NOT RECOMMENDED FOR PUBLICATION

File Name: 19a0011n.06

No. 18-1118

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

KELLY SERVICES, INC.,

Plaintiff-Appellee,

v.

DALE DE STENO; JONATHAN PERSICO; 

NATHAN PETERS,

Defendants-Appellants.

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE EASTERN 

DISTRICT OF MICHIGAN

BEFORE: BATCHELDER, GIBBONS, and ROGERS, Circuit Judges

ROGERS, Circuit Judge. Defendants signed one-year noncompete agreements with their 

employer, plaintiff Kelly Services, and later left Kelly’s employ to join one of Kelly’s competitors. 

Kelly sued, and obtained preliminary injunctive relief that lasted long enough to prevent 

defendants from working for the competitor for the duration of their noncompete clauses. The 

only remaining relief sought by Kelly was attorneys’ fees, which the district court awarded 

pursuant to provisions in the noncompete agreements. Defendants appeal the attorneys’ fee award, 

arguing that they did not violate their contractual noncompete obligations in the first place, and 

that the contractual attorneys’ fees in any event could not be awarded without a jury trial under the 

Seventh Amendment. Neither argument, however, precludes the award of attorneys’ fees in this 

case.
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I

Defendants were employees of a division of Kelly Services, a staffing and consulting 

company, in Minneapolis. They each signed employment agreements when they were hired. 

Defendant Dale De Steno’s employment agreement contained a noncompete provision, 

under which De Steno agreed that he would “not compete against Kelly . . . for one year after [he] 

leave[s] Kelly in any market area in which [he] worked.” The agreement also contained an 

attorneys’ fees provision:

If I break this Agreement, Kelly is entitled to recover as damages from me the 

greater of the amount of the financial loss which Kelly suffers as a result or the 

amount of the financial gain which I receive. I will pay Kelly’s reasonable 

attorney’s fees and costs involved in enforcing this Agreement.

(Emphasis added.) The agreement contained a choice of law provision selecting Michigan law. 

Defendants Jonathan Persico and Nathan Peters signed similar employment agreements. 

Like De Steno’s, these agreements contained year-long noncompete provisions and attorneys’ fees 

provisions. The attorneys’ fees provisions read as follows:

6. Remedies/Damages. I agree that the Company’s remedies at law for any 

violations of this Agreement are inadequate and that the Company has the right 

to seek injunctive relief in addition to any other remedies available to it. 

Therefore, if I breach this Agreement the Company has the right to, and may 

seek issuance of a court ordered temporary restraining order, preliminary 

injunction and permanent injunction, as well as any and all other remedies and 

damages, including monetary damages. I further agree to pay any and all legal 

fees, including without limitation, all attorneys’ fees, court costs, and any other 

related fees and/or costs incurred by the Company in enforcing this Agreement.

(Emphasis added.) These agreements also contained a Michigan choice of law provision.

In early 2016, defendants accepted offers from a competitor of Kelly’s. According to 

defendants, the offers were “for the same or similar staffing position in the same Minneapolis 

market area.” Kelly sued. Kelly asserted three state law causes of action, including breach of the 

non-competition provisions and a common law claim for breach of duty of loyalty. In its 
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complaint, Kelly alleged that it had suffered “damages” as a result of the two breaches of its 

contracts, including “lost profits and attorneys’ fees.” Defendants removed the case to the federal 

court below, and Kelly moved for a preliminary injunction. The district court held a hearing, and 

on May 2, 2016, entered an order granting Kelly’s motion for a preliminary injunction. 

The district court found first that Kelly had “made an initial demonstration that irreparable 

harm may occur” if no injunction was granted. Next, the court found that the harm to Kelly from 

not issuing an injunction outweighed the harm to defendants. Third, the district court found that 

Kelly had “shown that it would likely prevail on the merits.” The district court wrote:

The Defendants are almost certainly in violation of their non-compete agreements 

with Kelly. The Defendants’ only argument would be that the non-competes are 

void. They have not alleged any fraud or other defect in the signing of the 

agreements, so the Defendants’ only legal option is to contend that the noncompetes are unreasonable. Reasonable non-compete agreements should be 

enforced as a matter of policy. 

