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The Honorable Richard H. Kyle, United States District Judge for the District

of Minnesota.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 08-1634

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Roger William Bannister,

Appellee,

v.

Bemis Company, Inc.,

Appellant.

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Appeal from the United States

District Court for the

District of Minnesota.

 [PUBLISHED]

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Submitted: November 14, 2008

 Filed: February 25, 2009

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Before MURPHY, HANSEN, and RILEY, Circuit Judges. 

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HANSEN, Circuit Judge.

Bemis Company, Inc. (Bemis) appeals from the district court's1

 summary

judgment order awarding Roger Bannister $81,051.36 based on Bemis's breach of a

Confidentiality and Non-Competitive Agreement. Having carefully reviewed the

record, we affirm.
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I.

Roger Bannister was the Director of Technical and Product Development for

Bemis, where he had worked since 1991. Bannister entered into a Confidentiality and

Non-Competitive Agreement (NCA) with Bemis in December 2000, which, among

other things, prohibited Bannister from working for a Bemis competitor for 18 months

following the termination of his employment. In the event that Bannister's

employment ended with Bemis and he was "unable to obtain employment consistent

with [his] abilities and education solely because of the provisions of paragraph c. [of

the NCA which prohibited his employment with a "Conflicting Organization"], such

provisions . . . continue[d] to bind [him] only as long as Bemis, in its sole discretion,

. . . ma[d]e payments to [him] equal to [his] monthly base salary at the time of [his]

termination . . . ." (Appellant's Add. at 15, NCA ¶ d.) Paragraph d. of the NCA

further required Bannister to provide Bemis with a detailed written account of his

"good faith and aggressive effort[s]" to obtain employment as well as a sworn

statement that although he had made a good faith and aggressive job search, the NCA

was the sole reason for his unemployment. For any month in which Bannister failed

to provide the required documentation, Bemis was relieved of making the monthly

payment.

In March 2004, Bannister requested that Bemis release him from the

noncompetition provisions of the NCA so that he could accept a position with Mondi

Packaging (Mondi), one of Bemis's competitors, but Bemis refused to release

Bannister. Around the same time, Bemis filed suit against Mondi and two former

Bemis employees who had accepted positions with Mondi alleging the

misappropriation of trade secrets and the disclosure of confidential information.

Mondi and Bemis eventually settled the lawsuit and entered into an agreement in

October 2004 under which Mondi agreed, for a period of 18 months from the date of

the settlement agreement, not to hire any Bemis employees who were then or who

became subject to a noncompetition agreement. In December 2004, Bemis offered
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Bannister a severance package of $40,000 and a release from the noncompetition

provisions of the NCA except as it related to Mondi. This time, Bannister declined.

Bemis terminated Bannister's employment on January 14, 2005.

On February 17, 2005, Bannister's counsel sent a letter to Bemis requesting

payment of his monthly salary under the NCA because he was unemployed due solely

to the noncompetition provisions of the NCA, attaching a February 7, 2005, letter he

had received from Mondi, which informed him that Mondi "would like to extend an

offer of employment to [him]" but could not because it was Mondi's understanding

that Bannister was subject to a noncompetition agreement with Bemis as of October

8, 2004. (Appellant's App. at 91.) Bannister received no response from Bemis, and

on March 31, 2005, Bannister sent a job contacts log to Bemis that detailed his job

search through March 2005. He again requested that Bemis start paying his monthly

salary under the NCA. 

Bemis's counsel responded with a letter on April 14, 2005, in which it stated

that "[w]ith respect to [Mondi], Bemis is simply not inclined to meet your request as

[Mondi] has a separate agreement with Bemis Company in which it will not and

cannot offer employment to anyone who was subject to a [NCA] at the time that

agreement became effective." (Appellant's Add. at 18.) The letter continued, stating

that "Bemis did and does release Mr. Bannister from paragraph d of the

noncompetition portion of his Confidentiality and Noncompetitive Agreement as it

relates to all other companies other than [Mondi]." (Id. at 19 (emphasis added).)

Bannister responded by letter on April 25, 2005, that the April 14 Bemis

correspondence was the first notice of his release to pursue employment with any

competitor other than Mondi and that he considered the release a partial release

because of the Mondi exception. Bemis then confirmed in a letter dated April 27,

2005, that Bannister could accept "employment with any company other than

[Mondi,]" and reiterated its position that there were no damages due under the NCA

"based on the fact that Mr. Bannister has been released to seek employment with any
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company other than [Mondi]," noting that even if Bannister had been released to seek

employment with Mondi, Mondi could not hire him because of the Bemis/Mondi

settlement agreement. (Appellee's App. at 12-13.) 

