T-Mobile Petitions Court to Confirm Arbitration Injunction Against Reseller

On Thursday, T-Mobile USA Inc. asked a Seattle, Washington federal court to confirm an arbitration award it secured against Verity Wireless Inc. prohibiting the respondent from selling any of its retail stores to a T-Mobile competitor. The dispute stemmed from the parties’ failed retail services agreements, pursuant to which Verity served as an authorized dealer for T-Mobile beginning in June 2020. The complaint explained that Verity operated T-Mobile stores in Colorado, Washington, and California. 

The court filing stated that on March 18, T-Mobile notified Verity that it was terminating the relationship, citing Verity’s breaches of their agreements. Although T-Mobile deferred the effective date of its termination until May 1, Verity suddenly closed its stores on March 31, and refused T-Mobile’s demands to execute the transitional steps required by the master agreements. On April 8, T-Mobile initiated an arbitration.

Relevant to this week’s petition was the agreements’ provision prohibiting Verity from competing with T-Mobile for one year following termination. Allegedly, after Verity disregarded several requests by T-Mobile requiring Verity to transfer stores to T-Mobile-approved dealers or to T-Mobile, and after learning “facts that suggested that Verity’s principals and insiders were intending to convert the stores into AT&T stores that compete with T-Mobile in violation of the Agreements,” T-Mobile sought to enjoin Verity’s actions.

The request for emergency relief was briefed before the arbitrator, who, on May 13 entered the injunction restraining Verity from transferring T-Mobile stores except to T-Mobile or to T-Mobile-approved dealers, and prohibiting Verity from transferring T-Mobile stores to T-Mobile competitors. This week’s petition requested that the court confirm the arbitrator-issued injunction as an enforceable order of the court.

T-Mobile is represented by Polsinelli PC.