### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 21-3101
DM T RANS , LLC d/b/a A RRIVE L OGISTICS , Plaintiff -Appellant ,

v.

L INDSEY B. S COTT , et al. , Defendants

- Appellees

.

____________________ Appeal from the United States District Court for the Northern District of Illinois , Eastern Division. No. 1:21

- cv

- 03634 — Harry D. Leinenweber , Judge

.

____________________
A RGUED A PRIL 21, 2022

— D ECIDED J UNE 28, 2022

____________________

Before E ASTERBROOK , R OVNER , and B RENNAN , Circuit Judges

. B RENNAN , Circuit Judge

. DM Trans, LLC (which does business as Arrive Logistics, or “Arrive”) and Traffic Tech, Inc. compete to help customers coordinate shipments of goods

. S ix employees at Arrive departed for Traffic Tech despite restrictive covenants

. Arrive sued the six individuals and Traffic Tech for injunctive relief, claim ing irreparable harm2 No. 2 1-3101

because th e individuals had breach ed their restrictive covenants and misappropriat ed trade secrets . T he district
court sided with the defendants and denied Arrive’s motion for a preliminary injunction. Because Arrive has an adequate remedy at law for each of its claimed injuries , and therefore faces no irreparable harm , we affirm the denial of injunctive relief.
I
A. Factual Background
Arrive and Traffic Tech are rivals in the third

- party logistics industry . B rokers such as Arrive and Traffic Tech serve as middlemen tasked with arrang ing certain details of agreements between customers (who ship goods) and carriers (who transport them). The brokers submit bids to customers,

m any of which solicit bids from multiple brokers. Both Arrive and Traffic Tech employ more than one hundred entry

- level sales representatives in the Chicago area, and they retain many more nationwide . T hose employees often co ntact potential customers to ask for their business. B eyond Arrive and Traffic Tech, hundreds of third

- party logistics companies c ompete with one another just in the Chicago area.

Between 2017 and 2019, each of the six individual defendants

— Lindsey Scott, Frank Hernandez, Matthew Duffy, Bryan Klepperich, Jake Hoffman, and Scott Mayer

— joined Arrive as an entry

- level employee. Though their job titles differed slightly, a significant proportion of each individual defendant ’s responsibilities was to cold call potential customers (other than Duffy, who worked on pricing)

. While employed at Arrive, the six individual s soughtNo. 2 1-3101 3

management

- lev el position s and raises that Arrive was not willing to provide.
All six individuals had access during their employment to Arrive’s software platform , called Accelerate . Accelerate contain ed information about customers, including their contact information, buying history and trends, and preferences. Arrive began to use Accelerate in March 2020, around the onset of the COVID

- 19 pandemic. Accelerate was updated continuously with new data such as shipment information and sales metrics. As time passe d the same type of information remain ed on Accelerate, though in near

- real time , new data —s uch as shipments and employee sales metrics

— we re added. Because Arrive’s employees began working remotely duri ng the early stages of the pandemic, they used personal devices for all work

- related tasks from that point forward, including tasks that involved accessing and using Accelerate. Arrive did not request that the six individuals delet e company data from their personal devices upon their departure from the company, a point to which we will return. When each individual defendant joined Arrive, he or she was required to sign an employment agreement containing restrictive covenants. Those agreements included non

c ompetition provisions (lasting for six months after the termination of employment) and non

- solicitation provisions (lasting for twelve months after the same date ).
At different times between December 2020 and January 2021, Arrive required the individual defendants to sign updated employment agreements (“the 2020

– 21 employment agreements”), which included new restrictive covenants. The 2020– 21 employment agreements provide d for the same4 No. 2 1-3101

tempor al non

- competition and non

- solicitation obligations as the previous agreements. The updated non

- competition provisions prohibited the employees from “[e]ngag[ing] or participat [ing] in the rendering of services which are the same or similar to the services Employee provided over the last
two

... years of employment with the Company in any aspect of the Business in the Territory,” which as defined in the agreements consists of the 48 contiguous states and the District of Columbia. Additionally, the 2020

– 21 emp loyment agreements state d: “I n the event of any breach by Employee of [the non

- competition or non

- solicitation obligations], the time periods of such restrictive covenants shall be further extended in an amount equal to the time period of the breach.”
The 2020– 21 employment agreements also contain ed a broad arbitration provision u nder which all disputes

— other than actions filed by Arrive or its affiliates, seeking injunctive relief

— must be settled by binding arbitration. The parties do not contest the vali dity of th is arbitration provision. Throughout spring 2021, e ach of the individual defendants resigned from Arrive and joined Traffic Tech. Lindsey Scott was the first to learn about an opportunity at Traffic Tech when a third

- party recruiter contacted her

. Scott’s offer from Traffic Tech afforded her a more attractive job title, greater responsibility, and approximately $50,000 in additional compensation than her position at Arrive

. She started at Traffic Tech on May 3, 2021.

