United States District Court, W.D. Missouri, Western Division
TEMPORARY RESTRAINING ORDER
ROSEANN A. KETCHMARK, JUDGE.
before the Court is Plaintiff H&R Block Tax Services
LLC's (“H&R Block's”) Motion for
Temporary Restraining Order and Preliminary Injunction (doc.
3), as well as H&R Block's Suggestions in Support of
that Motion (doc. 4). On January 26, 2018, the Court heard
oral arguments on H&R Block's Motion for Temporary
Restraining Order. After review of the Motion for Temporary
Restraining Order, all briefing and argument of counsel, the
Verified Complaint, the record, and applicable law, the
Motion for Temporary Restraining Order is hereby
GRANTED. The Court will hold a hearing on
H&R Block's Motion for Preliminary Injunction on
February 9, 2018 at 3:00 p.m.
JURISDICTION AND CHOICE OF LAW.
jurisdiction over a non-resident defendant may be obtained by
consent or by waiver. Whelan Sec. Co. v. Allen, 26
S.W.3d 592, 595 (Mo.Ct.App. 2000). Personal jurisdiction is
an individual right, and that right may be waived in advance
through a forum selection clause contained in a contract
between the parties. Id. Under Missouri law,
contractual choice-of-law provisions are enforced. PVI,
Inc. v. Ratiopharm GmbH, 253 F.3d 320, 329 (8th Cir.
2001) (citing Rheem Mfg. Co. v. Progressive Wholesale
Supply Co., 28 S.W.3d 333, 339 (Mo.Ct.App. 2000)).
27 of the Franchise License Agreements (“FLAs”)
between the parties, attached as Exhibits 1 and 2 to the
Verified Complaint, specify that Missouri law applies and
further provide for jurisdiction and venue in this forum.
Thus, Defendant has stipulated and consented to Missouri law
as the choice of law and to personal jurisdiction in this
H&R BLOCK SATISFIES THE NECESSARY ELEMENTS TO OBTAIN A
TEMPORARY RESTRAINING ORDER.
following four factors are properly considered when
determining whether a temporary restraining order should
issue: (1) the probability that the movant will succeed on
the merits; (2) the threat of irreparable harm to the movant;
(3) the state of the balance between this harm and the injury
that granting the injunction will inflict on other parties;
and (4) the public interest. Chevron U.S.A. v. 11500
Manager, LLC, 2009 U.S. Dist. LEXIS 58330, at *6 (W.D.
Mo. July 7, 2009); see also Dataphase Sys. Inc. v. C L
Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981) (en banc).
Here, every one of the relevant factors supports H&R
Block's request for entry of a temporary restraining
order to preserve the status quo and to protect
H&R Block from ongoing irreparable injury attributable to
the conduct of Defendant.
Substantial Likelihood of Success
Block has shown a substantial likelihood of success on the
merits of its breach of contract claim against Defendant. The
evidence presented in H&R Block's Verified Complaint
demonstrates that Defendant has violated and is actively
violating the FLAs' reasonable, enforceable
noncompetition and nonsolicitation covenants (collectively,
the “Covenants”), by which he has agreed to be
The FLAs and Their Covenants Are Enforceable.
Missouri law, “[n]on-compete agreements are typically
enforceable so long as they are reasonable.”
Healthcare Servs. of the Ozarks, Inc. v. Copeland,
198 S.W.3d 604, 610 (Mo. 2006) (en banc). The Missouri
Supreme Court has found that a noncompetition agreement is
valid and enforceable if it: (1) “is no more
restrictive than is necessary to protect the legitimate
interest of the employer”; and (2) can be
“narrowly tailored geographically and
temporally.” Id.; see also Osage Glass,
Inc. v. Donovan, 693 S.W.2d 71, 74 (Mo. 1985) (en banc)
(“Covenants against competition must serve a proper
interest of the employer in protecting the good will of a
business, and must be reasonably limited in time and
restrictions are enforceable to protect “the
employer's trade secrets or customer contacts.”
