AutoUpLink Technologies, Inc., Appellant,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0485

AutoUpLink Technologies, Inc.,
Appellant,

vs.

Lynn Clark Janson,
Respondent.

Filed December 4, 2017
Affirmed
Jesson, Judge

Hennepin County District Court
File No. 27-CV-16-14383

Wm. Christopher Penwell, Siegel Brill, P.A., Minneapolis, Minnesota (for appellant)

Michael L. Puklich, Neaton & Puklich, P.L.L.P., Chanhassen, Minnesota (for respondent)

Considered and decided by Jesson, Presiding Judge; Reilly, Judge; and Reyes,
Judge.
U N P U B L I S H E D O P I N I O N
JESSON, Judge
After respondent Lynn Clark Janson was terminated from appellant AutoUpLink
Technologies, Inc. for refusing to accept a pay cut, he took many of his former company’s
clients with him to a new company. AutoUpLink brought this action against Janson to
enforce a noncompete agreement . Because Janson signed that agreement after he had
2
already started employment, the district court denied a request for a temporary injunction
to enforce it. On appeal, AutoUpLink argues that the district court erred by determining
Janson did not receive independent consideration to support the noncompete agreement.
We affirm.
FACTS
Appellant AutoUpLink provides on -the-lot services to car dealerships, wh ich
consists of taking photos, making videos, and applying labels to vehicles. AutoUpLink
also sells software to dealerships, which gives it a competit ive edge over its competitors.
In early June 2006, respondent Lynn Clark Janson met with AutoUpLink co-founders
Bruce McHoul and Mike Baker in Las Vegas. They offered him a job that included a base
salary and a commission, with the intended goal that he build a market for the company in
Michigan. AutoUpLink did not give Janson any written terms for the po sition. And
AutoUpLink did not mention a noncompete clause at this meeting. Janson did not accept
the offer at the time, but he did a few days later over the phone.
On July 23, 2006, Janson travelled to AutoUpLink’s headquarters in Charlotte,
North Carolina, to begin training for his new job . On his first day, Janson learned the
basics of AutoUpLink’s products and software, as well as some job responsibilities, such
as taking pictures for car dealerships. On July 24, Janson’s training continued as he toured
an AutoUpLink facility.
On the night of July 24, Janson visited co-founder McHoul at his home. Seated
together at the dining room table, McHoul asked Janson to sign an employment agreement.
This agreement included a base pay of $3,500 a month and 12% commission on monthly
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revenue that exceeded $5,500. These terms were similar to what was discussed previously
in Las Vegas, but there were several benefits that AutoUpLink had not mentioned before,
including a 401K plan, a computer allowance, a mobile phone, and internet reimbursement.
This was the first time Janson was told about the 401K plan. Janson testified that he
recognized that the 401K plan could b e a valued benefit, although it was not very
significant to him at the time he started work at AutoUpLink and he did not participate in
it for several years.
The employment agreement also contained restrictive covenants that AutoUpLink
had not previously discussed with Janson. This included a noncompete clause. 1 The
noncompete clause stated, in part:
Employee will not, directly or indirectly, individually or as an
employee, director, officer, partner, consultant, financier, or
shareholder o f any other person, partnership, associate,
corporation or entity do any of the following:

a. provide services which compete with thos e offered by
the Company or its agents; by way of example, without
limiting the forgoing, services offered by the Company
or its agents shall inc lude acquisition data services,
window sticker and inventory publishing applications in
the automobile industry;

b. become employed by, solicit the busi ness of or do
business with any licensee or customer of the Company,
including dealers located within the District who have
utilized the services of the Company during the term of
this Agreement (“District Dealers”), unles s such

1 The employment agreement also contained a nondisclosure of confidential information
clause. While this was part of the original temporary restraining order and AutoUpLink
argued for its enforcement at the evidentiary hearing for the temporary injunction, this was
not specifically argued on appeal and is forfeited. See Melina v. Chaplin, 327 N.W.2d 19,
20 (Minn. 1982) (stating arguments not adequately briefed are forfeited).
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employment, solicitation or business concerns a
business not in competition with that of
[AutoUpLink]. . . .

