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Settlement Under Consideration in Novus Non-Compete Suit, Court Documents Say

The parties involved in a non-compete suit filed by Novus Franchising Inc. in Savage, Minn., have motioned jointly for the court to extend the trial date to 90 days after the court rules on the defendants' recent motion for partial summary judgment, "to give the parties an opportunity to complete their settlement discussions once they learn of the issues remaining to be resolved at trial," according to court documents filed earlier this week. The suit originally was filed in the U.S. District Court for the District of Minnesota in Fourth Judicial District of the State of Minnesota against Nathan Hemperley and Corey Hemperly of the Windshield Doctor in Pocatello, Idaho, and Rande Oksendahl of Windshield Rescue. It was moved to the U.S. District Court for the District of Minnesota after its original filing.

"The parties continue to discuss the possibility of resolving these matters without litigation," write the attorneys for both the plaintiff and defendants in this week's motion. "The parties have discovered, however, that their settlement discussions cannot proceed further until the Court rules on the pending Motions for Partial Summary Judgment, so that the parties will be fully advised of the issues that remain in these cases."

Prior to opening their own auto glass replacement businesses, the defendants previously held Novus franchising agreements, and Novus contends that they have violated the "post-termination covenants" in the agreement, which includes a 2-year non-compete clause.

The defendants, who offered replacement in addition to repair during their time as Novus franchisees, claim that because Novus franchises do not conduct windshield replacements, only their repair activities could have been construed as part of their operations during their time as franchisees. In addition, the defendants cite definition of a competitive business within the Novus franchise agreement, as follows: " … any business that has any windshield, automotive or glass repair component as part of the business will be considered competitive with or similar to the Novus® Business."

The defendants argue that the scope of this agreement is so broad that it would even keep them from operating a business involving auto-body, transmission, brake and/or engine repair. The memorandum in support of the motion also notes that the court has allowed the companies to continue to operate their businesses during litigation because the franchise agreement is "not reasonable in scope."

The motion also cites an earlier Idaho case involving a non-compete agreement, as follows: "Non-compete provisions must be reasonable, which is to say they must not be more restrictive than necessary to protect a legitimate business interest."

Currently, the pre-trial is scheduled to be held prior to September 1.

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