United HealthCare Services Incorporated v. Guemple

Background

United Healthcare Services, Inc. and UnitedHealth Group Incorporated, which the opinion calls “United” collectively, sought confirmation of an arbitration award against James Guemple, a former United employee. Guemple worked for United from November 2018 through January 5, 2024, and then began working for Regence BlueCross BlueShield of Utah, identified in the opinion as a United competitor.

Guemple had signed an employment arbitration policy and several agreements containing confidentiality, nonsolicitation, and noncompetition provisions. United initiated arbitration after becoming concerned that his new employment violated those restrictions. On May 13, 2024, the arbitrator issued findings of fact, legal conclusions, and a preliminary injunction. The injunction restricted specified activities involving United’s confidential information, solicitation, and competition, and also identified activities that it did not prohibit.

Legal Standard and Arguments

Section 9 of the Federal Arbitration Act requires a court to confirm an arbitration award when the parties’ agreement permits confirmation, unless the award is vacated, modified, or corrected under the Act. Although Guemple did not file a separate motion to vacate, the court treated his opposition to confirmation as a motion to vacate.

Guemple challenged the award under the Federal Arbitration Act’s provision concerning arbitrators who exceed their powers or fail to issue a mutual, final, and definite award. He argued that the award was not final because it granted only preliminary relief, was not definite because it assigned United responsibility for identifying some covered organizations and was allegedly vague or contradictory, and reflected legal and factual errors by the arbitrator.

Court’s Analysis

The court held that the preliminary injunction was final enough for confirmation under the Federal Arbitration Act. Although arbitration awards generally must complete the arbitration before confirmation, courts routinely confirm preliminary-injunction awards. The court reasoned that confirmation was necessary to give the injunction effective force during the time-sensitive dispute. It also found that the award appeared to resolve every claim raised in the arbitration and distinguished an earlier case involving an award that resolved only limited issues in a larger dispute.

The court rejected Guemple’s definiteness challenge. United had provided Guemple with the list of Utah providers and customers covered by the award, and Guemple did not identify a specific problem with the list. The court also found no contradiction between the award’s restrictions on activities involving strategies and plans learned at United and its statement that certain meetings concerning nonconfidential and nonstrategic issues were permitted.

The court further held that Guemple’s alleged legal and factual errors did not justify vacating the award. Judicial review of arbitration awards is highly limited, and an arbitrator does not exceed authority merely by allegedly interpreting a contract or facts incorrectly. The court found that the arbitrator had considered the restrictive covenants, the facts, and the injunction’s terms.

The court also rejected Guemple’s specific arguments that the award exceeded the noncompetition provision, ignored the provision’s lookback period and confidential-information requirement, restricted activities outside his former Key Accounts work, or improperly covered contacts with brokers. The court concluded that these arguments either misread the award or the contracts and did not show that the arbitrator had exceeded the arbitrator’s powers.

Disposition

The court granted United’s motion to confirm the arbitration award. It confirmed the Interim Arbitration Award of May 13, 2024 and ordered that judgment be entered accordingly. Judge Eric C. Tostrud signed the order on October 3, 2024.