Employee acknowledges that this non -competition agreement
is an absolute prerequisite to employment with the Company.
Employee also recognizes tha t the foregoing limitations are
reasonable and properly required for the adequate protection of
the Company’s business.

Janson did not ask for time to read the agreement in detail, and he signed it.
After his training ended, Janson performed on -the-lot services and started finding
new customers and developing the Michigan market. Within a few months, he had enough
customers that AutoUpLink hired a new employee to perform on -the-lot services, and
Janson focused solely on developing the market. Throughout his employment,
AutoUpLink continued to hire employees for Michigan, but Janson was the highest-level
employee in the state, and he directly brought in the vast majority of AutoUpLink’s
Michigan customers. AutoUpLink’s Michigan business blossomed under Janson’s
guidance. In 2008, AutoUpLink increased Janson’s base salary from $3,500 to $3,850 a
month. Janson attributed the increase to his hard work and the company’s quick growth.
Because he received commissions, Janson’s income increased dramatically as the
Michigan market grew. His commissions increased fr om approximately $3,000 in 2007 ,
to $15,500 in 2008, and to over $90,000 in 2015.
In April 2016, AutoUpLink proposed to change Janson’s compensation structure ,
providing a new monthly salary of $9,500 a month, but taking away any commissions.
This would have lowered Janson’s income significantly. And the new terms proposed to
extend the length of the noncompete agreement from one year to two years. The discussion
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of the extension of the noncompete clause was the first time Janson and AutoUpLink
actually discussed a noncompete clause. Janson refused to sign the agreement, and later
that month, he was terminated.
In August 2016, Janson’s wife started Rush Marketing, a business similar to
AutoUpLink, located in Michigan. Janson started working for Rush Marketing after it was
formed, as did three other former AutoUpLink employees. With a few exceptions, Rush
Marketing’s customers were AutoUpLink’s customers at the time Janson left AutoUpLink.
The loss of customers resulted in a decrease of approximately $ 200,000 in AutoUpLink’s
revenue.
In September 2016, AutoUpLink filed a lawsuit against Janson alleging breach of
the noncompete clause of the employment contract . Janson filed several counterclaims,
alleging in part that AutoUpLink breached the contract first and therefore cannot enforce
it. AutoUpLink filed a motion for a temporary restraining order, and it was granted in
October 2016. AutoUpLink filed a motion for a temporary injunction to keep in place the
terms of the temporar y restraining order, and in November 2016, a n evidentiary hearing
was held. At the hearing, Janson and AutoUpLink’s CEO, Christian Thornton, testified.
Janson testified that he did not receive any benefit during the course of his employment
that he did not anticipate when he accepted the position.
After the evidentiary hearing, the district court denied AutoUpLink’s motion for the
temporary injunction. The district court held, after weighing the Dahlberg factors, that the
likelihood-to-prevail factor was at the heart of the dispute and that, because the
employment contract containing the noncompete clause was given to Janson after he
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started employment, the noncompete clause required independent consideration. 2 See
Dahlberg Bros. v. Ford Motor Co. , 27 2 Minn. 264, 274 -75, 137 N.W.2d 314, 321 -22
(1965) (setting forth the five factors to be considered for granting temporary injunctions).
But because Janson never received unanticipated additional benefits during his
employment, the district court found no independent consideration to support the
noncompete clause. Given that the noncompete clause was unenforceable, the district court
denied the temporary injunction. This appeal follows.
D E C I S I O N
AutoUpLink argues that , because the noncompete clause was supported by
independent consideration, the district court erred by denying its motion for a temporary
injunction. This court reviews the denial of temporary injunctions for abuse of discretion,
and the district court’s findings are not set aside unless clearly erroneous. Softchoice, Inc.
v. Schmidt, 763 N.W.2d 660, 666 (Minn. App. 2009) (reviewing the district court’s denial
of a temporary injunction to enforce a noncompete clause for abuse of discretion) . There
are five factors in determining whether to issue a temporary injunction: (1) the relationship
between the parties preexisting the dispute; (2) the harm to be suffered by the parties

