brinkman Claim Service is an independent insurance adjusting company located in Austin, Minnesota that adjusts first party property and casualty claims for insurers on an outsourced basis. Co-Defendant Pharmacists Mutual, a national insurance company located in Algona, Iowa, was one of its customers. In the course of his job duties with Brinkman, my client, Jeremy Korn, adjusted claims for Pharmacists and other Brinkman customers. After some years using Plaintiff to adjust its Minnesota claims, Pharmacists made a companywide decision to switch to adjusting the bulk of its policyholders’ claims in house. It then posted its new position of claim adjuster, invited my client to apply, and eventually extended him a job offer. My client accepted the offer and resigned from his position with Plaintiff, giving the customary (although not legally required) two weeks notice. Upset at this loss of revenue, Plaintiff sued both he and his new employer.
In its two-count Complaint, Plaintiff alleged my client (1) breached his employment agreement, which contained non-competition and non-solitication provisions; and (2) violated his common law duty of loyalty. The Court dismissed both counts on Summary Judgment, following the completion of discovery. As to the first count, the Court agreed with me that the contract’s post-employment restrictive covenants lacked consideration, following long Minnesota’s longstanding requirement that “mid-stream” noncompetes be supported by independent consideration. More significant, perhaps, was the Court’s conclusion that prohibiting an employee from accepting employment with a customer is never, without more, a legitimate business interest. As to the second count, the Court agreed with me that the mere act of applying for work with a competitor will never implicate the duty of loyalty. Any other result would effectively impute a non-compete into every contract of employment. To read the Court’s opinion, click here: 12-06-16 – Order (00701945xAF6E8).