Healthcare Servs., 198 S.W.3d at 610; see also
Superior Gearbox Co. v. Edwards, 869 S.W.2d 239, 247
(Mo.Ct.App. 1993) (“[A] covenant restricting an
employee's right to compete must be reasonably necessary
to protect the employer's legitimate interests and
reasonable as to time and geographic scope.”). The
post-termination Covenants in the FLAs protect interests that
Missouri recognizes as legitimate and are protectable as a
matter of law, including: H&R Block's investment in
the parties' transactions; H&R Block's
established brand, goodwill, and confidential business
information; and H&R Block's interest in preventing
Defendant from unfairly using such assets to compete with
H&R Block, diverting away its clients, and obtaining an
undue advantage for his competing business. See,
e.g., Safety-Kleen Sys., Inc. v. Hennkens, 301
F.3d 931, 937 (8th Cir. 2002) (“The Missouri courts
have frequently held that . . . substantial and
individualized customer contacts are a protectable interest
warranting injunctive relief enforcing a covenant not to
compete.”); Kessler-Heasley Artificial Limb Co. v.
Kenney, 90 S.W.3d 181, 186 (Mo.Ct.App. 2002)
(“Stock in customers, also referred to as customer
contacts, are a legitimate protectable interest.”).
H&R Block also has a legitimate and protectable interest
in protecting its client information and client relationships
from use by a competitor. See Mid-States Paint &
Chem. Co. v. Herr, 746 S.W.2d 613, 617 (Mo.Ct.App. 1988)
(“The employer has protectable interests in trade
secrets and customer contacts.”); see also Naegele
v. Biomedical Sys. Corp., 272 S.W.3d 385, 389
(Mo.Ct.App. 2008) (“In Missouri, the courts have
identified two protectable interests of employers: customer
contacts and trade secrets.”).
case, the Covenants are also appropriately narrow in both
time and geographic reach. First, the noncompetition and
nonsolicitation provisions are limited to two years after the
termination of the FLAs, subject to tolling for periods of
noncompliance. Furthermore, the geographic area of the
noncompetition provision is limited to Defendant's former
franchise territories and an area within twenty-five miles of
those territories. See, e.g., H&R Block Tax
Servs. LLC v. Clayton, No. 4:16-cv-00185, 2016 WL
1247205, at *3 (W.D. Mo. Mar. 24, 2016) (Bough, J.)
(upholding 2-year, 25-mile non-competition agreement in a
franchise agreement); H&R Block Enters. LLC v.
Ascher, No. 4:15-cv-00178, 2015 WL 12746197, at *2 (W.D.
Mo. Apr. 3, 2015) (Bough, J.) (upholding three- or five-year,
50-mile non-competition agreement under an asset purchase
agreement); Kessler-Heasley, 90 S.W.3d at 188
(upholding five-year limit within a 50-mile radius);
Watlow Elec. Mfg. Co. v. Wrob, 899 S.W.2d 585,
587-88 (Mo.Ct.App. 1995) (upholding five-year time limit);
Champion Sports Ctr., Inc. v. Peters, 763 S.W.2d
367, 368-70 (Mo.Ct.App. 1989) (enforcing a restrictive
covenant barring the seller of a business from competing with
it for eight years in three counties). The Covenants are also
appropriate under Missouri law because they were agreed to as
part of a business transaction. See Orthotic &
Prosthetic Lab, Inc. v. Pott, 851 S.W.2d 633, 643 n.4
(Mo.Ct.App. 1993) (explaining that “Missouri courts
have long recognized a distinction between covenants
ancillary to a sale of a business and covenants merely
ancillary to an employment contract, showing substantially
greater liberality in enforcing the former”).
Covenants are valid under Missouri law and will be enforced
against Defendant. They are reasonably tailored to protect
H&R Block's legitimate interests and are ...