Align Technology (ALGN -1.7%) has won the first round in a legal spat between the company and SDC Financial LLC and SmileDirectClub LLC regarding its Invisalign stores.
The plaintiffs allege that Align’s pilot program breaches non-compete provisions that apply to members of SDC Financial LLC. Remedies requested include the preliminary and permanent enjoinment of all activities related to the pilot program, including the closure of all Invisalign stores and a prohibition on opening new stores, and allowing SDC entities to exercise their right to repurchase all of Align’s SDC Financial LLC membership interests at a price equal to Align’s current capital account balance.
On Friday, June 29, a Tennessee court denied the SDC entities’ request for a temporary injunction preventing Align from opening new stores. The company says it intends to continue the pilot program and will “vigorously defend itself” in arbitration proceedings currently scheduled for December 2018.
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