IP Law Daily, TRADE SECRETS—S.D. Tex.: Sports nutrition company not entitled to injunction against former executives, alleged competitor, (Jun 3, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The company failed to show likely violations of noncompete and non-solicitation agreements; existing safeguards adequately protected its confidential information.

A federal court in Texas has denied a sports nutrition company’s request for a preliminary injunction against three former executives who left to join a competing beverage company. It found that the company failed to establish a likelihood of success on its noncompete and non-solicitation claims and failed to demonstrate irreparable harm. Although the court concluded that one former executive likely breached confidentiality obligations by transmitting company information to his new employer and that the company was likely to succeed on at least some trade-secret-related claims, it found that extensive remediation measures and binding stipulations offered by the defendants adequately addressed any risk of future misuse (Woodbolt Holdings, LLC v. Thomas, No. 4:26-cv-01669 (S.D. Tex. May 27, 2026)).

Plaintiffs Woodbolt Holdings, LLC and Woodbolt Distribution, LLC, doing business as Nutrabolt, manufacture and market dietary supplements, energy drinks, and functional beverages, including the Bloom product line. Defendants Kyle Thomas, T.J. Moore, and Madison Mathews are former Nutrabolt executives who resigned in late 2025 and joined Recess, a beverage company known for wellness drinks, CBD-infused beverages, and alcohol-free mocktails. Thomas served as Nutrabolt’s Global Chief Commercial Officer, while Moore and Mathews held senior positions in strategic insights and commercial operations.

The dispute arose after Thomas announced that he was leaving Nutrabolt to become co-chief executive officer of Recess. Moore and Mathews later resigned and joined Recess. Nutrabolt subsequently conducted a forensic review of company email accounts and alleged that Thomas and Moore had retained confidential information and trade secrets before departing. It further alleged that Thomas improperly recruited Moore and Mathews and that the three executives violated restrictive covenants contained in employment-related agreements.

Nutrabolt filed suit in February 2026, asserting claims under the Defend Trade Secrets Act and Texas Uniform Trade Secrets Act, along with claims for breach of contract, breach of fiduciary duty, and related causes of action. It later sought emergency injunctive relief that would have restricted the defendants’ activities at Recess, prohibited solicitation of employees and customers, and imposed additional remedial measures concerning confidential information. Following a briefing and an evidentiary hearing, the court denied the requested relief.

Competition. The court first considered Nutrabolt’s claim that the former executives violated their noncompetition agreements by joining Recess. Even assuming the agreements were enforceable, the court concluded that Nutrabolt had not shown that Recess qualified as a competing business under the contractual language.

The agreements defined Nutrabolt’s business as the development and sale of dietary supplements, sports nutrition products, protein products, and energy drinks. Recess, however, primarily sold relaxation beverages, CBD-infused drinks, magnesium beverages, and non-alcoholic mocktails. Although Nutrabolt argued that both companies participated in the broader functional beverage sector, the court found that the agreements did not define competition in those terms. Because Recess’s products differed from the categories specifically identified in the agreements, Nutrabolt failed to demonstrate a likelihood of success on its noncompete claims.

Solicitation. The court likewise found insufficient evidence to support Nutrabolt’s non-solicitation claims. Nutrabolt argued that Thomas recruited Moore and Mathews to leave the company and join Recess. The evidence, however, showed that Moore and Mathews independently approached Thomas regarding opportunities after becoming dissatisfied with developments at Nutrabolt.

The court relied on sworn declarations submitted by Moore and Mathews stating that Thomas did not solicit them. It also found that emails cited by Nutrabolt merely reflected professional courtesies and efforts to maintain personal relationships rather than recruitment activity. Nutrabolt further failed to identify evidence that any customers, vendors, or additional employees had been solicited. As a result, the court concluded that Nutrabolt was unlikely to prevail on its non-solicitation claims.

Irreparable harm. The court also found that Nutrabolt failed to establish irreparable harm, an essential prerequisite for injunctive relief. It emphasized that Nutrabolt waited approximately four months after learning that Moore and Mathews had joined Recess before seeking emergency relief.

Citing Embarcadero Technologies, Inc. v. Redgate Software, Inc., No. 1:17-CV-444-RP, 2017 WL 5588190 (W.D. Tex. Nov. 20, 2017), and BCOWW Holdings, LLC v. Collins, No. SA-17-CA-00379-FB, 2017 WL 3868184 (W.D. Tex. Sept. 5, 2017), the court noted that substantial delays in seeking an injunction generally undermine claims of immediate and irreparable injury. The absence of evidence of continued employee departures or other ongoing harm further weakened Nutrabolt’s request.

Confidential information. The court reached a different conclusion regarding Thomas’ handling of Nutrabolt information. Evidence showed that Thomas forwarded company documents to personal and Recess email accounts shortly before leaving the company. Among those documents was an “Agenda for NYC” presentation containing company strategies, retailer plans, and other internal business information.

The court found that at least portions of the information clearly fell within Thomas’ contractual confidentiality obligations. Citing General Universal Systems, Inc. v. HAL, Inc., 379 F.3d 131 (5th Cir. 2004), the court concluded that Nutrabolt was likely to succeed on its breach-of-contract claim and assumed, for purposes of the motion, that it was also likely to succeed on at least some trade-secret claims. The evidence showed that Thomas had transmitted Nutrabolt materials to his Recess account and shared at least some of that information with Recess personnel.

Relief. Despite finding a stronger case against Thomas, the court concluded that additional injunctive restrictions were unnecessary. Citing Anadarko Petroleum Corp. v. Davis, No. H-06-2849, 2006 WL 3837518 (S.D. Tex. Dec. 28, 2006), the court distinguished between preventing misuse of confidential information and preventing a former employee from working for a new employer.

The court noted that Recess had retained an independent forensic firm to identify, isolate, and restrict access to Nutrabolt materials. It also emphasized that the defendants had agreed to binding stipulations prohibiting the use or disclosure of Nutrabolt's confidential information and requiring additional remediation if further documents were discovered. The court further observed that the Fifth Circuit rejected the inevitable-disclosure doctrine in Cardoni v. Prosperity Bank, 805 F.3d 573 (5th Cir. 2015), making it inappropriate to presume future misuse merely because Thomas joined a company operating in a related industry.

Finding the existing safeguards sufficient to address any threat of future harm, the court denied Nutrabolt’s motion for a temporary restraining order and preliminary injunction while entering the defendants’ stipulations as binding obligations during the litigation.

The Case is No. 4:26-cv-01669.

Judge: Ellison, K.

Attorneys: Daniel Christopher Polese (Lynn Pinker Hurst & Schwegmann LLP) for the Woodbolt Holdings, LLC. Grace Maureen Darrah (Ahmad, Zavitsanos & Mensing, PLLC) for Kyle Thomas.

Companies: Woodbolt Holdings, LLC

Cases: TradeSecrets TexasNews