Bannister v. Bemis Co., Inc.

• Decision Date: 25 February 2009
• Docket Number: No. 08-1634.,08-1634.
• Citation: 556 F.3d 882
• Parties: Roger William BANNISTER, Appellee, v. BEMIS COMPANY, INC., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

556 F.3d 882

Roger William BANNISTER, Appellee, v. BEMIS COMPANY, INC., Appellant.

No. 08-1634.

United States Court of Appeals, Eighth Circuit.

Submitted: November 14, 2008.

Filed: February 25, 2009.

Matthew E. Damon, argued and briefed, Minneapolis, MN, David A. James, Mark Girouard, on the brief, Minneapolis, MN, for appellant.

Brian Emery Cote, argued, Minneapolis, MN, for appellee.

Before MURPHY, HANSEN, and RILEY, Circuit Judges.

HANSEN, Circuit Judge.

Bemis Company, Inc. (Bemis) appeals from the district court's¹ summary judgment order awarding Roger Bannister $81,051.36 based on Bemis's breach of a Confidentiality and Non-Competitive Agreement. Having carefully reviewed the record, we affirm.

I.

Roger Bannister was the Director of Technical and Product Development for Bemis, where he had worked since 1991. Bannister entered into a Confidentiality and Non-Competitive Agreement (NCA) with Bemis in December 2000, which, among other things, prohibited Bannister from working for a Bemis competitor for 18 months following the termination of his employment. In the event that Bannister's employment ended with Bemis and he was "unable to obtain employment consistent with [his] abilities and education solely because of the provisions of paragraph c. [of the NCA which prohibited his employment with a `Conflicting Organization'], such provisions ... continue[d] to bind [him] only as long as Bemis, in its sole discretion, ... ma[d]e payments to [him] equal to [his] monthly base salary at the time of [his] termination...." (Appellant's Add. at 15, NCA ¶ d.) Paragraph d. of the NCA further required Bannister to provide Bemis with a detailed written account of his "good faith and aggressive effort[s]" to obtain employment as well as a sworn statement that although he had made a good faith and aggressive job search, the NCA was the sole reason for his unemployment. For any month in which Bannister failed to provide the required documentation, Bemis was relieved of making the monthly payment.

In March 2004, Bannister requested that Bemis release him from the noncompetition provisions of the NCA so that he could accept a position with Mondi Packaging (Mondi), one of Bemis's competitors, but Bemis refused to release Bannister. Around the same time, Bemis filed suit against Mondi and two former Bemis employees who had accepted positions with Mondi alleging the misappropriation of trade secrets and the disclosure of confidential information. Mondi and Bemis eventually settled the lawsuit and entered into an agreement in October 2004 under which Mondi agreed, for a period of 18 months from the date of the settlement agreement, not to hire any Bemis employees who were then or who became subject to a noncompetition agreement. In December 2004, Bemis offered Bannister a severance package of $40,000 and a release from the noncompetition provisions of the NCA except as it related to Mondi. This time, Bannister declined. Bemis terminated Bannister's employment on January 14, 2005.

On February 17, 2005, Bannister's counsel sent a letter to Bemis requesting payment of his monthly salary under the NCA because he was unemployed due solely to the noncompetition provisions of the NCA, attaching a February 7, 2005, letter he had received from Mondi, which informed him that Mondi "would like to extend an offer of employment to [him]" but could not because it was Mondi's understanding that Bannister was subject to a noncompetition agreement with Bemis as of October 8, 2004. (Appellant's App. at 91.) Bannister received no response from Bemis, and on March 31, 2005, Bannister sent a job contacts log to Bemis that detailed his job search through March 2005. He again requested that Bemis start paying his monthly salary under the NCA.

Bemis's counsel responded with a letter on April 14, 2005, in which it stated that "[w]ith respect to [Mondi], Bemis is simply not inclined to meet your request as [Mondi] has a separate agreement with Bemis Company in which it will not and cannot offer employment to anyone who was subject to a[NCA] at the time that agreement became effective." (Appellant's Add. at 18.) The letter continued, stating that "Bemis did and does release Mr. Bannister from paragraph d of the noncompetition portion of his Confidentiality and Noncompetitive Agreement as it relates to all other companies other than [Mondi]." (Id. at 19 (emphasis added).) Bannister responded by letter on April 25, 2005, that the April 14 Bemis correspondence was the first notice of his release to pursue employment with any competitor other than Mondi and that he considered the release a partial release because of the Mondi exception. Bemis then confirmed in a letter dated April 27, 2005, that Bannister could accept "employment with any company other than [Mondi,]" and reiterated its position that there were no damages due under the NCA "based on the fact that Mr. Bannister has been released to seek employment with any company other than [Mondi]," noting that even if Bannister had been released to seek employment with Mondi, Mondi could not hire him because of the Bemis/Mondi settlement agreement. (Appellee's App. at 12-13.)

Bannister accepted a position with Bancroft Bag, Inc., a Bemis competitor, on October 24, 2005. He brought this breach of contract claim against Bemis for its failure to pay his monthly salary under the NCA for the nine-month period of January through October 2005. Both parties moved for summary judgment. The district court found the NCA to be unambiguous and granted summary judgment to Bannister, awarding him $81,051.36, which represented his salary for the entire nine-month period that he was unemployed. Bemis appeals.

II.

We review the district court's summary judgment order and its interpretation of state law de novo, applying the same standards applied by the district court. STL 300 N. 4th, LLC v. Value St. Louis Assocs., L.P., 540 F.3d 788, 792 (8th Cir.2008). "Summary judgment is appropriate if the record shows no genuine issue of material fact, entitling the moving party to a judgment as a matter of law." Corn Plus Co-op. v. Cont'l Cas. Co., 516 F.3d 674, 678 (8th Cir.2008). We apply Arkansas law to this diversity contract case based on the contract's choice-of-law clause. "Under Arkansas law, the determination [of] whether a contract is ambiguous is a question of law" for the court. Jet Asphalt & Rock Co. v. Angelo Iafrate Constr., LLC, 431 F.3d 613, 616 (8th Cir. 2005).

We agree with the district court that the provisions of the NCA are clear and unambiguous. The NCA unambiguously provides that Bemis had the sole discretion to determine whether to enforce the noncompetition covenants by choosing to pay or not to pay Bannister his monthly salary. If Bemis chose to enforce the provisions, Bannister could not accept employment with a Bemis competitor, and he was required to provide Bemis with a detailed written account of his efforts to locate employment along with a sworn statement that he was unemployed solely because of the NCA before he was entitled to receive his base monthly salary. The corollary to Bemis's discretion as to whether to enforce the noncompetition provisions is that if Bemis did choose to enforce the provisions, then Bemis was required to pay Bannister his monthly salary as long as Bannister met the prerequisites contained in the NCA.

The underlying facts are not in dispute; it is only the operative effect of those facts on the NCA about which the parties disagree. It is clear from the language of the correspondence between Bemis and Bannister that Bemis did not grant Bannister a full release from the noncompetition provisions of the NCA. Bemis stated in its April 14 letter that it "did and does release Mr. Bannister from paragraph d ... as it relates to all other companies other than [Mondi]" (Appellant's Add. at 19 (emphasis added)), and it reiterated in its April 27 letter that "Mr. Bannister has been released to seek employment with any company other than [Mondi]" (...