Aptim Corp. v. McCall

McCall resigned from Shaw and later became the CEO of Allied, Shaw’s direct competitor. Shaw sued, citing noncompete and nonsolicitation agreements in McCall’s employment contract. Those agreements call for arbitration and state that the employer may seek injunctive relief without waiving the right to arbitrate. The state court issued a Joint Protective Order. Aptim acquired the rights to McCall’s employment agreement but withdrew a subsequent motion for substitution in the suit. Aptim filed a demand for arbitration with the American Arbitration Association. Shaw filed an amended petition, deleting its request for damages, and a motion to dismiss the amended petition with prejudice. McCall filed an opposition, an answer, a counterclaim, a petition for declaratory judgment, a motion to consolidate, and a motion for constructive contempt against Aptim for demanding arbitration in violation of the protective order, though Aptim was not then a party to the case. Aptim, without Shaw, sued in federal court to compel arbitration and to stay the state-court proceeding. Before the federal court ruled, the state court issued an order joining Aptim in the state-court action, retroactively effective, finding that Aptim and Shaw had waived their arbitration rights. The federal district court then ordered arbitration and stayed the state-court action. The Fifth Circuit affirmed, finding that the factors weighed against abstention because the case does not involve jurisdiction over a thing and federal law provides the rules of decision on the merits and strongly favors arbitration. View "Aptim Corp. v. McCall" on Justia Law