The agreements in question had a duration of one year, apply to the markets in 

which the Defendants worked or had responsibility, and forbid the Defendants from 

working in Kelly’s line of business, staffing services . . . . The Defendants have not 

provided compelling authority explaining why the outcome here should not be 

identical [to cases upholding the enforceability of identical agreements.] 

The Defendants are working for staffing companies in the same market they 

serviced for Kelly within weeks, even days, of leaving Kelly. The Court is 

especially troubled by the Defendants’ suggestion that they were working in IT, 

and not engineering, staffing . . . . Kelly has presented unrebutted evidence that at 

least one of the Defendants has solicited for multiple positions in the engineering 

industry. The attempt to argue otherwise would indicate that the Defendants know 

they are violating their non-compete agreements . . . . In sum, because the 

agreements are reasonable, and the Defendants have almost certainly violated them, 

Kelly has demonstrated a likelihood of success on the merits.

(Citations omitted.) Finally, the court found that the public interest was slightly more favorable to 

Kelly. The court enjoined the defendants “from violating their noncompete agreements until the 

dispute is resolved and the Court ends the injunction.” A subsequent more specific order, entered 

on May 29, 2016, broadly prohibited defendants from working for any competitors of Kelly in 
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Minneapolis, and was to last for sixty days, at the end of which Kelly could “request entry of a 

further injunction.” Defendants filed an interlocutory appeal challenging the preliminary 

injunction. 

On July 25, 2016, with the injunction set to expire in three days, Kelly requested a sixtyday extension. On August 30, the court extended the injunction “indefinitely until the Sixth Circuit 

rules on the defendants’ interlocutory appeal.” That ruling never came: Defendants voluntarily 

dismissed the interlocutory appeal a few weeks later, on September 21. Defendants did not move 

the court to withdraw the injunction, and the court did not address the matter on its own. February 

1, 2017 marked the one-year anniversary of defendants’ exit from Kelly. Were it not for the 

indefinitely running preliminary injunction, the defendants would have been free to work for any 

competitor of Kelly under the terms of their agreements after that date. But litigation proceeded,

and neither defendants nor Kelly sought to lift the injunction. Nor did Kelly or the defendants 

move the court to dismiss the proceeding as moot. 

On June 2, 2017, the court entered a “Mediation Order,” retroactively lifting the 

preliminary injunction as of May 29, 2017, one year from its entry. After a failed attempt at 

mediation, the court amended the scheduling order in the case and set the dispositive motions 

deadline for July 29. Both Kelly and the defendants moved for summary judgment. 

In defendants’ motion papers, they contended primarily that the noncompete agreements 

were not enforceable in the first place, and that the district court’s grant of preliminary injunctive 

relief did not amount to a determination of the merits of Kelly’s claims. They also argued that 

under the Seventh Amendment they were entitled to a jury determination of any award of 

contractual attorneys’ fees. Kelly’s motion stated that, by the time it filed for summary judgment,

Kelly had been “granted all of the injunctive relief it sought in its Complaint against defendants 
No. 18-1118, Kelly Servs., Inc. v. De Steno

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and [the] only issue remaining is the amount of attorneys’ fees and costs owed to Kelly by 

defendants.” Kelly’s response to defendants’ motion for summary judgment further contended 

that Kelly had “prevailed” by virtue of having obtained all the injunctive relief it had sought, but 

that: 

Even if Kelly had not prevailed on it[s] claims against Defendants, it would still be 

entitled to its reasonable attorneys’ fees and costs. Defendant De Steno’s 

employment agreement expressly states that he “will pay Kelly’s reasonable 

attorney’s fees and costs involved in enforcing this Agreement.” Likewise, 

Defendants Persico’s and Peters’ employment agreements expressly state they 

“agree to pay any and all legal fees, including without limitation, all attorneys’ fees, 

court costs, and any other related fees and/or costs incurred by the Company in 

enforcing this Agreement.

