United States Court of Appeals

For the Eighth Circuit

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No. 19-2011

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Travelex Insurance Services, Inc., a Delaware Corporation,

lllllllllllllllllllllPlaintiff - Appellant,

v.

Lynn Barty,

lllllllllllllllllllllDefendant - Appellee.

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Appeal from United States District Court 

for the District of Nebraska - Omaha

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 Submitted: May 13, 2020

Filed: August 17, 2020 

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Before COLLOTON and BENTON, Circuit Judges, and WILLIAMS,1

 District Judge.

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COLLOTON, Circuit Judge.

Travelex Insurance Services, Inc. (Travelex), sued Lynn Barty to enforce an

alleged agreement restricting her ability to compete with Travelex by soliciting

1The Honorable C.J. Williams, United States District Judge for the Northern

District of Iowa, sitting by designation. 
business from certain customers. The district court determined that the purported

agreement was unenforceable and granted partial summary judgment for Barty. We

conclude that summary judgment was not warranted, and we therefore reverse and

remand for further proceedings. 

Barty began to work as a regional account manager in New York for Travelex

in January 2008. As a condition of employment, Travelex’s parent corporation,

Travelex America, Inc., required employees to sign a confidentiality and nonsolicitation agreement. The non-solicitation agreement provided that employees must

refrain from “directly or indirectly providing or soliciting to provide products or

services,” in competition with Travelex America, to certain customers for one year

after termination of employment. The agreement applied “to any existing customer

or prospective customer of [Travelex America] with whom [the employee] had

personal contact and provided (or participated in a proposal to provide) products or

services during the two-year period prior to termination of employment.”

There is a dispute about whether Barty signed the agreement. Barty denies that

she did so. Travelex asserts that Barty signed the agreement but says that the

document was lost. Travelex’s vice president of human resources, Mary Jo Gray,

testified that she knows there was a signed agreement with Barty, because she faxed

a signed copy to Barty at her request in March 2008. 

In 2016, Travelex was acquired by Cover-More Group. After the sale,

Travelex required all employees to sign a revised confidentiality and non-solicitation

agreement as a condition of continued employment. Barty declined to sign the new

agreement, and Travelex terminated her employment for that reason in May 2017. 

Barty then began to work for a competitor of Travelex, and Travelex alleges that she

engaged in conduct that violated the 2008 non-solicitation agreement. 

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Travelex sued Barty in Nebraska state court, alleging breach of contract and

several other claims. Barty removed the case to federal court and moved for summary

judgment on the breach of contract claim. 

The district court granted Barty’s motion. The court determined that whether

or not Barty signed the 2008 agreement, she was entitled to summary judgment. The

court reasoned that any 2008 agreement was nullified because the agreement lacked

mutuality of obligation once Travelex terminated Barty in 2017 for refusing to sign

the new non-solicitation agreement. Travelex then agreed to dismiss its other claims

with prejudice, and it appeals the district court’s order. We review the decision de

novo. Summary judgment is appropriate where a movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(a). 

The district court assumed for the sake of analysis that Barty signed the 2008

non-solicitation agreement, and we do the same. Although Travelex could not

produce a signed copy, there is a genuine dispute of fact about whether Barty signed

the agreement. Travelex produced an unsigned copy of the standard confidentiality

and non-solicitation agreement bearing Barty’s name. Gray, the vice president of

human resources, testified that she remembered seeing Barty’s signature on a nonsolicitation agreement when she faxed a copy to Barty in March 2008. Gray’s

testimony is corroborated by a March 2008 e-mail from Barty to Gray asking for the

non-compete portion of her employment agreement, and a contemporaneous fax cover

sheet addressed from Gray to Barty with the subject line “Signed NS.” This evidence

is sufficient to support a finding by a reasonable jury that Barty signed the agreement.

Assuming that Barty signed the non-solicitation agreement, we apply New

York law to the remaining issues on appeal. The standard agreement provides that

the agreement will “be interpreted and enforced in accordance with the law of the

State of New York.” R. Doc. 56-10, at 2. The law of the forum state, Nebraska,

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generally gives effect to contractual choice-of-law provisions, DCS Sanitation Mgmt.,

Inc. v. Castillo, 435 F.3d 892, 895 (8th Cir. 2006), and the narrow exceptions to that

rule do not apply. New York has a substantial relationship to the parties, and even

if Nebraska were judged to have a materially greater interest in this particular dispute,

it has no fundamental policy that would contravene the parties’ choice of law. See

id. at 896.

The district court concluded that even if Barty signed the 2008 agreement, it

became “a nullity at the time of the acquisition of Travelex by Cover-More,” because

the “2016 agreement was effectively an offer of continued employment by a different

entity.” The court thought the “mutuality of obligation on which the 2008 covenant

rested—the quid-pro-quo that Travelex would continue to employ the employee if the

employee covenanted not to compete—was destroyed by the employer’s offer of a

new contract of employment, conditioned on different terms.”