Bannister accepted a position with Bancroft Bag, Inc., a Bemis competitor, on

October 24, 2005. He brought this breach of contract claim against Bemis for its

failure to pay his monthly salary under the NCA for the nine-month period of January

through October 2005. Both parties moved for summary judgment. The district court

found the NCA to be unambiguous and granted summary judgment to Bannister,

awarding him $81,051.36, which represented his salary for the entire nine-month

period that he was unemployed. Bemis appeals.

II.

We review the district court's summary judgment order and its interpretation of

state law de novo, applying the same standards applied by the district court. STL 300

N. 4th, LLC v. Value St. Louis Assocs., L.P., 540 F.3d 788, 792 (8th Cir. 2008).

"Summary judgment is appropriate if the record shows no genuine issue of material

fact, entitling the moving party to a judgment as a matter of law." Corn Plus Co-op.

v. Cont'l Cas. Co., 516 F.3d 674, 678 (8th Cir. 2008). We apply Arkansas law to this

diversity contract case based on the contract's choice-of-law clause. " Under Arkansas

law, the determination [of] whether a contract is ambiguous is a question of law" for

the court. Jet Asphalt & Rock Co. v. Angelo Iafrate Constr., LLC, 431 F.3d 613, 616

(8th Cir. 2005).

We agree with the district court that the provisions of the NCA are clear and

unambiguous. The NCA unambiguously provides that Bemis had the sole discretion

to determine whether to enforce the noncompetition covenants by choosing to pay or

not to pay Bannister his monthly salary. If Bemis chose to enforce the provisions,

Bannister could not accept employment with a Bemis competitor, and he was required
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In fact, Bemis had no power to exert over Bannister based on the Mondi

settlement itself. If Mondi chose to hire Bannister in violation of the settlement

agreement, Bemis's recourse would have been against Mondi, the party to the

settlement agreement, not Bannister, a nonparty, as Bemis acknowledged during oral

argument. 

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to provide Bemis with a detailed written account of his efforts to locate employment

along with a sworn statement that he was unemployed solely because of the NCA

before he was entitled to receive his base monthly salary. The corollary to Bemis's

discretion as to whether to enforce the noncompetition provisions is that if Bemis did

choose to enforce the provisions, then Bemis was required to pay Bannister his

monthly salary as long as Bannister met the prerequisites contained in the NCA. 

The underlying facts are not in dispute; it is only the operative effect of those

facts on the NCA about which the parties disagree. It is clear from the language of the

correspondence between Bemis and Bannister that Bemis did not grant Bannister a

full release from the noncompetition provisions of the NCA. Bemis stated in its April

14 letter that it "did and does release Mr. Bannister from paragraph d . . . as it relates

to all other companies other than [Mondi]" (Appellant's Add. at 19 (emphasis added)),

and it reiterated in its April 27 letter that "Mr. Bannister has been released to seek

employment with any company other than [Mondi]" (Appellee's App. at 12).

Although Bemis raised the settlement agreement with Mondi in its attempt to preclude

Bannister from accepting employment with Mondi,2

 Bemis explicitly asserted its

rights under the NCA when it told Bannister that he was not released from the NCA

as it related to Mondi. To the extent that the Mondi settlement is relevant, the only

reason it prevented Mondi from hiring Bannister is because of Bannister's NCA with

Bemis. Thus, even considering the settlement agreement, the NCA was still the sole

cause of Bannister's inability to be hired by Mondi. Because the NCA does not

provide for a partial release, once Bannister provided the required documentation and

sought payment from Bemis under the NCA and Bemis chose to enforce the NCA as

it related to Mondi, Bemis was obligated to pay Bannister his monthly salary. 
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We reject Bemis's attempt to rely on Bannister's alleged failure to meet the

conditions precedent before being entitled to his monthly salary under the NCA.

