Lukas Tornquist, Respondent,

This opinion will be unpublished and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
A17-1208

Lukas Tornquist,
Respondent,

vs.

Mimedx Group, Inc.,
Relator,

Department of Employment and Economic Development,
Co-Relator.

Filed May 7, 2018
Reversed
Halbrooks, Judge

Department of Employment and Economic Development
File No. 35472662-3

Nicholas G. B. May, David H. Redden, Fabian May & Anderson, PLLP, Minneapolis,
Minnesota (for respondent)

Peter Hennigan, Maslon LLP, Minneapolis, Minnesota; and

Jeffrey N. Williams (pro hac vice), Wargo & French LLP, Los Angeles, California (for
relator MiMedx Group, Inc.)

Lee B. Nelson, Minnesota Department of Emplo yment and Economic Development,
St. Paul, Minnesota (for co-relator department)

Considered and decided by Schellhas, Presiding Judge; Halbrooks, Judge; and
Jesson, Judge.

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U N P U B L I S H E D O P I N I O N
HALBROOKS, Judge
Relators challenge the decision of an unemployment-law judge (ULJ) that
respondent was discharged for reasons other than misconduct and is eligible for
unemployment benefits. Relators argue that respondent’s conduct was serious and was not
conduct that an average reasonable employee would engage in under t he circumstances.
We reverse.
FACTS
Respondent Lukas Tornquist worked as an account executive at relator MiMedx
Group Inc., a biotechnology company that processes and delivers medical applications for
wound care. Tornquist sold medical applications for MiMedx within his assigned territory.
In 2016, Tornquist’s annual compensation, including base salary and commissions,
exceeded $880,000.
When Tornquist began working at MiMedx, he signed a non-solicitation agreement
stating that while employed, he would not “directly or indirectly solicit or attempt to solicit
from any of the Customers with whom Employee had Material Contact . . . any business in
competition with the Business of the Company.” Tornquist also signed a non compete
agreement, stating that he would not se ll competing products or services that were not
provided by MiMedx. MiMedx also had a corporate compliance plan that prevented
employees from maintaining relationships that create a conflict of interest between the
employee and the company.

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On two occasions in 2016 , Tornquist sold a competing wound -care product to a
physician he worked with through his employment at MiMedx. The physician had
informed Tornquist that MiMedx’s product was not effectively healing a patient’s wound
and requested advice on how to proceed. Tornqui st’s direct supervisor advised Tornquist
that a wound-care application product that the supervisor offered through his own personal
business would jumpstart the patient’s healing process. Tornquist twice sold the product
to the physician through his supervisor’s personal business and received a total of $1,162
in commissions.
After discovering that Tornquist sold a competing product, MiMedx terminated
Tornquist’s employment for violating his noncompete agreement, nonsolicitation
agreement, the corporate compliance plan, and his duty of loyalty. Tornquist sought
unemployment benefits and was initially determined to be ineligible because he was
discharged for employment misconduct. Tornquist requested an evidentiary h earing, and
the ULJ reversed the ineligibility determination, concluding that Tornquist was discharged
for reasons other than employment misconduct. MiMedx requested reco nsideration, and
the ULJ affirmed. MiMedx and co-relator Minnesota Department of Employment and
Economic Development (DEED) now appeal.
D E C I S I O N
MiMedx and DEED argue that the ULJ erred as a matter of law in determining that
Tornquist’s sales of a competing product did not amount to employment misconduct under
Minn. Stat. § 268.095, subd. 6 (Supp. 2017). Whether an employee engaged in misconduct
is a mixed question of fact and law. Wilson v. Mortg. Res. Ctr., Inc., 888 N.W.2d 452, 460

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(Minn. 2016). Whether the employee committed the act is a question of fact. Skarhus v.
Davanni’s, Inc. , 72 1 N.W.2d 340, 344 (Minn. App. 2006). W hether a particular act
constitutes disqualifying conduct is a question of law that we review de novo. Wilson, 888
N.W.2d at 460.
An employee discharged for employment misconduct is ineligible for
unemployment benefits. Minn. Stat. § 268.095, subd. 4(1) (2016). “Employment
misconduct means any intentional, negligent, or indifferent conduct, on the job or off the
job that displays clearly: (1) a serious violation of the standards of behavior the employer
has the right to reasonably expect of the employee; or (2) a substantial lack of concern for
the employment.” Id., subd. 6(a). Employment misconduct is not “simple unsatisfactory
conduct” or “conduct an average reasonable employee would have engaged in under the
circumstances.” Id., subd. 6(b)(3), (4). Generally, an employee’s refusal “to abide by an
employer’s reasonable policies and requests amoun ts to disqualifying misconduct. ”
Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 804 (Minn. 2002).
The ULJ determined that, although Tornquist had sold a competing product, he was
not discharged for employment misconduct because his conduct was reasonable under the
circumstances and was n ot serious. MiMedx’s policies prohibited Tornquist from
soliciting MiMe dx’s customers, from selling competing products or services , and from
maintaining relationships that created a conflict of interest with the company. The parties
do not dispute , and the ULJ correctly determined , that Tornquist violated MiMedx’s
policies by selling a competing product.