2 The court also weighed the other four factors. The court weighed the parties’ relationship
factor in favor of Janson, as AutoUpLink was the dominant party who had the barga ining
power. For the potential -of-harm factor, the court determined that AutoUpLink would
suffer harm if the injunction was denied , and Janson would suffer harm if the injunction
was granted. The court however weighed the factor “slightly” in favor of AutoUpLink,
taking into account the large amount of money it lost and will conti nue to lose to Rush
Marketing. The court weighed the public-policy factor in favor of Janson as noncompete
clauses interfere with trade and one’s ability to make a living. Lastly, the court held any
administrative burden effects were de minimus.
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depending on the outcome of the injunction decision; (3) the likelihood that one party or
the other will prevail on the merits; (4) public policy; and (5) the administrative burdens in
supervising and enforcing the injunction. Dahlberg Bros ., 272 Minn. at 274–75, 137
N.W.2d at 321–22. Of these factors, the most important to the analysis is the likelihood of
prevailing on the merits. Softchoice, Inc. , 763 N.W.2d at 666. It is this likelihood-to-
prevail factor that the parties dispute on appeal and is the focus of our review.3
Noncompete clauses entered into at the start of employmen t do not require any
independent consideration. Overholt Crop Ins. Serv. Co. v. Bredeson , 437 N.W.2d 698,
702 (Minn. App. 1989). At oral argument, AutoUpLink conceded that the employment
agreement was entered into after the start of employment. 4 If a noncompete clause is not
ancillary to the initial oral employment contract, it must be supported by independent
consideration. Nat’l Recruiters, Inc. v. Cashman, 323 N.W.2d 736, 740 (Minn. 1982). The
adequacy of consideration is a fact -dependent analysis. Davies & Davies Agency, Inc. v.
Davies, 298 N.W.2d 127, 130 (Minn. 1980). AutoUpLink contends it provided Janson
independent consideration in three ways: (1) AutoUpLink provided benefits that Janson
first learned about when he signed the written contra ct, including a 401k plan, computer
allowance, and mobile phone and internet reimbursements ; (2) AutoUpLink provided

3 The parties do not dispute the district court’s weighing of the other four factors.
Furthermore, the record sufficiently supports the district court’s determination regarding
these factors.

