Damon v. Navsav Holdings, LLC
| Docket Number | 8:23CV351 |
| Decision Date | 25 August 2023 |
| Parties | JACQUELINE DAMON, Plaintiff, v. NAVSAV HOLDINGS, LLC, Defendant. |
| Court | U.S. District Court — District of Nebraska |
MEMORANDUM AND ORDER ON MOTION FOR TEMPORARY RESTRAINING ORDER AND MOTION FOR PRELIMINARY INJUNCTION
This is the third action originating in state court in which a former employee of a Texas insurance company doing business in Nebraska is suing her former employer to bar enforcement of restrictive covenants in her employment contract based on her assertion that the restrictive covenants are unenforceable under Nebraska law.[1] Unlike the plaintiffs in the companion cases, the former employee in this action did not obtain an ex parte temporary restraining order from the state court before the former employer removed the action to this federal court. Thus, this case is before the Court on Plaintiff Jacqueline Damon's Motion for Temporary Restraining Order and Motion for Preliminary Injunction. Filing 4. The Court held a hearing on Damon's Motion for Temporary Restraining Order and Motion for Preliminary Injunction immediately following a joint hearing on the other former employees' Motions for Preliminary Injunctions. For the reasons stated below, the Motion for Temporary Restraining Order is denied as moot and the Motion for Preliminary Injunction is granted.
This statement of the factual background is drawn from the Complaint in this action and the evidence submitted at the preliminary injunction hearing. The Court's factual findings in this decision are provisional and not binding in future proceedings. See Univ. of Tex. v. Camenisch 451 U.S. 390, 395 (1981) () (citations omitted); SEC v. Zahareas, 272 F.3d 1102 1105 (8th Cir. 2001) (same). Unless expressly indicated otherwise, these facts are deemed undisputed for present purposes.
Like Austin Beber and Cody Roach, the other two former employees suing defendant NavSav Holdings, LLC, in separate actions, prior to Damon's employment with NavSav, Damon was an at-will employee of Universal Group, Ltd., (Universal). Filing 16 at 3 (¶ 2). Damon who was then a resident of Omaha, Nebraska, started working for Universal in 2014. Filing 16 at 3 (¶ 2). That same year, Universal promoted Damon to the position of Account Manager, a position sometimes referred to a Lead Marketing CSR, which is a non-sales position. Filing 16 at 3 (¶ 2). In contrast, Beber and Roach were both insurance account representatives for Universal prior to their employment with NavSav. Damon's employment duties at Universal were administrative and included servicing Universal's commercial accounts, submitting claims, and addressing billing issues, almost exclusively for Austin Beber. Filing 16 at 3 (¶ 2). Damon avers that at no time did her employment duties involve trying to solicit or procure policies or clients and that she was never paid commissions because she never had nor had she ever undertaken sales responsibilities. Filing 16 at 3 (¶ 2).
Damon obtained a Nebraska resident license from the Nebraska Department of Insurance on October 16, 2014, so that she could perform services for Universal as an account manager for property, casualty, and personal lines of insurance. Filing 16 at 3 (¶ 3). Damon has maintained that license to date, although she converted it to a non-resident license in 2016 after she moved to Ankeny, Iowa. Filing 16 at 3-4 (¶ 3). From the time of issuance “to date,” that license identifies Damon's business address as Universal's Omaha office location; her business fax number as Universal's Omaha office fax number starting with the Nebraska “402” area code; and her business phone number as her cell phone number starting with the Nebraska “402” area code. Filing 16 at 4 (¶ 3); see also Filing 16 at 4 (¶ 5).
When Damon moved to Ankeny, Iowa, in March or April of 2016, she began working remotely for Universal from her home. Filing 16 at 4 (¶ 4). However, she remained assigned to Universal's Omaha office location as her primary office and throughout her employment with Universal she was occasionally physically present at Universal's Omaha office location as part of her employment duties. Filing 16 at 4 (¶ 4). While Damon was employed with Universal, she was referred to as a member of the “Nebraska Team” and Universal published materials (e.g., the business website) to the public with that reference about her. Filing 16 at 4 (¶ 6). Also, Universal provided Damon with business cards that noted her business location as the Universal Omaha office location and phone number. Filing 16 at 4 (¶ 7). At all times during Damon's employment with Universal, Universal provided her with an email signature block that noted her business location as the Universal Omaha office location and phone number. Filing 16 at 4 (¶ 8).