T he remaining individual defendants (aside from Duffy) also learned of job opportunities at Traffic Tech through aNo. 2 1-3101 5

third

- party recruiter

. 1 Nearly all the individual defendant s

w ere offered more senior positions at Traffic Tech.

B. Procedural History
Arrive , headquartered in Texas , filed its original complaint in June 2021 against five of the individual defendants in the United States District Court for the Western District of Texas ; neither Hoffman n or Traffic Tech was sued . The complaint alleged the defendants had breached their contractual obligations under the 2020

– 21 employment agreements. It also alleged viol ation s of the federal Defend Trade Secrets Act; violation s of the Texas Uniform Trade Secrets Act; and tortious interference with current and prospective customer relations and business relations

. Arrive ’s original complaint sought injunctive relief in several respects, including prohibiting the individual defen dants from working for Traffic Tech or any other company providing services in the third

- party logistics industry within th e nation’s 48 contiguous states. Along with its complaint, Arrive mo ved for a temporary restraining order. After a telephonic hearin g, the Texas district court denied Arrive’s request for a TRO

. Th at court ordered the parties to brief a jurisdictional issue, as well as conduct expedited discovery, in advance of an expected preliminary

- injunction hearing. In the meantime, the court gran ted the defendants’ motion to transfer the case to the United States District Court for the Northern District of Illinois.

1 Duffy had previously worked for Traffic Tech and was contacted by a former colleague about returning there.6 No. 2 1-3101

Arrive then filed its operative Second Amended Complaint , adding Traffic Tech as a defendant and includ ing new allegations of tortio us interference with contract and unjust enrichment against Traffic Tech. The next month, Arrive moved for a preliminary injunction. Following the completion of expedited discovery and a hearing , the Illinois district court denied injunctive relief in an o pinion and order. Applying Texas contract law, the court concluded that Arrive was unlikely to succeed on the merits of its breach of
contract claims because the individual defendants’ non

solicitation and non

- competition obligations were likely unenforceable. Likewise, the court explained that Arrive had a low probability of success on its trade secrets claims because it had not sufficiently identifi ed the purported trade secrets or take n reasonable steps to maintain the secrecy of its information . T he district court also found insufficient evidence of irreparable harm. Finally, the court reasoned that the balance of harms favored the individual defenda nts, because in its view an injunction would functionally require them to stop working for Traffic Tech. Arrive now appeals that deni al of Arrive’s preliminary injunction motion

. II We begin with jurisdiction. The parties are correct that the district court had federal question jurisdiction over the claims for injunctive relief under the D efend T rade S ecrets A ct , 18 U.S.C. § 1836(b)(3), and supplemental jurisdiction over Arrive’s state

- law claims under 28 U.S.C. § 1367. But there are two additi onal concerns: the appealability of the court’s order denying injunctive relief , and mootness.No. 2 1-3101 7

A. Appeal s from the Denial of Injunctive Relief Though the parties do not dispute that the district court’s denial of injunctive relief may be appealed, “ federal courts have an independent obligation at each stage of the proceedings to ensure that they have subject matter jurisdiction over the dispute. ” Olson v. Bemis Co. , 800 F.3d 296, 300 (7th Cir. 2015) (citations omitted). U nder 28 U.S.C. § 1292(a) (1) , t his court has jurisdiction to adjudicate a n appeal from a district court’s order “refusing” to issue a preliminary injunction , even where no final judgment has issued

. That statute is a limited exception to the final

- judgment rule, and we construe it narrowly. Albert v. Trans Union Corp. , 346 F.3d 734, 737 (7th Cir. 2003)

. Where the district court’s order “stripped the case of its equitable component,” the Court of Appeals has jurisdiction to consider an interlocutory appeal based on the denial of injunctive relief. Chicago Joe’s Tea Room, LLC v. Vill. of Broadview , 894 F.3d 807, 812 (7th Cir. 2018) (citation omitted)

. Here, the district court’s order denied Arrive’s motion for a preliminary injunction in full. The court did not qualify its order by stat ing that any claims remained pending before it, and the parties do not co ntest that the order disposed of each of Arrive’s claims for injunctive relief. Thus, t he district court stripped the case of its equitable component , 2 and w e have appellate jurisdiction under 28 U.S.C. § 1292(a).

