Labor & Employment Law Daily Wrap Up, CONTRACT CLAIMS—D. Neb.: Crop insurance company’s request for preliminary injunction against former employees fails, (Nov 12, 2025)

By Cathleen Calhoun, J.D.

“Farm Credit’s evidence that Defendants have assisted each other in soliciting and servicing customers is entirely speculative.”

Although Farm Credit Services of America (Farm Credit) was likely to show that the nonsolicitation covenants in its former insurance sales employees’ agreements were enforceable, it did not show a likelihood of success of proving the provisions were actually breached, ruled a federal district court in Nebraska. After leaving Farm Credit, two employees opened their own companies selling insurance, despite having noncompete agreements. The argument of irreparable harm to Farm Credit failed for purposes of a preliminary injunction since it could not show that monetary payment would be insufficient, and the balance of the harms favored the former employees since they would be kept from working if it were granted. However, the case moved forward on Farm Credit’s claim for damages for breach of contract (Farm Credit Services of America, FLCA v. Haas, No. 8:25CV580 (D. Neb. Nov. 7, 2025)).

One former employee worked for Farm Credit from May 2013 to September 13, 2025, and the other worked there from June 2022 to September 12, 2025. As insurance officers, their duties included selling crop insurance to existing Farm Credit customers; servicing the customers; and identifying, soliciting, and servicing new crop insurance customers on behalf of Farm Credit. Their employment contracts prohibited them from soliciting customers they did business with during the course of their employment for a period of two years.

Federal regulations. Farm Credit is part of the federal Farm Credit System, soliciting private hail insurance, federally reinsured multiple peril crop insurance, revenue protection, yield protection, livestock insurance, named peril insurance, and any other current or future crop insurance plans issued under the authority of the Federal Crop Insurance Act. The federal government regulates the crop insurance industry and sets the price for crops, meaning what the insurance payout will be. The fall crop insurance sales season ended on September 30, 2025, the date federally mandated for customers to purchase crop insurance. After that, customers cannot change their crop insurance for fall crops until the next crop insurance season. The next crop insurance season starts in spring 2026.

Likelihood of success. Farm Credit asserted one count for breach of employment contracts. Under Nebraska law, a claim for breach of contract requires showing: (1) a valid promise; (2) a breach of that promise; (3) damages; and (4) compliance with any conditions’ precedent.

The court found that Farm Credit failed to show a likelihood of success of demonstrating the former employees breached the confidentiality provisions. The amended verified complaint did not contain any allegations that information from Farm Credit was shared or otherwise divulged. “And the sole cause of action for breach of contract alleges only that Defendants have solicited clients with no mention of confidential information,” the court noted. Also, the temporary restraining order (TRO) that had been previously granted, and accompanying documents, did not provide any factual basis for finding that the former employees misused Farm Credit’s confidential information. As a result, the court found Farm Credit did not show a likelihood of success on the merits of its claim that the former employees breached the nonsolicitation provision.

No irreparable harm. Similar to the reasons Farm Credit has not shown a likelihood of success on the merits, the court found that Farm Credit did not provide evidence that could be considered of such eminence that equitable relief was required. Specifically, Farm Credit did not put forth evidence of conduct that would be in breach of the nonsolicitation provision and cause irreparable harm.

The declarations from a Farm Credit employee “amount to speculation and vaguely discuss a conversation with one customer who did not even leave Farm Credit, and a conversation with an insurance company that provided cancellation notices.”

In addition, Farm Credit failed to demonstrate how money damages would be inadequate to compensate it for any harm it suffered. And, unlike the TRO granted earlier, which was imminent due to the fall crop insurance season closing on September 30, 2025, the preliminary injunction would cover the next crop insurance season, that does not start until spring 2026.

Balance of harms and public interest. The potential hardship to the former employees in granting injunctive relief would be to preclude them from working. As a result, the balance of harms overall weighed in favor of denying injunctive relief. And, although the public interest favors enforcement of voluntary contract obligations, since the record presently showed no violation, the court found that the public interest weighed in favor of the former employees.

The case is No. 8:25CV580.

Attorneys: Christopher R. Hedican (Baird, Holm Law Firm) for Farm Credit Services of America. Daniel J. Fischer (Koley, Jessen Law Firm) for Matthew Haas.

Companies: Farm Credit Services of America

Cases: ContractClaims RemediesDamages StateLawClaims NebraskaNews