Fast-Moving Louisiana Court Action Makes Later Minnesota Action Sanctionable?

Update (July 20, 2011):  In this interstate employment law battle discussed below, C.H. Robinson lost but was not sanctioned, at least (correctly predicted by Minnesota Litigator (below)).

Original post (June 13, 2011):  The oddities of our federal system, many states comprising a single nation with overlapping and sometimes conflicting laws, are often highlighted in cross-border employment cases because there is signficant movement of labor across state lines, of course, and substantial differences in various states’ laws on many different aspects of employment.

Take “non-competes” or non-competition agreements…Some states really don’t like them.  So, for example, a Minnesota employer can hire a Louisianan for work in Louisiana, including in the employment contract a non-compete that is permissible and enforceable under Minnesota law, and, conceivably, the worker can take a competing job in Louisiana (a state that does not like non-competes) and, particularly if he gets to court first in Louisiana, he stands a good chance of having the non-compete thrown out as “contrary to Louisiana public policy.”

This happened with former C.H. Robinson employee/Louisianan George Lobrano.

Then, from Lobrano’s lawyers’ perspective, C.H. Robinson, notwithstanding its defeat down in Louisiana, persisted in trying to vindicate its rights in an action in Minnesota, which Lobrano’s lawyers argue is not just a losing maneuver, but a sanctionable one.

C.H. Robinson, in response, is in the unenviable position of having to argue that it may have in fact lost the case, but the case is not such a loser as to rise to the level of being sanctionable.

The motion for sanctions is before Sr. U.S. District Court David S. Doty (D. Minn.).

Given the widely recognized distaste with which court generally view sanctions motions, it does not seem too risky a prediction to predict that C.H. Robinson and its counsel will avoid the imposition of sanctions in this case.  On the other hand, C.H. Robinson and all Minnesota companies with offices in other states with other laws on non-competes might want to consider other contracting options on the front-end to deal with this particular risk because the chance of a positive outcome at the back end is zero.