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Farm Credit Services of America v. Mens

United States District Court, D. Nebraska

January 18, 2019

FARM CREDIT SERVICES OF AMERICA, FLCA, Plaintiff,
v.
KATHY MENS, Defendant.

          MEMORANDUM AND ORDER

          Laurie Smith Camp Senior United States District Judge.

         This matter is before the Court on the Motion for Temporary Restraining Order and Preliminary Injunction, ECF No. 4, and the Motion for Expedited Discovery, ECF No. 6, filed by Plaintiff Farm Credit Services of America, FLCA (“Farm Credit”). Farm Credit notified Defendant Kathy Mens of the hearing, and counsel for Mens entered an appearance. The parties appeared before the Court, through counsel, on January 18, 2019. The parties agreed that the Motion for Temporary Restraining Order could be consolidated with the hearing on Farm Credit's Motion for Preliminary Injunction. After being heard on the matter, and for the reasons stated below, the Court will grant the Motion for Preliminary Injunction. The Motion for Expedited Discovery will be denied as moot.

         BACKGROUND

         The following is a summary of the facts alleged in Farm Credit's verified Complaint, which were not disputed by counsel for Mens at the time of the hearing and which will be accepted as true for purposes of the pending Motion for Temporary Restraining Order and Preliminary Injunction only.

         Farm Credit provides financial services to ranchers and farmers in the Midwestern United States, primarily Iowa, Nebraska, South Dakota and Wyoming. Farm Credit's services include private hail insurance, federally reinsured multiple peril crop insurance, revenue protection, yield protection, livestock insurance, named peril insurance and any other current or future crop insurance plans issued under the authority of the Federal Crop Insurance Act, 7 U.S.C. §1508 et seq. (collectively “Crop Insurance”).

         Farm Credit employed Mens from December, 20, 2012, through May 17, 2018, as an Insurance Officer. Her duties included marketing crop insurance to existing Farm Credit customers (the “Customers”) as well as identifying and soliciting new crop insurance customers on behalf of Farm Credit. As part of her duties, Mens learned the Customers' needs, history, financial risk profile, and business operations to sell and service appropriate crop insurance coverage to the Customers. A critical part of Mens's job duties was to develop and maintain strong personal relationships with the Customers.

         Although Mens was an experienced insurance agent prior to her employment with Farm Credit, Farm Credit continued to provide Mens with training, supported her sales efforts, paid her license, and provided her with access to the Customers. Farm Credit also provided its brand on her business cards, correspondence, website and various company-produced marketing material. Farm Credit also financed dinners, lunch, promotional items, and other activities designed to promote Mens's relationships with the Customers.

         Farm Credit alleges that its reputation, brand, and support played an essential role in the Customers' trust in and loyalty to Mens. Farm Credit permitted Mens to be the primary contact with the clients with whom she worked, and other insurance specialists at Farm Credit were not permitted to be the direct liaison.

         As part of its efforts to maintain its customer good will and confidentiality of its property and other information, and as a condition of access to this information, Farm Credit required all insurance specialists and similarly situated employees, including Mens, to execute the Contract which provided in relevant part:

2. NONSOLICITATION OF CUSTOMERS. For a period of two (2) years following the termination (voluntary or involuntary, for any reason or no reason) of Employee's employment with FCSAmerica and/or Frontier, Employee shall not, seek or accept employment with, and will not call on or solicit the business of, or sell to, or service (directly or indirectly, on Employee's own behalf or in association with or on behalf of any other individual or entity), any of the customers of FCSAmerica and/or Frontier with whom Employee actually did business and had personal contact while employed by FCSAmerica or Frontier, except to the extent such activities are unrelated to and not competitive with the business, products or services that Employee offered or provided on behalf of FCSAmerica or Frontier and cannot adversely affect the relationship or volume of business that FCSAmerica and/or Frontier have with such customers.
3. NONSOLICITATION OF EMPLOYEES. For a period of two (2) years following the termination (voluntary or involuntary, for any reason or no reason) of Employee's employment with FCSAmerica and/or Frontier, Employee shall not (on Employee's own behalf or in association with or on behalf of any other individual or entity other than FCSAmerica or Frontier), seek, recruit or otherwise solicit, for employment any then current employee of FCSAmerica or Frontier with whom Employee actually worked and had personal contact with while employed by FCSAmerica and/or Frontier, except for a position, engagement or business opportunity that is not competitive with the business, products or services that Employee (or any recruited or otherwise solicited employee) offered or provided on behalf of FCSAmerica or Frontier and cannot adversely affect the relationship or volume of business that FCSAmerica and/or Frontier have with their customers.
4. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During the term of Employee's employment with FCSAmerica and Frontier and following the termination (voluntary or involuntary, for any reason or no reason) of Employee's employment with FCSAmerica and/or Frontier, Employee shall not use for any purpose or divulge, disclose, or communicate to any person or entity, in any manner whatsoever, any Confidential Information acquired during or as a result of Employee's employment with FCSAmerica and/or Frontier. Employee agrees that the Confidential Information is proprietary to FCSAmerica or Frontier and is owned solely by FCSAmerica or Frontier, and that the disclosure thereof would cause irreparable harm and damage to the business of FCSAmerica and/or Frontier. Employee will not access, copy, download, transmit, or reproduce any Confidential Information (whether stored electronically or otherwise) for any purpose other than furthering the business interests of FCSAmerica and Frontier. Employee will never use or disclose Confidential Information (even following the termination of employment) for any purpose other than furthering the business interests of FCSAmerica or Frontier. Upon termination (voluntary or involuntary, for any reason or no reason) of Employee's employment with FCSAmerica and/or Frontier, Employee shall immediately return to FCSAmerica and Frontier, respectively all data, materials and other documents containing or related to any Confidential Information belonging to each respectively.

Contract at 1-2; ECF No. 1-1, Page ID 11.

         The Contract obligated Mens not to use any confidential information or other property of Farm Credit for any purpose other than the work of Farm Credit. Mens was obligated to return to Farm Credit all of its property at the time she ended her services with Farm Credit. Contract at 2; ECF No. 1-1. Mens agreed that the exclusive venue for trial would be in state or federal court in Douglas County, Nebraska, and that the substantive law of Nebraska would govern the claim.

         On or about May 17, 2018, Mens's employment with Farm Credit ended. At the hearing on Farm Credit's Motions, Farm Credit presented evidence that after the termination of Mens's employment, on a date uncertain, she became employed with a competing company, FBN, in which she held a similar position to that which she held with Farm Credit. In the time since her employment with Farm Credit ended, Mens has persuaded at least four Customers with whom she did business ...


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