(Citations omitted.) Defendants did not appear to contest the enforceability of the attorneys’ fees 

provisions in their employment agreements, but contended only that the “reasonableness” of the 

fee should be determined by a jury.

In an opinion and order, the district court, noting that Kelly did not seek further 

enforcement of the non-compete agreements, accepted Kelly’s reasoning and rejected that of the 

defendants. See Kelly Servs., Inc. v. De Steno, Case No. 2:16-cv-10698, 2017 WL 4786105 (E.D. 

Mich. Oct. 24, 2017). The court determined that Kelly was entitled to fees “under a plain reading

of the contracts,” relying on the contractual language quoted above providing for fees “involved 

in enforcing” or “incurred . . . in enforcing” the contracts. Id. at *2. The court rejected each of 

the defendants’ primary arguments because: (1) the operative provisions before the court at that 

point were the covenants to pay attorneys’ fees, not the noncompete clauses, and (2) “a ruling on 

the merits is not required to trigger the attorney’s fees provisions.” With respect to the latter 

holding, the district court reasoned:

The attorney’s fees section is distinct from the noncompete clause, and there is no 

language specifically linking the two. Moreover, the parties did not include 

language requiring Plaintiff to prevail before it was entitled to the fees. 
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Accordingly, a plain reading of the contracts suggests that the parties intended for 

Defendants to pay attorney’s fees if Plaintiff merely sought to enforce the contracts. 

And enforcement is precisely what the lawsuit involves: Plaintiff, albeit not on the 

merits, persuaded the Court to enter an order enjoining Defendants from competing 

for the duration of the noncompete clauses.

Id. at *2. The court accordingly determined that Kelly was contractually entitled to reasonable 

attorneys’ fees, and ordered additional briefing on defendants’ jury-trial issue. Id.

After additional briefing, the court decided that a jury was not required to decide the 

amount of damages. The court reasoned that submitting the issue of the amount of fees to a jury 

would mean that the “trial would then become a trial about the cost of the trial itself, ultimately 

requiring the jury to calculate the cost of each passing minute.” After Kelly and the defendants 

submitted briefing on the reasonable amount of fees to be awarded, the district court determined 

that $72,182.90 was a reasonable fee award, ordered the defendants to pay it, and closed the case. 

Defendants appeal. 

II

Apart from the jury-trial issue, defendants on appeal make essentially the same arguments 

that they made below: that the noncompete agreements were not enforceable under Michigan law;

and that the district court, by making preliminary but not final rulings, did not properly or finally 

rule on the merits of those issues. In doing so, defendants do not squarely address the district 

court’s reasoning that these arguments are beside the point. The district court ruled in effect that 

attorneys’ fees were owed under the contract even if the district court did not determine that the 

noncompete agreements were enforceable. On the procedural facts of this case, the district court 

was correct. 
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A

Given what the defendants agreed to in their employment agreements, the district court 

was correct to conclude that defendants owe Kelly attorneys’ fees. De Steno agreed that he would 

“pay Kelly’s reasonable attorney’s fees and costs involved in enforcing this Agreement.” Persico 

and Peters agreed “to pay any and all legal fees, including . . . all attorneys’ fees . . . incurred by 

the Company in enforcing this Agreement.” Kelly brought an action to enforce the employment 

agreements, the district court granted Kelly’s request for a preliminary injunction, and the 

defendants were prohibited from working for an alleged competitor for one year, the full scope of 

injunctive relief available under the employment agreements. Kelly’s attorneys’ fees in this case 

were, under a plain reading of the contracts, “involved” or “incurred” “in enforcing” these 

agreements, and therefore, under a plain reading of the contracts, Kelly is entitled to have the 

defendants pay those fees. These contracts are governed by Michigan law and Michigan courts 