Although Damon made no mention of it in her declaration, NavSav asserts that Damon signed a “non-solicitation” agreement with Universal on March 21, 2022, that is, shortly before the sale of Universal to NavSav on or about April 14, 2022. See Filing 9-5. NavSav also asserts that as part of the NavSav purchase, Universal assigned to NavSav all right, title, and interest to non-competition, confidentiality, non-disclosure, and other employee restrictive covenants held by Universal. Filing 9-1 at 2 (¶ 8); Filing 9-3 (assignment). Damon disputes that the Universal Agreements were effectively assigned to NavSav. Filing 18 at 12. The Court will address that issue in its legal analysis.
The provision of the March 21, 2022, Agreement that NavSav identifies as the “Damon Non solicitation Agreement” and argues is relevant here is the following:
6. Noncompetition for Certain Universal Group Customers. Upon termination of employment hereunder, either voluntary or involuntarily, and for whatever reason, Employee agrees that for a period of one (1) year following such termination, he [sic] will not, without the written consent of Universal Group, directly or indirectly, solicit or accept any business as described in paragraph 3. hereof, or perform any of the services so described for any Universal Group Customers with whom he [sic] has had business or personal relations during the term of this Agreement.
Filing 9-5 at 2 (¶ 6) (). Paragraph 3 cross-referenced in this provision states the following definition:
3. Universal Group Business. All business, fees, and premiums, including insurance, bond, risk management, self insurance, consulting, brokerage and all other services (collectively the “Universal Group Business”), produced, transacted or received through the efforts of Employee, shall be the sole property of Universal Group.
Dan Headlee, NavSav's Vice President of Commercial Sales, was the owner and operator of Universal prior to its sale to NavSav. Filing 9-1 at 1 (¶¶ 1-2). Headlee avers that Damon also signed a Proprietary Information Agreement, but he does not identify any specific provision of that agreement as relevant to the present dispute. Filing 9-1 at 2 (¶ 11); see also Filing 9-4 (Proprietary Information Agreement). NavSav has not clarified what role it believes Damon's Proprietary Information Agreement plays in the determination of any issue concerning the motion presently before the Court. See generally Filing 8. Thus, the Court will not quote or consider any provisions of that agreement.
Damon avers that on or before April 11, 2022, her employment with Universal ended and on or about April 12, 2022, her employment with defendant NavSav began. Filing 16 at 5 (¶ 9). In his declaration, Headlee states that NavSav purchased the assets of Universal on or about April 14, 2022. Filing 9-1 at 1 (¶ 5). NavSav is in the business of selling insurance products throughout the United States. Filing 9-1 at 1 (¶ 6). Damon alleges in her Complaint that NavSav is a limited liability company with its principal place of business in Beaumont, Texas, but it is certified to transact business in Nebraska and has been so certified since April 28, 2022. Filing 11 at 1 (¶¶ 1-2). Damon alleges that NavSav maintains a registered agent in an office in Douglas County, Nebraska, leases an office in Omaha, Douglas County, Nebraska, at which it conducts the business of selling insurance policies to individuals and businesses in Nebraska, and maintains the inactive tradename “Universal - Nebraska” in Nebraska. Filing 1-1 at 1 (¶¶ 3-4).
Damon avers that her position with NavSav was Account Manager, a position sometimes referred to as a Lead Marketing CSR. Filing 16 at 5 (¶ 9). Damon avers that this was a non-sales position, involving administrative duties, including servicing NavSav's commercial accounts, submitting claims, and addressing billing issues, almost exclusively for Austin Beber. Filing 16 at 5 (¶ 9). She avers further that at no time did her employment duties with NavSav involve trying to solicit or procure policies or clients and she was never paid commissions because she never had nor had she ever undertaken sales responsibilities. Filing 16 at 5 (¶ 9). Damon also avers that at all times during her employment with NavSav, while she was assigned to be the Account Manager for Austin Beber, she also provided “filled-in administrative support” for other producers on occasion. Filing 16 at 5 (¶ 10).
Damon avers that at all times during her employment with NavSav 95% or more of the...
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