Bannister informed Bemis on February 17, 2005, that he would be employed by

Mondi but for the NCA, and he demanded payment of his monthly salary under the

NCA. Bannister then forwarded the required documentation on March 31 concerning

his job search, as well as the affidavit required by the NCA stating that he was

unemployed due solely to the NCA. Bannister requested that Bemis identify any

deficiencies it found in the submitted documentation. Bemis responded on April 14

that "[w]ith respect to [Mondi], [it] simply was not inclined to meet [Bannister's]

request," (Appellant's Add. at 18), and informed Bannister that he was released from

the NCA as to all other employers. Bemis reiterated on April 27 that it was refusing

to pay Bannister under the NCA because it had released Bannister "to seek

employment with any company other than [Mondi]," (Appellee's App. at 12), not

because Bemis found Bannister's submitted documents inadequate. The NCA

required Bannister to "give Bemis a detailed written account of [his] efforts to obtain

employment and . . . a sworn statement by [him] that although [he] conscientiously

sought employment and made a good faith and aggressive effort to obtain employment

consistent with [his] abilities and education, [he] was unable to obtain it solely

because of the provisions" of the NCA. (Appellant's Add. at 15.) Bannister provided

the required documentation: a detailed written account and an affidavit with the

required statements. Bannister met the conditions precedent contained in the NCA.

We also reject Bemis's argument that Bannister is entitled at most to only one

month's salary because he met the monthly conditions precedent required by the NCA

on only one occasion. After Bannister provided the required documentation, Bemis

informed him of its position that he was "not entitled to any payments under the

agreement" based on its assertion that Bannister had been released from the NCA.

(Appellee's App. at 12.) Bemis failed to perform under the NCA when it elected to

enforce the noncompetition provisions at least as to Mondi but refused to pay

Bannister under the NCA after he submitted the required documentation. Under
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Arkansas law, "the failure of one party to perform its contractual obligations releases

the other party from its obligations. The party who first breaches a contract is in no

position to take advantage of a later breach by the other party." Stocker v. Hall, 602

S.W.2d 662, 664-65 (Ark. 1980) (internal citations omitted); see also Restatement

(Second) of Contracts § 237 (1981) ("[I]t is a condition of each party's remaining

duties to render performances to be exchanged under an exchange of promises that

there be no uncured material failure by the other party to render any such performance

due at an earlier time."). Just as a builder who contracts to build a house in exchange

for installment payments is excused from further construction as long as the buyer

fails to make an installment payment, see Restatement (Second) of Contracts § 237,

cmt. a, illus. 1, Bannister was not required to continue to submit monthly

documentation of his job search as long as Bemis refused to pay him under the NCA.

Finally, we agree with the district court that Bannister was entitled to damages

for the entire nine-month period that he was unemployed. Bannister originally made

demand for payment of his monthly salary on February 17, one month after his

termination, and he provided the required documentation for the period beginning

with the date of his unemployment. Thus, Bemis's duty to pay Bannister his monthly

salary, once it elected to enforce the NCA, dates to his termination date. As for the

period after Bemis's breach of the NCA, Bannister was entitled to the benefit of his

bargain by being put in as good a position as he would have been in had Bemis

performed the contract. See Pennington v. Rhodes, 929 S.W.2d 169, 174 (Ark. Ct.

App. 1996) ("[T]he underlying purpose in awarding damages for breach of contract

is to place the injured party in as good a position as he would have been had the

contract been performed."); Restatement (Second) of Contracts § 347(a) & cmt. a

("Contract damages . . . are intended to give [the injured party] the benefit of his

bargain by awarding him a sum of money that will, to the extent possible, put him in

as good a position as he would have been in had the contract been performed."). If

Bemis had performed its contract, it would have paid Bannister his monthly salary for

up to 18 months, as long as he was unemployed due solely to the NCA. Bannister
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continued to seek employment consistent with Bemis's insistence that he could accept

a position with anyone except Mondi, and he documented his job search efforts.

Although Bemis's breach relieved Bannister of his obligation to meet the monthly

documentation conditions required by the NCA, he was still obligated to attempt to

mitigate his damages. See Marshall Sch. Dist. v. Hill, 939 S.W.2d 319, 322 (Ark. Ct.

App. 1997) ("Mr. Hill had a duty to take reasonable steps to mitigate the damages, and

he did so by seeking and finding other employment."). Bannister's efforts toward, and

eventual success at, securing employment satisfied his obligation to mitigate his

damages, and the district court appropriately awarded him damages for the ninemonth period during which he was unemployed. 

III.

Bemis breached the unambiguous NCA when it chose to enforce the

noncompetition provisions as they related to Mondi but refused to pay Bannister's

monthly salary, and the district court appropriately awarded Bannister damages under

the contract for the period he was unemployed. The district court's judgment is

affirmed.

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