{"id":673,"date":"2014-04-01T13:11:00","date_gmt":"2014-04-01T13:11:00","guid":{"rendered":"https:\/\/www.bfvlaw.com\/former-employees-efforts-to-block-foreign-proceedings-relating-to-restrictive-covenants-fail\/"},"modified":"2014-04-01T13:11:00","modified_gmt":"2014-04-01T13:11:00","slug":"former-employees-efforts-to-block-foreign-proceedings-relating-to-restrictive-covenants-fail","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/former-employees-efforts-to-block-foreign-proceedings-relating-to-restrictive-covenants-fail\/","title":{"rendered":"Former Employees\u2019 Efforts to Block Foreign Proceedings Relating to Restrictive Covenants Fail"},"content":{"rendered":"<p><span><em>Supply Basket, Inc. v. Global Equipment Company, Inc.<\/em>, Civil Action No:\u00a0 1:13-cv-3220-RWS, 2013 WL 5729574 (N.D. Ga. Oct. 22 2013), illustrates some of the issues that frequently come into play when parties battle over the particular forum where a non-compete dispute should be litigated.<\/span><\/p>\n<p><span>The individual plaintiffs in <em>Supply Basket<\/em> were former employees of Global Equipment.\u00a0 They were subject to employment agreements containing non-compete and non-disclosure covenants.\u00a0 Their agreements also contained a mandatory arbitration provision.\u00a0<\/span><\/p>\n<p><span>The individuals left Global Equipment and began working for Supply Basket in May 2013.\u00a0 After the parties\u2019 counsel exchanged letters regarding whether their employment with Supply Basket was in violation of their restrictive covenants, Global Equipment filed a demand for arbitration with the American Arbitration Association against the individual former employees.\u00a0 Global Equipment also initiated a petition for a temporary restraining order in aid of arbitration in a New York state court.\u00a0 The petition for the temporary restraining order was filed on the day after the arbitration was filed.<\/span><\/p>\n<p><span>The day after the arbitration was filed but before the TRO petition was filed, the former employees filed an action for declaratory and injunctive relief in the Superior Court of Gwinnett County.\u00a0 Their suit sought to prevent Supply Basket from pursing litigation or arbitration outside of Georgia to enforce the restrictive covenants.\u00a0 The Superior Court of Gwinnett County denied the plaintiffs\u2019 request for emergency relief.\u00a0 Supply Basket removed the case to federal court.\u00a0<\/span><\/p>\n<p><span>Faced with a deadline to respond to Global Equipment\u2019s demand for arbitration, the former employees and Supply Basket sought preliminary injunctive relief in the federal court.\u00a0 More specifically, they asked the federal court to enjoin Global Equipment from pursuing the arbitration and the litigation in New York.\u00a0<\/span><\/p>\n<p><span>Global Equipment relied on the Anti-Injunction Act to argue that the district court could not stay the proceedings in the New York state court.\u00a0 The district court agreed and denied the plaintiffs\u2019 request to enjoin the New York litigation.<\/span><\/p>\n<p><span>The plaintiffs also asked the district court to enjoin the arbitration proceedings.\u00a0 At a hearing on the plaintiffs\u2019 request for injunctive relief, the plaintiffs challenged the validity of the arbitration clauses in the employees\u2019 agreements.\u00a0 The district court rejected the plaintiffs\u2019 arguments.\u00a0 The district court noted that the employees had agreed in their agreements to arbitrate under the auspices of the American Arbitration Association (\u201cAAA\u201d).\u00a0 The district court further noted that the rules of the AAA provide that an arbitrator has the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.\u00a0 The district court therefore found that any questions regarding the validity of the agreement to arbitrate should be decided by the panel in the arbitration.\u00a0 The district court thus denied the plaintiffs\u2019 request to enjoin the arbitration proceedings.\u00a0<\/span><\/p>\n<p><span>Non-compete disputes often involve battles of where and in what forum the disputes should be litigated.\u00a0 In <em>Supply Basket<\/em>, the plaintiffs\u2019 efforts to block Global Equipment from pursing injunctive relief in the New York state court and from pursuing its damages claims in arbitration were wholly unsuccessful.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supply Basket, Inc. v. Global Equipment Company, Inc., Civil Action No:\u00a0 1:13-cv-3220-RWS, 2013 WL 5729574 (N.D. Ga. Oct. 22 2013), illustrates some of the issues that frequently come into play when parties battle over the particular forum where a non-compete dispute should be litigated. The individual plaintiffs in Supply Basket were former employees of Global [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[70,25,69,16],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Former Employees\u2019 Efforts to Block Foreign Proceedings<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bfvlaw.com\/former-employees-efforts-to-block-foreign-proceedings-relating-to-restrictive-covenants-fail\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Former Employees\u2019 Efforts to Block Foreign Proceedings\" \/>\n<meta property=\"og:description\" content=\"Supply Basket, Inc. v. 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