Spok, Inc. v. Goel
- David Doty
- 0:19-cv-02096
- U.S. District Court · District of Minnesota
- 6
In Spok, Inc. v. Goel, Judge Doty stayed Spok’s lawsuit and sent arbitrability to the arbitrator under the parties’ agreement.
Spok, Inc. and Hemant Goel are affected. Spok’s lawsuit is stayed, and the arbitrator—not the court—will initially decide whether the dispute falls within the arbitration agreement.
What happened
Spok, Inc. sued Hemant Goel, alleging that he breached an agreement by working for Capsule Technologies after leaving Spok. Spok sought an injunction and money damages.
Goel asked the court to dismiss or stay the case in favor of arbitration. The agreement broadly required arbitration of disputes related to the agreement and incorporated the American Arbitration Association’s rules. Spok argued that another provision required a court to decide disputes about the noncompetition clause.
The court held that the agreement clearly assigned the question of whether this dispute must be arbitrated to the arbitrator. Judge David S. Doty granted Goel’s motion to stay and ordered that the case remain stayed while arbitration is completed or until the arbitrator determines that the dispute is not subject to arbitration.
The detailed version
- Spok, Inc. v. Goel · No. 0:19-cv-02096
- David Doty
- Oct. 24, 2019
Background
Spok, Inc. sued Hemant Goel over his employment with Spok and subsequent work for Capsule Technologies. Goel had served as Spok’s chief operating officer and was later promoted to president. The parties’ Amended and Restated Executive Severance and Change in Control Agreement replaced an earlier employment agreement and included a two-year noncompetition provision. The agreement also stated that a violation of that provision would cause irreparable damage and that Spok would be entitled to seek an injunction.
Goel resigned from Spok on April 26, 2019, and soon afterward began working for Capsule Technologies as its chief executive officer. Spok alleged that this work breached the noncompetition provision and sought a permanent injunction and monetary damages.
Motion and analysis
Goel moved to dismiss or stay the lawsuit in favor of arbitration. The agreement required arbitration of disputes, claims, or controversies arising out of or relating in any way to the agreement, its termination, or a termination of employment. It also provided that arbitration would use the employment dispute-resolution rules of the American Arbitration Association.
The court explained that the initial question was who should decide whether the dispute was subject to arbitration: the court or the arbitrator. The court held that the agreement clearly and unmistakably assigned that question to the arbitrator. It relied on both the agreement’s broad language and its incorporation of the American Arbitration Association rules, which the court treated as showing the parties’ intent to delegate questions about arbitrability.
Spok argued that the agreement’s injunction provision required a court, rather than an arbitrator, to decide disputes involving the noncompetition provision. The court rejected that argument, concluding that the provision did not undermine or conflict with the arbitration clause’s assignment of arbitrability to the arbitrator.
Disposition
The court granted the motion to stay. It ordered that the matter remain stayed pending completion of arbitration or a determination by the arbitrator that the dispute is not subject to arbitration. The order did not grant or deny a dismissal of the lawsuit.
Judge David S. Doty issued the order.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.