Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—6th Cir.: Trade-secret injunction vacated against former executive, contractor, (Sep 21, 2026)

By Patricia K. Ruiz, J.D.

A former employer failed to show imminent competitive harm, while forensic-review provisions swept too broadly, the court held.

A federal appeals court vacated a preliminary injunction entered in a trade-secret dispute between a Kentucky electrical contractor and its former utility-division vice president, finding the employer failed to establish irreparable harm from a competitor's contract with a utility customer. The court also held that provisions requiring forensic examination of the defendants' electronic devices were not narrowly tailored to protect confidential information. The case was remanded for further proceedings (UEC Holdings, Inc. v. Hatcher, No. 25-6123 (6th Cir. Sep. 17, 2026)).

Background. UEC Holdings, Inc. and subsidiary United Electric Company, Inc. (United Electric) sued former vice president Hatcher, Troy Kent, and Kent Power, Inc., alleging misappropriation of trade secrets under the Defend Trade Secrets Act and the Kentucky Uniform Trade Secrets Act, as well as related contract claims. The claims arose after United Electric alleged that Hatcher shared confidential pricing and rate information with Kent Power before his termination in 2025.

Irreparable harm not established. The district court had ordered Kent Power to cease performing work for Louisville Gas & Electric (LG&E) and to withdraw certain proposals involving United Electric customers and prospective customers. The Sixth Circuit concluded that the plaintiffs failed to show the kind of actual and imminent injury required to support that relief.

The record showed that Kent Power's LG&E contract involved transmission work that United Electric could not perform because it lacked the necessary equipment. Witnesses also testified that Kent Power had not taken business from United Electric, and United Electric's former chief operating officer could not identify any lost business attributable to Kent Power.

Although the district court found that Kent Power's relationship with LG&E could eventually create a competitive threat if the company expanded into distribution services in Louisville, the appeals court said the evidence did not demonstrate that such harm was likely. Kent Power had unsuccessfully attempted to obtain distribution work from LG&E, but the record contained no evidence that United Electric had lost business or was likely to lose business because of Kent Power's transmission contract.

The court distinguished prior trade-secret cases in which injunctions were upheld because defendants were continuing to use misappropriated trade secrets in their products or operations. Here, the plaintiffs did not contend that performance of the LG&E contract involved ongoing use of United Electric's trade secrets.

Forensic-review provisions overly broad. The appeals court also found that portions of the injunction requiring an independent forensic examiner to image, preserve, and search computers, mobile phones, cloud accounts, and other electronic storage devices lacked adequate limitations.

According to the court, the order did not identify which custodians, devices, or categories of information were subject to review and failed to define what information would be considered relevant or responsive. As written, the order risked exposing Kent Power's confidential business information, including contracting bids, customer and vendor information, intellectual property, and other trade secrets.

The court further noted that the defendants identified private employee information, including health and payroll records, that could also be swept into the examination. Although the parties discussed safeguards and clawback procedures with the forensic examiners, those understandings were never reduced to a written protocol or incorporated into a court order. The panel said those discussions did not cure the breadth of the injunction itself.

Order vacated and remanded. Because the plaintiffs failed to establish irreparable harm supporting the restrictions on Kent Power's work for LG&E and because the forensic-examination provisions were not narrowly tailored, the Sixth Circuit vacated the preliminary injunction and remanded the matter for further proceedings.

The Case is No. 25-6123.

Judge: Siler, E.

Attorneys: Jonathan Landesman (Cohen Segalias Pallas Greenhall & Furman) for UEC Holdings, Inc. David A. Portinga (Miller Johnson) for Steven Mark Hatcher.

Companies: UEC Holdings, Inc.

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