Preliminary Injunction Denied For Alleged Misappropriation Of Trade Secrets
In the business litigation case of Boyds, LP v. To, PICS Case No. 15-0721, (C.P. Philadelphia, January 14, 2015), the Honorable Gary S. Glazer denied the Plaintiff’s petition for injunctive relief because plaintiff failed to show how the requested preliminary injunction would abate the alleged misappropriation of trade secrets where the information had been returned and greater injury would result from granting the injunction than denying it, plaintiff failed to satisfy its burden for injunctive relief. Plaintiff’s petition for injunctive relief denied.
Plaintiff Boyds LP, a high-end retailer of men’s and women’s clothing that had been operating for more than 75 years in Philadelphia, entered into an employment contract with defendant Tung To in September 2009. The agreement provided that defendant would not directly or indirectly use any name or disclose any of plaintiff’s trade secrets, customer lists, suppliers or other material confidential information and would not directly or indirectly induce or attempt to induce any supplier or customer to terminate its business with plaintiff for a period of 12 months beginning with the date thereof.
Defendant worked for plaintiff in the men’s footwear department as a floor manager/buyer until Sept. 16, 2013. On his last day of employment, plaintiff learned that defendant planned to open his own men’s footwear store in the Philadelphia area. Plaintiff also alleged that defendant took a confidential clientele book which contained valuable confidential client names, addresses and contact information. Defendant allegedly returned the list on Oct. 24, 2013.
Defendant opened his store, ToBox, in Philadelphia on Oct. 31, 2013. In December, plaintiff filed a petition for a preliminary injunction seeking that defendant be enjoined from: working for ToBox or any other direct competitor of plaintiff during the pendency of the litigation and for one year; competing with plaintiff within a 50-mile radius of plaintiff for one year; soliciting the business of any existing or potential customer of plaintiff or interfering with any business relations of plaintiff; using or disclosing plaintiff’s confidential information. In addition, plaintiff sought defendant be required to return all originals and copies of any documents containing plaintiff confidential information or trade secrets; and that a constructive trust be imposed to benefit plaintiff on all profits or other tangible benefits derived from business generated by defendant in connection with a violation of any term.
The court noted that to obtain a preliminary injunction, a petitioner had to establish that: relief was necessary to prevent immediate and irreparable harm, greater injury would occur from denying the injunction than from granting it, the injunction would restore the parties to the status quo ante, the petitioner was likely to prevail on the merits, the injunction was reasonably suited to abate the offending activity, and the public interest would not be harmed if the injunction was granted.
The court said it was not persuaded by plaintiff’s argument that it would suffer irreparable harm to customer, affiliate and supplier relationships if an injunction was not granted. The court found that plaintiff had not provided any support as to how an injunction would abate the alleged misappropriation of trade secrets since defendant had returned the confidential book on which plaintiff’s request for an injunction was based and plaintiff had not identified any other confidential information that had been misappropriated.
Further, the court said that besides speculation and conclusory allegations, plaintiff had not identified any harm that had occurred. Moreover, as plaintiff was a large and distinguished retail business and ToBox had been open for less than two months, the court found that greater injury would occur from granting the injunction than from refusing it. Thus, plaintiff had not satisfied its burden for injunction relief.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 38PLW450 (Tuesday, May 12, 2015)
Filed Under: Business Litigation, Non-Compete Clauses, Preliminary Injunction & Trade Secrets
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