“will enforce [attorneys’ fees’ provisions] like any other term [in a contract] unless contrary to 

public policy.” Pransky v. Falcon Grp., Inc., 874 N.W.2d 367, 383 (Mich. Ct. App. 2015). As 

with any other term in a contract, courts should look first to the plain language of the contract, and 

if the language is unambiguous it will be enforced “as written . . . . [A]n unambiguous contractual 

provision is reflective of the parties’ intent as a matter of law.” Quality Prods. and Concepts Co. 

v. Nagel Precision, Inc., 666 N.W.2d 251, 259 (Mich. 2003). 

The contracts by their terms do not require a final determination of liability in favor of 

Kelly as a condition for the award of fees. Unlike numerous similar agreements, these contracts 

do not employ the words “prevailing party,” nor by their literal language do they require a final 

determination of liability. In fact, as the district court correctly noted, defendants argued below 
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that these provisions were not prevailing party provisions. De Steno, 2017 WL 4786105, at *2 

n.2.

In reasoning that a final determination of contract breach was not required, the district court 

may have stated too freely that the contract required former employees to pay attorneys’ fees “if 

[Kelly] merely sought to enforce the contracts.” De Steno, 2017 WL 4786105, at *2. One can 

imagine cases where efforts to “seek enforcement” could for instance be unreasonable, made with 

little or no basis, or made for purposes of oppression or harassment, or could be simply 

unsuccessful. A court might read the words “reasonable . . . fees . . . involved in enforcing” and 

“fees . . . incurred . . . in enforcing this Agreement” not to extend to such situations. We do not 

address the possibility of such a limited interpretation, however, because the record is clear that 

none of these situations is present in this case. The district court entered a preliminary injunction 

that resulted in substantial relief, based on a determination that Kelly had shown a strong likelihood 

of success on the merits. Indeed, defendants withdrew their appeal from the grant of that relief. 

None of the imagined oppressive or unreasonable situations has occurred here. The contracts 

accordingly clearly provided for recovery of attorneys’ fees.

B

The remaining issue is whether the district court erred in determining on its own the amount 

of fees owed, instead of giving the question to a jury. The district court’s ruling refusing to 

empanel a jury to hear attorneys’ fees issues did not violate the Seventh Amendment, which 

provides that

In Suits at common law, where the value in controversy shall exceed twenty dollars, 

the right of trial by jury shall be preserved, and no fact tried by a jury, shall be 

otherwise reexamined in any Court of the United States, than according to the rules 

of the common law.
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Defendants argue primarily that they are entitled to a jury determination of the amount of 

attorneys’ fees. This argument lacks merit for the persuasive reasons given by the Second Circuit

in McGuire v. Russell Miller, Inc., 1 F.3d 1306 (2d Cir. 1993). Under the Seventh Amendment, 

parties have a right to a jury only for a determination of “legal,” as opposed to “equitable,” issues, 

Curtis v. Loether, 415 U.S. 189, 193 (1974), and: 

The Supreme Court has held that in determining whether an issue is “legal” or 

“equitable” under the Seventh Amendment, a court should consider, among other 

things, “the practical abilities and limitations of juries.” Ross v. Bernhard, 396 U.S. 

531, 538, 90 S.Ct. 733, 738, 24 L.Ed.2d 729 (1970). To compute a reasonable 

amount of attorneys’ fees in a particular case requires more than simply a report of 

the number of hours spent and the hourly rate. The calculation depends on an 

assessment of whether those statistics are reasonable, based on, among other things, 

the time and labor reasonably required by the case, the skill demanded by the 

novelty or complexity of the issues, the burdensomeness of the fees, the incentive 

effects on future cases, and the fairness to the parties. Such collateral issues do not 

present the kind of common-law questions for which the Seventh Amendment 

preserves a jury trial right. In fact, in Alyeska Pipeline Service Co. v. Wilderness 

Society, 421 U.S. 240 (1975), the Supreme Court refused to extend the American 

Rule that parties pay their own fees absent statutory authorization precisely because 

of the equitable considerations involved in computing a reasonable amount of 

attorneys’ fees.