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An employee may commit misconduct by breaching his duty of loyalty to the
company. Marn v. Fairview Pharmacy Servs. , 756 N.W.2d 117, 121 (Minn. App. 2008),
review denied (Minn. Dec. 16, 2008). An employee’s duty of loyalty prohibits h im from
soliciting his employer’s customers or f rom otherwise competing with his employer.
Rehab. Specialists, Inc. v. Koering, 404 N.W.2d 301, 304 (Minn. App. 1987). An employer
has a legitimate interest in protecting itself against “the deflection of trade or customers by
the employee by means of the opportunity which the employment has given him.” Webb
Publ’g Co. v. Fosshage , 426 N.W.2d 445, 450 (Minn. App. 1988) (qu otation omitted).
Tornquist, a highly compensated sales executive, violated his duty of loyalty to MiMedx
by se lling a competing product to a customer he obtained through the opportunities
provided to him by MiMedx.
The ULJ nevertheless determined that Tornquist was not discharged for
employment misconduct because “an average reasonable employee would have engaged
in [the same conduct] under the circumstances.” The ULJ reasoned that “Tornquist was
trying to do what was best for the patients and followin g the recommendation of his
supervisor. This, despite any obligations to MIMEDX, was reasonable under the
circumstances.” In affirming his earlier order , the ULJ concluded that “it was reasonable
for Tornquist to follow the suggestions of his supervisor when asked by physicians about
alternate treatments. . . . [P]ersonal gain was not Tornquist’s motive.”
MiMedx argues that the ULJ erred because an average reasonable employee would
not have sold a competing product, even at the direction of his supervisor, if he knew that

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his supervisor conducted a personal business competing with MiMedx and knew that his
supervisor’s actions violated MiMedx’s policies. We agree.
At the hearing, Tornquist testified that he was aware that his direct supervisor
operated a personal business that sold medical products and that the competing product at
issue in this matter was sold through that personal business. Tornquist’s commissions from
the competing sales were paid from his direct supervisor’s personal business. An average
reasonable employee would not have sold a competing product to a customer , even if his
supervisor had advised it, if he was aware that his supervisor had a conflict of interest in
the sale.
Under these circumstances, Tornquist should have pursue d other options with his
employer before selling a competing product. At the hearing, a MiMedx employee testified
that an account executive may utilize many options to resolve issues that may arise with
their customers. The account executive can refer to MiMedx’s sales materials, its online
sales network, or ask a staff medical doctor for advice. The employee also stated that an
account executive should take his questions up the chain of command if he receives advice
from a supervisor who has a conflict of interest. An average reasonable employee would
have explored one of these options before competing with his employer and personally
benefiting from the sale.
By twice selling a competing product to a MiMedx customer, Tornquist blatantly
disregarded his company’s policies and violated his duty of loyalty to MiMe dx. His
conduct was not reasonable under the circumstances. We conclude that this conduct

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amounts to employment misconduct under Minn. Stat. § 268.095, subd. 6(a), and does not
satisfy a statutory exception under Minn. Stat. § 268.095, subd. 6(b).
The ULJ also determined that Tornquist’s competing sales did not amount to a
serious violation of the employer’s standards, as required by Minn. Stat. § 268.095,
subd. 6(a), because Tornquist only received $1,162 in commissions, a small percentage of
his total compensation. The ULJ’s reasoning is not supported by caselaw. In Skarhus, we
considered whether an employee engaged in employment misconduct by stealing less than
four dollars’ worth of food from her employer. 721 N.W.2d at 344. We did not focus on
the amount that the employee stole but instead analyzed whether the theft had a significant
adverse impact on the employer. Id. (explaining that “the value of the stolen items is not
the dispositive factor in our analysis”). We determined that it had a significant adverse
impact because the employer could no longer entrust the employee with her responsibilities
as a cashier. Id.
Likewise, we need not analyze the economic val ue of Tornquist’s commission s.
Instead, we consider whether Tornquist’s sales of a competing product significantly
impacted MiMedx. As a MiMedx account executive, Tornquist’s position required him to
sell MiMedx products to physicians and hospitals. He was required to strictly comply with
his noncompete and nonsolicitation agreements to ensure that MiMedx could protect its
customer base. MiMedx could no longer entrust Tornquist with protecting its customer
base after Tornquist used his access to a MiMed x customer to sell a competing product.
Tornquist’s conduct was a serious violation of the standards of behavior an employer has

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the right to reasonably expect of an employee and therefore constitutes employment
misconduct under Minn. Stat. § 268.095, subd. 6(a).
Reversed.