4 AutoUpLink argued in its brief that the noncompete clause was entered into at the
inception of Janson’s employment because he had only started training —not actual job
duties—before signing the employment contract containing the noncompete agreement.
8
Janson continued employment at the company , with both increased pay and
responsibilities; and (3) even if the first two reasons are not eno ugh to support sufficient
consideration alone, then cumulatively they are sufficient. We address each argument in
turn.
AutoUpLink first directs us to the benefits Janson learned about when he signed
the written agreement: a 401k plan; computer allowance; and mobile phone and internet
reimbursements. While a 401K plan and other benefits could potentially serve as
consideration, it was not an abuse of discretion to determine that they do not meet the legal
threshold here. There is no independent consideration unless the benefits received go
beyond what was already obtained in the initial employment agreement. Sanborn Mfg. Co.
v. Currie, 500 N.W.2d 161, 164 (Minn. App. 1993). And Janson explicitly testified that
he did not ever receive anything that he did not anticipate when he accepted the position.
The district court credited this testimony , and we defer to its credibility determinations.
See Pechovnik v. Pechovnik , 765 N.W.2d 94, 99 (Minn. App. 2009) (“the district court
found respondent’s testimony credible. We defer to this credibility determination.”).
Further, t here is no evidence in the record suggesting any of the benefits listed in the
contract were more generous than expected in the industry, or in any other way atypical or
unexpected. In deed, details about the scope of these benefits are scarce. For example,
AutoUpLink emphasized the importance of the 401K, but the details of the 401K plan are
confined to one paragraph attached to the employment agreement. The plan itself is not in
the record . The record supports the determination that Janson would expect , from the
moment he was offered a job, to be able to participate in any benefits AutoUpLink offered.
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As a result, the district court acted within its discretion in determining that the employment
benefits do not provide independent consideration for the noncompete agreement.
The district court’s thoughtful decision in this regard accords with precedent. In
Nat’l Recruiters, Inc. , the employee s were orally offered a job and were never told they
would need to sign a noncompete clause. 323 N.W.2d at 738-39. Two days after reporting
to work, but before any meaningful training occurred, the employees were presented a
contract containing a noncompete clause. Id. This contract stated training would serve as
the consideration. Id. at 741. But training was not sufficient consideration, the court held,
as it was expected based on the oral employment agreement. Id. Like training, a benefits
package is generally expected in an employment agreement, particularly for employees in
Janson’s higher-ranking position. Consequently, it was not an abuse of discretion for the
district court to determine that the specific benefits Janson first learned about at the time
he signed the employment agreement were not sufficient to serve as independent
consideration.
Second, AutoUpLink argues that it provided consideration to Janson in the form of
continued employment . But continued employment, without more, does not cons titute
consideration. See Sanborn Mfg. Co. , 500 N.W.2d at 164 (stating proof of continued
employment is not enough to show sufficient consideration for a noncompete agreement).
AutoUpLink points to Janson’s increased pay and responsibilities as the “more” it
provided. We disagree. While Janson’s pay certainly increased, the formula that drove the
increases (including the 12% commission rate) remained essentially static. And Janson did
not receive a promotion. As we held in Sanborn Mfg. Co. , continued e mployment with
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raises and increased responsibilities, but no promotion, generally is not sufficient to serve
as consideration. Id.5
AutoUpLink contends that Satellite Indus., Inc. v. Keeling, not Sanborn Mfg. Co.,
should guide this decision. Satellite Indus., Inc. v. Keeling, 396 N.W.2d 635 (Minn. App.
1986), review denied (Minn. Jan. 21, 1987) . In Satellite Indus., we held that continued
employment of 11 years with promotions, training, and the ability to gain substantial
knowledge in a specific field constituted independent consideration. Id. at 639. But the
defendant there received a promotion, while in this case Janson only received increased
pay and responsibilities, which Janson testified was not due to the noncompete clause.
Under these facts, it was not an abuse of discretion for the district court to determine that
continued employment with increased pay and responsibilities was insufficient to serve as
independent consideration here.
Third, AutoUpLink argues that, if neither continued employment with increased pay
and responsibilities nor the employee benefits are sufficient on their own to constitute
independent consideration, then , taken cumulatively, they are sufficient. We reject this
argument. There is nothing in the re cord that would suggest any of the benefits were
unexpected at the time Janson accepted the employment offer. The district court concluded

5 AutoUpLink contends Davies & Davies Agency, Inc. supports its argument that the
continued employment present here is sufficient to serve as consideration. There, the court
held that mere continuation of employment could serve as consideration when it leads to
benefits only available through the signing of a noncompete agreement. See Davies &
Davies Agency, Inc., 298 N.W.2d at 130-31. But here there is no evidence suggesting that
Janson’s continued employment with increased pay and responsibilities would not have
been available to him unless he signed the noncompete agreement. Therefore, Davies &
Davies Agency, Inc. is distinguished from the facts here.
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that Janson never received a benefit he did not expect , which is supported by the record .
Janson’s base pay remained in the same range throughout his decade of employment. And
Janson’s bonus formula remained exactly the same. We acknowledge that the significant
growth in compensation and dramatic expansion of duties , in addition to benefits first
mentioned in the context of the noncompete clause, could in some circumstances provide
adequate consideration. But we review for an abuse of discretion and are limited to the
evidence produced at the hearing. Based on the evidence presented, the district court
appropriately exercised its wide discretion to determine that these benefits and continued
employment could not serve as independent consideration.
Affirmed.