Accordingly, although plaintiff had the right to a jury decision on whether 

defendants should recover attorneys’ fees, plaintiff did not have the right to a jury 

decision on a reasonable amount of attorneys’ fees. Unlike the client in Simler v. 

Conner, [372 U.S. 221 (1963),] no party here claimed that the contract directed the 

amount of attorneys’ fees to be awarded by specifying a percentage of an 

ascertainable sum. Therefore, the district court, in its equitable role, should have 

determined a reasonable fee.

McGuire, 1 F.3d at 1315. The Second Circuit concluded that “there is no absolute right to have a 

jury determine the amount” of fees, and supported the conclusion with further considerations of 

fairness and efficiency. Id. at 1315-16.

In the instant case it would similarly be highly impractical for a jury to determine the 

amount of attorneys’ fees. As the district court noted below, if these questions were left to juries, 

“[t]he trial would then become a trial about the cost of the trial itself, ultimately requiring the jury 
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to calculate the cost of each passing minute.” Put differently, it “would be impractical to require 

the parties to submit evidence on attorney fees before the end of the trial and resultant necessary 

legal services.” Redshaw Credit Corp. v. Diamond, 686 F. Supp. 674, 676 (E.D. Tenn. 1988). 

Further, the jury would have to “look behind the curtain of the case,” and review, for example, 

pre-trial motions in order to calculate the reasonable amount of time spent litigating the case. 

McGuire, 1 F.3d at 1317 (Jacobs, J., concurring). 

Defendants rely on cases where plaintiffs brought freestanding breach of contract claims 

seeking to recover attorneys’ fees and in which courts determined that the defendants had a right 

to a jury determination of the amount of fees awarded. See J.R. Simplot v. Chevron Pipeline Co., 

563 F.3d 1102, 1116 (10th Cir. 2009); Timken Alcor Aerospace Techs., Inc. v. Alcor Engine Co., 

No 1:06-CV-2539, 2010 WL 2650026 (N.D. Ohio July 2, 2010). In such cases, however, having 

a jury determine the amount of fees would not present the same problems as it would in this case. 

In J.R. Simplot and Timken Alcor, the legal action for which the party sought attorneys’ fees had 

already concluded, and therefore the juries would not have had practical difficulties determining 

the legal cost of the proceeding. Because there would be no practical limitation on the jury’s 

determination of damages in such a case, that determination may present “legal” issues under a 

Seventh Amendment analysis. Indeed, both the Simplot and Timken courts specifically 

distinguished the McGuire holding on the ground that the court in McGuire (like the district court 

below) did not “decide the availability of a jury trial for fees where . . . a claimant seeks contractual 

indemnification for fees incurred in a separate litigation against a third party.” Simplot, 563 F.3d

at 1117; accord Timken Alcor, 2010 WL 2650026, at *2.

When determining whether an issue is “legal” or “equitable” under the Seventh 

Amendment, courts also consider “the pre-merger custom with reference to such questions,” i.e., 
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whether such questions were brought in law or in equity before the Federal Rules did away with 

the distinction. Ross, 396 U.S. at 538 n.10. The impracticability concern is dispositive in this 

case, but “pre-merger custom” also provides some support for considering the calculation and 

award of attorneys’ fees in an underlying action as a matter for the court, and not the jury. See 

Schmidt v. Zazzara, 544 F.2d 412, 414 (9th Cir. 1976); A.G. Becker-Kipnis & Co. v. Letterman 

Commodities, Inc., 553 F. Supp. 118, 122 (N.D. Ill. 1982).

The Seventh Amendment accordingly does not require a jury determination of the amount 

of attorneys’ fees in this case. Although the defendants’ Seventh Amendment argument primarily 

addresses the determination of the amount of fees, their brief at one point appears to argue that the 

underlying issue of whether Kelly has a contractual right to fees should have gone to a jury. 

