Florida Federal Court Raises the Bar on Irreparable Injury
Businesses seeking injunctive relief to enforce non-competition agreements in Florida might be required to show the confidential information they seek to protect is neither unnecessary nor outdated, according to a recent ruling in Transunion Risk and Alternative Data Solutions, Inc. v. Challa, 2016 U.S. Dist. LEXIS 166346, Case No. 9:15-cv-91049 (S.D. Fla. March 23, 2016). The defendant/former employee in that litigation testified that he would not use his extensive knowledge of the plaintiff/former employer’s confidential business information to perform his new job with a competitor. Despite the court’s acknowledgement of a legal presumption that the plaintiff would be irreparably injured by the defendant’s employment with a competitor, the defendant was able to avoid a preliminary injunction with his own self-serving testimony about his job duties. This was also despite the court’s specific finding that the former employer “has a substantial likelihood of success on the merits of its claim for breach of the Agreement.” The court ruled that the presumption of irreparable harm was rebuttable and that the defendant presented sufficient evidence to rebut the presumption.
In testimony at the preliminary injunction hearing, the defendant explained the nature of his new position, the publicly available information that he utilized to perform his new job functions, and the reasons why he did not need the plaintiff’s confidential information in his new position. The court also pointed out that 14 months had passed since the defendant last had access to the plaintiff’s confidential information and that both parties agreed that the data fusion industry in which they worked was rapidly evolving. As a result, the court denied plaintiff’s motion for a preliminary injunction.
The court further noted that ‘[t]o succeed on the merits of its claim, [the former employer] must also establish damages resulting from the breach.” The court then questioned whether the former employer would be able to do so “in light of the findings and conclusions” reached by the court in denying the preliminary injunction.
Employers seeking to enforce non-competes should proactively gather and be prepared to present evidence in hearings seeking preliminary injunctive relief to show that a former employee’s new position will necessarily entail utilization of the employer’s valuable confidential information. Based on Transunion, companies face an uphill battle if they request injunctive relief to prevent employment by a competitor which might be seen as only to preserve the confidentiality of unnecessary or outdated information.