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Symphony Diagnostic Services No. 1 Inc. v. Greenbaum

United States Court of Appeals, Eighth Circuit

July 6, 2016

Symphony Diagnostic Services No. 1 Inc., doing business as MobilexUSA, a California corporation, Plaintiff- Appellant
v.
Kimberly Greenbaum; Josephine Tabanag, Defendants-Appellees

          Submitted: January 13, 2016

         Appeal from United States District Court for the Western District of Missouri - Jefferson City

          Before LOKEN, GRUENDER, and KELLY, Circuit Judges.

          KELLY, Circuit Judge.

         After Ozark Mobile Imaging was sold to Mobilex by means of an asset purchase, two former Ozark employees, Kimberly Greenbaum and Josephine Tabanag, went to work for Mobilex's competitor, BioTech X-Ray. Mobilex sued Greenbaum and Tabanag to enforce the non-compete and confidentiality agreements they had signed with Ozark. The district court granted summary judgment in favor of Greenbaum and Tabanag on the basis that a personal services contract cannot be assigned to a subsequent employer under Missouri law without the employee's contemporaneous consent. Because we find that the non-compete and confidentiality agreements at issue here were not personal services contracts and could be assigned without the consent of Greenbaum and Tabanag, we reverse and remand.

         I

         Both Greenbaum and Tabanag worked as mobile x-ray technicians for Ozark prior to its acquisition by Mobilex: Greenbaum from March 2007 onwards, and Tabanag beginning in October 2010. Greenbaum started as a part-time employee, but was eventually given a full-time position and promoted to district manager. Tabanag too described her position at Ozark as full-time, working 40-plus hours a week with full benefits. Neither, according to Mobilex, had a written employment contract.[1] At the time they left Ozark, Greenbaum made $21.50 an hour and Tabanag made $17.50 an hour.

         In September 2007, Greenbaum signed a non-compete agreement and a confidentiality agreement with Ozark. Tabanag signed essentially identical agreements in October 2010. Both non-competes began by stating that the employee was entering into the agreement "[i]n consideration of his/her employment by Mobile Medical Services Inc., Ozark Mobile Imaging, Clearview Mobile Imaging, LLC and/or its affiliates . . . ." They went on to state that during his or her term of employment and for two years afterwards, the employee agreed within a specified geographical area[2] not to:

1. Directly or indirectly engage in the mobile diagnostic business.
2. In any manner be connected with or employed by a person, company, firm, or corporation engaged in the mobile diagnostic business.
3. For himself/herself or on behalf of any other person, partnership, or corporation call on any customer or customers of Mobile Medical Services, Ozark Mobile Imaging, Clearview Mobile Imaging, LLC, and/or its affiliates, for the purpose of soliciting their business for others.

         The separate confidentiality agreements Greenbaum and Tabanag signed consisted of an acknowledgment that they had been instructed on their employer's confidentiality policy, and that they understood that failure to maintain confidentiality was just cause for dismissal.

         Mobilex acquired Ozark through an Asset Purchase Agreement in December 2012. Around this same time, it made Greenbaum an offer of employment. Unlike her previous position, the job Mobilex offered Greenbaum was part time, with a 90-day probationary period, no guaranteed number of hours, and no guaranteed benefits. According to an affidavit Mobilex submitted, Greenbaum was offered a part-time position because she had asked to work fewer hours while at Ozark. Greenbaum refused Mobilex's offer.

          Tabanag was likewise made an offer by Mobilex. Although Mobilex offered her the same wage she had been earning at Ozark, the position she was offered was part time and without guaranteed benefits. Tabanag also refused Mobilex's offer.

         Greenbaum took on a new position as a mobile x-ray technician at Mobilex's competitor, Biotech X-ray, in January 2013, and Tabanag followed suit in February. In September 2013, Mobilex filed a complaint in federal court against Greenbaum and Tabanag, alleging state law claims for breach of contract, breach of fiduciary duty, and tortious interference with a business relationship. After Greenbaum and Tabanag moved for summary judgment, the district court concluded that the success of each of the claims depended on whether the non-compete and confidentiality agreements were assignable from Ozark to Mobilex without Greenbaum's and Tabanag's contemporaneous consent. The district court found that Greenbaum's and ...


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