Appellants’ Br. 26-27. This aspect of their argument is not disposed of by the reasoning in 

McGuire, which assumes that before the court decides the amount of attorneys’ fees, “the jury is 

to decide at trial whether a party may recover such fees.” 1 F.3d at 1313. Here, however, no jury 

was required because summary judgment was proper on that issue.

Regardless of whether an issue is “legal” or “equitable” for Seventh Amendment purposes, 

a judge may grant summary judgment when there is no genuine issue of material fact. “[S]ummary 

judgment does not violate the Seventh Amendment.” Biegas v. Quickway Carriers, Inc., 573 F.3d 

365, 373 n.3 (6th Cir. 2009) (quoting Parklane Hosiery Co. v. Shore, 439 U.S. 322, 336 (1979)). 

As discussed above, summary judgment was proper with respect to whether Kelly was entitled to 

fees in this case, and therefore it was unnecessary to put the question of entitlement to a jury. 
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Apart from the Seventh Amendment challenge, defendants do not contest the 

reasonableness of the awarded amount, and we do not address that issue. 

III

The district court’s judgment awarding fees is affirmed.
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JULIA SMITH GIBBONS, Circuit Judge, concurring. I join the portion of Judge Rogers’ 

opinion relating to defendant’s argument that they were entitled to a jury trial. My reasoning as to 

the other issues in the case differs somewhat from his. 

Kelly Services’ brief does not accurately reflect the procedural history of this case. The 

district court never reached the ultimate merits questions of whether Kelly was entitled to enforce 

its contracts and whether defendants had breached those contracts. A preliminary injunction is not 

a ruling on the ultimate merits of the dispute.

Instead, what happened here is that, after Kelly Services had obtained all the relief it needed 

via preliminary injunction, the district court decided that a decision on the ultimate merits was 

unnecessary. It reasoned, in conclusory fashion, that the contract language did not require breach 

of the agreement to recover attorneys’ fees. Defendants have made no effort to counter this 

interpretation, either in the district court or on appeal.

The district court’s interpretation may be the best interpretation of the language, but it is 

not the only possible interpretation. One might argue that the sentence requires actual enforcement 

of the contract—a circumstance that did not occur here because of the absence of a merits 

determination. Or one might argue that the reference to breach in the prior sentence is intended to 

apply to all remedies, in deciding attorneys’ fees. But defendants made neither of these arguments.

In the district court, defendants argued that they had not breached their employment 

agreements and that the agreements were not enforceable. They also sought a jury trial to 

determine the amount of attorneys’ fees. They did not seem to realize that plaintiff’s argument 

was that plaintiff was entitled to attorneys’ fees simply because it had sought judicial help in 
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enforcing the contracts. On appeal, defendants repeat those same arguments, and never address 

the question of the proper construction of the attorneys’ fee provision.1

Therefore, defendants waived these arguments. When a party appeals the district court’s 

judgment and raises arguments on appeal that were not raised before the district courts, we 

generally consider those arguments waived. Singleton v. Wulff, 428 U.S. 106, 120 (“It is the 

general rule, of course, that a federal appellate court does not consider an issue passed upon 

below.”). Only a narrow exception is available under the Singleton rule—we will consider 

untimely arguments in “exceptional cases” or “when the rule would produce a plain miscarriage 

of justice.” Pinney Dock and Transp. Co. v. Penn Cent. Corp., 838 F.2d 1445, 1461 (6th Cir. 

1998) (citations omitted). This is not an exceptional case. Application of the district court’s ruling 

does not create a plain miscarriage of justice. Defendants therefore waived these arguments.

 

1 Although defendants briefly mentioned “the contract language at issue here,” they did so only within their argument 

for a Seventh Amendment right to a jury trial, rather than in an argument about the proper construction of the contract. 

(CA6 R. 22, Defendants-Appellants Brief, Page ID 33.)