We disagree that the Cover-More acquisition and the demand that Barty sign

a new agreement in 2016 nullified the 2008 agreement if it existed. The parties did

not reach a new agreement in 2016, so there was no new contract that could have

superseded a former agreement. That Travelex terminated Barty when she declined

to sign a new non-solicitation agreement did not eliminate the “mutuality of

obligation” on which the 2008 agreement rested. Under the purported 2008

agreement, Barty’s promise not to solicit competitors was exchanged for employment

by Travelex. Under New York law, continued employment for a “substantial period”

of time is sufficient consideration to support a non-compete agreement. See Zellner

v. Stephen D. Conrad, M.D., P.C., 589 N.Y.S.2d 903, 907 (N.Y. App. Div. 1992). 

Travelex employed Barty for approximately nine years after she allegedly entered into

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the 2008 agreement, so there was sufficient consideration to bind Barty to her

obligation under the 2008 contract even though she was terminated in 2017.2

Barty argues that we should affirm the judgment on an alternative ground,

namely, that New York law does not allow enforcement of restrictive covenants on

employment when an employee is dismissed without cause. Citing Post v. Merrill

Lynch, Pierce, Fenner & Smith, Inc., 397 N.E.2d 358 (N.Y. 1979), Barty argues that

termination without cause “destroys the mutuality of obligation” on which a noncompete agreement rests. Id. at 361. Post held that where an employer involuntarily

terminated an employee, the firm could not enforce a provision in its pension plan

that allowed the firm to forfeit the employee’s post-employment pension benefits

when the former employee competed with the firm. The court explained that the

employer’s continued willingness to offer employment was an essential aspect of the

pension agreement, so the employer could not involuntarily terminate the employee

and forfeit the pension rights. Such a forfeiture was “unreasonable as a matter of

law.” Id. at 361.

We may assume for the sake of analysis that Travelex terminated Barty without

cause in 2017, although Travelex disputes the point. Even with that assumption, Post

does not establish a per se rule against enforcement of non-solicitation agreements

when an employee is terminated without cause. Hall v. Edgewood Partners Ins. Ctr.,

2The record includes an unsigned copy of a non-solicitation agreement between

Travelex America and Barty. There is testimony that Travelex America was a parent

corporation of Travelex Insurance Services, and that Travelex America later sold the

Travelex Insurance Services division to Cover-More. The unsigned agreement

provides that it will be binding on, and enure to the benefit of, “heirs, representatives,

successors, and assigns” of Travelex America. At oral argument, Barty questioned

whether Travelex could benefit from an agreement between Barty and Travelex

America, but the record is not further developed on the relationship among the

corporate entities, and Barty did not raise this issue in the district court or in her brief

on appeal. We therefore do not address the question at this time.

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Inc., 878 F.3d 524, 529 (6th Cir. 2017). The question here is not whether Travelex

may deprive Barty of previously earned post-employment benefits, as in Post, but

whether it may enforce an agreement forbidding solicitation of customers for one year

after Barty’s termination in exchange for nine years of pre-termination employment.

Assuming that Barty was terminated without cause, the determinative issue

would be whether the non-solicitation agreement is reasonable. The general rule in

New York is that “noncompete clauses in employment contracts are not favored,” but

they will be enforced “to the extent reasonable and necessary to protect valid business

interests.” Morris v. Schroder Capital Mgmt. Int’l, 859 N.E.2d 503, 506 (N.Y. 2006). 

New York courts have recognized that agreements limiting a former employee’s

ability to solicit customers that she serviced or contacted on behalf of the former

employer are reasonable methods for an employer to protect its goodwill. See BDO

Seidman v. Hirshberg, 712 N.E.2d 1220, 1225 (N.Y. 1999); Brown & Brown, Inc. v.

Johnson, 34 N.E.3d 357, 362 (N.Y. 2015). Therefore, the purported 2008 nonsolicitation agreement is not unreasonable as a matter of law, and summary judgment

was not warranted based on New York law governing restrictive covenants on

employment.

Barty next suggests that the 2008 agreement is not enforceable under the

Statute of Frauds because it was not in writing and could not be performed within one

year. See N.Y. Gen. Oblig. Law § 5-701. As discussed, however, there is a genuine

dispute of material fact as to whether Barty signed an agreement, so the Statute of

Frauds does not support summary judgment for Barty.

Barty also contends that the 2008 agreement would be unenforceable under

Nebraska law because it is overly broad and unreasonably restricts her postemployment conduct. Even if we assume that Nebraska law applies, despite the

choice-of-law provision designating New York law, the agreement would not be

unenforceable. The non-solicitation provision is limited to customers with whom

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Barty had personal contact while employed by Travelex, and that sort of restriction

is not unreasonable under Nebraska law. Aon Consulting, Inc. v. Midlands Fin.

Benefits, Inc., 748 N.W.2d 626, 638 (Neb. 2008).

The judgment of the district court is reversed, and the case is remanded for

further proceedings.

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