IP Law Daily, TRADE SECRETS—N.D.N.Y.: Preliminary injunction denied in millwork company dispute, (May 21, 2025)

By Kevin M. Finson, J.D.

Injunctive relief was denied because the allegations of irreparable harm which would occur in the absence of an injunction were highly speculative and not imminent.

A millwork company failed to show its entitlement to a preliminary injunction or temporary restraining order against a former employee, the U.S. District Court in Syracuse has held. The evidence did not show that the company was likely to succeed in proving that the employee had conveyed any trade secrets to his new employer, and the claimed irreparable harm was merely speculative (Executive Trim Construction, Inc. v. Richardson, No. 1:25-cv-00369-BKS-PJE (N.D.N.Y. May 20, 2025)).

Executive Trim Construction, Inc. (Executive) was in the business of producing and installing millwork, along with warehousing, production, and installation of furniture, fixtures, and equipment for businesses in the hospitality industry. Shane Richardson was employed by Executive as its Director of Business Development. Richardson eventually resigned from Executive. Executive alleged that while still employed by Executive, Richardson had intentionally diverted business to a competitor, Claypool Holdings, LLC d/b/a Merric Millwork & Seating (Merric), for which he later worked. Executive also alleged that Ricardson had made damaging statements about Executive’s solvency, which caused a customer to require a performance bond.

Executive brought suit against Richardson and Merric for misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA) and New York common law, interference with prospective economic relations, slander, and related claims, and sought a temporary restraining order and preliminary injunction. The court considered the traditional injunction factors.

Irreparable harm. Executive argued that it would suffer irreparable harm in the form of lost business in the absence of an injunction, and pointed out that both Executive and Merric bid on projects with a shared customer, and that Merric now had access to its confidential bidding information through Richardson. The court held that this harm was speculative, not imminent, because Merric had submitted only three bids to that shared customer since employing Richardson, none of which were in Executive’s primary market, and had won none of those bids. There was also no connection shown between Richardson’s employment and any potential loss, because the evidence showed that the bidding process at Executive was not in any way confidential and relied on public data from suppliers.

Likelihood of success on the merits. As to the trade secrets claims, the court found that Executive had failed to show a likelihood of success because its claimed secrets were bid calculations that lacked any confidential or proprietary formula or data. Rather, the evidence showed that Richardson had been responsible for preparing bids using publicly available information and a system which he was never told was confidential nor was treated as confidential by anyone at Executive.

The court also held that Executive had failed to show a likelihood of success on the misappropriation element, as there was nothing to show that Richardson had conveyed any information to Merric or that Merric had used any information provided by Richardson. There was no likelihood of success on the tortious interference claim because there was no showing that Richardson acted dishonestly or without legal purpose, or that the performance bond required by a customer was in fact required due to statements made by Richardson.

Balance of hardships and public interest. Because it found that Executive had failed to show irreparable harm or a likelihood of success on the merits, the court declined to reach the remaining injunction factors.

The court denied the request for a temporary restraining order and a preliminary injunction.

The Case is No. 1:25-cv-00369-BKS-PJE.

Judge: Sannes, B.

Attorneys: Trevor J. Telisky (Cooper Erving & Savage LLP) for Executive Trim Construction, Inc. Conor Lynch (Whiteman Osterman & Hanna LLP) for Shane Richardson. Kelly D. Schneid (Moritt Hock & Hamroff LLP) for Claypool Holdings LLC.

Companies: Executive Trim Construction, Inc.; Claypool Holdings LLC

Cases: TradeSecrets NewYorkNews