United States District Court, W.D. Missouri, Western Division
ORDER GRANTING PRELIMINARY INJUNCTION
NANETTE K. LAUGHREY, United States District Judge.
before the Court is Plaintiff H&R Block Tax Services
LLC's (“H&R Block's”) Motion for
Preliminary Injunction, as well as H&R Block's
Suggestions in Support of that Motion. After review of that
Motion, the evidence presented at the Preliminary Injunction
Hearing held on March 28, 2019, all briefing and argument of
counsel, the Verified Complaint, the record, and applicable
law, the Motion is hereby GRANTED.
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, 326 (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 Agreement (“FLA”)
between the parties, attached as Exhibit 1 to the Verified
Complaint, specifies that Missouri law applies and further
provides for jurisdiction and venue in this forum. Thus,
Defendants have stipulated and consented to Missouri law as
the choice of law and to personal jurisdiction in this Court.
H&R BLOCK HAS SHOWN THAT IT IS ENTITLED TO THE REQUESTED
following four factors are properly considered when
determining whether a preliminary injunction 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. Kroupa v. Nielsen, 731
F.3d 813, 818 (8th Cir. 2013); see also Dataphase Sys.
Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir.
1981) (en banc). “No single factor in itself is
dispositive; in each case all of the factors must be
considered to determine whether on balance they weigh towards
granting the injunction.” Baker Elec. Coop., Inc.
v. Chaske, 28 F.3d 1466, 1472 (8th Cir. 1994) (internal
quotations omitted). Moreover, in considering these factors,
the court may properly consider evidence that would
ordinarily be inadmissible, such as hearsay, in support of
granting a preliminary injunction. See, e.g.,
Ass'n of Cmty. Organizations for Reform Now v.
Scott, No. 08-CV-4084, 2008 WL 2787931, at *3 n. 5 (W.D.
Mo. July 15, 2008).
every one of the relevant factors supports H&R
Block's request for entry of a preliminary injunction to
preserve the status quo and to protect H&R Block
from ongoing irreparable injury attributable to
H&R Block Is Substantially Likely to Succeed on the
Merits of Its Claims Against Defendants
Block has shown a substantial likelihood of success on the
merits of its breach of contract claim against Defendants.
The evidence presented in H&R Block's Verified
Complaint and at the Preliminary Injunction Hearing
demonstrates that Defendants-as well as other persons and
entities acting in concert with them-have violated and are
actively violating the FLA's reasonable, enforceable
noncompetition and nonsolicitation covenants (collectively,
the “Covenants”), by which they have agreed to be
The Covenants Are Enforceable and Reasonably
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
Osage Glass, 693 S.W.2d at 74 (“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 space.”); 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 FLA 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 Defendants from unfairly
using such assets to compete with H&R Block, diverting
away its clients, and obtaining an undue advantage for their
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 rights 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
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 FLA, subject to tolling for periods of
noncompliance. Furthermore, the geographic area of the
noncompetition provision is limited to Defendants' former
Franchise Territory and an area within twenty-five miles of
that territory. 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); Long v.
Huffman, 557 S.W.2d 911, 915 (Mo.Ct.App. 1977)
(upholding a covenant barring competition for five years
within a sixty-mile radius). The Covenants are also
appropriate under Missouri law because they were agreed to as