Trade Secret Case — Presumed Injury?

In Direct Biologics, LLC v. McQueen, a preliminary-injunction case involving a noncompetition agreement, the Fifth Circuit found no abuse of discretion when the district court declined to presume irreparableharm. Among other factors reviewed by the Court, it considered:

• “[I]t is unclear whether federal courts should apply a state-law ‘presumption of irreparable harm’ when determining whether a preliminary injunction should issue in federal court.
• “The district court did not abuse its discretion by declining to presume irreparable injury based on McQueen’s breach of his non-compete covenants. As previously explained, the Employment Agreement broadly prohibited him from providing “similar” services to Vivex that he provided to DB.  The Operating Agreement covenant was even broader. Thus, McQueen could have breached these covenants even without actually using or disclosing DB’s confidential information or trade secrets.“
• “[T]he district court could have found the presumption rebutted by Vivex’s evidence that McQueen was not in fact competing with DB through his work for Vivex.”

No. 22-50442 (April 3, 2023).