2 By the terms of the 2020

– 21 employment agreements, Arrive’s requests for injunctive relief constitute the sole component of the dispute s between Arrive and the individual defendants that may be resolved through litigation, rather than by arbitration.8 No. 2 1-3101

B. Mootness

T he defendants also contend that certain aspects of this appeal are moot. Because Article III forbids federal courts from deciding moot questions or abstract propositions, mootness is a jurisdictional inquiry that must be resolve d at the outset of an appeal. Stone v. Bd. of Election Comm’rs for City of Chicago , 643 F.3d 543, 545 (7th Cir. 2011) (citing North Carolina v. Rice , 404 U.S. 244, 246 (1971)). If our court cannot grant the litigants any effectual relief, the appeal is moot
, W. Ill. Serv. Coordination v. Ill. Dep’ t of Hum. Servs. , 941 F.3d 299, 302 (7th Cir. 2019), and we are to vacate the order under review and remand with instructions to dismiss for lack of jurisdiction. Auto Driveaway Franchise Sys., LLC v. Auto Driveaway Richmond, LLC , 928 F.3d 670, 674 (7th Cir. 2019) (citing United States v. Munsingwear, Inc. , 340 U.S. 36, 39 –40 (1950)). Where an appeal involves multiple distinct issues, a single issue may become moot while the remainder of the dispute between the parties does not. Home Care Providers, Inc. v. Hemmelgarn , 861 F.3d 615, 621 (7th Cir. 2017) (citing Univ. of Texas v. Camenisch , 451 U.S. 390, 39 3–9 4, 398 (1981)). The defendants argue that aspects of this case are moot, so they bear the burden of persuasion on that point. Id

. at 620

– 21 (citation omitted); Portalatin v. Blatt, Hasenmiller, Leibsker & Moore, LLC , 900 F.3d 377, 383 (7th Cir. 2018).

T he defendants offer two reasons why Arrive’s claims for breach of contract under Texas law are moot

. First, the non

competition provisions of the individual defendants’ restrictive covenants have expired, while the non

- solicitation provisions have lapsed for each individual defendant except Duffy. Second, the defendants represent that three of theNo. 2 1-3101 9

individ ual defendants are no longer employed at Traffic Tech, which they believe renders moot the breach

- of

- contract claims against those defendants. Arrive disagrees. It cites the tolling provision of the 2020

– 21 employment agreements , which purports to extend the effective time period of the restrictive covenants “ in an amount equal to the time period of the breach.” According to Arrive, there is a live controversy regarding whether th e individual defendants should be enjoined from breaching th e restric tive covenants

. Even if the tolling provision is unenforceable, Arrive contends , th is court should use its equitable power to extend the effective time periods of the restrictive covenants. W ith respect to the individual defendants who no longer work for T raffic Tech, Arrive argues the claims for breach of contract are also not moot . I n the absence of an injunction , th ose individual defendants could work for Traffic Tech once again, or they could violate their restrictive covenants while employed at another third

party logistics company.
The first mootness issue is the closer of the two

. In the defendants ’ view , Texas law renders the tolling provisions in the restrictive covenants unenforceable , while Arrive interprets Texas law differently

. Ultimately, that question need not be resolved because , under Texas law , “a district court may exercise its equitable power to craft an injunction that extends beyond the expiration of the covenant not to compete.” Merritt Hawkins & Assocs., L.L.C. v. Gresham , 861 F.3d 143, 158 (5th Cir. 2017) (citing Guy Carpenter & Co., Inc. v. Provenzale , 334 F.3d 459, 464 (5th Cir. 2003)) ; see also Premier Indus. Corp. v. Tex

. Indus. Fastener Co. , 450 F.2d 444, 448 (5th Cir. 1971) (“ Appellants ’ argument that the trial judge10 No. 2 1-3101

exceeded his discretion by enjoining the appellants beyond the time specified in the

... contract is without merit .”). Texas intermediate appellate courts have likewise observed that state law gives trial courts the equitable authority to extend the duration of restrictive covenants. See Sadler Clinic Ass'n, P.A. v. Hart , 403 S.W.3d 891, 89 8–9 9 (Tex. App. 2013) ; Farmer v. Holley , 237 S.W.3d 758, 761 (Tex. App. 2007). Thus, the expiration of the time period of a former employee’s restrictive covenants does not render moot a n employer’s request for an injunction to prevent the former employee from violating those restrictive covenants. Guy Carpenter , 334 F.3d at 464 . I f we were to remand th is case to the district court, that court would have equitable authority to enjoin the individual defendants even if the tolling provision of the 2020

– 21 employment agreements were unenforceable under Texas law. See id

. As for the second mootness issue, a court could still grant Arrive effectual relief in the form of an injunction , even though certain individual defendants no longer work for Traffic Tech

. Injunctive relief could prohibit the m from violating their restrictive covenants, either as employees o f Traffic Tech (if they were to be rehired there) or as employees of another Arrive competitor in the third

- party logistics industry. In sum, the defendants have not carried their burden of persuasion to show the appeal is moot as to Arrive’s claims for br each of contract

. See Home Care Providers , 861 F.3d at 620

– 21; Portalatin , 900 F.3d at 383. We have jurisdiction over this appeal in its entirety

.No. 2 1-3101 11

III We review a district court’s decision to deny a preliminary injunction for abuse of discretion. Life Spine, Inc. v. Aegis Spine, Inc. , 8 F.4th 531, 539 (7th Cir. 2021). “Absent legal or factual errors, we afford ‘great deference’ to the court ’ s decision.” Id

. (citation omitted); see also Stuller, Inc. v. Steak N Shake Enters., Inc. , 695 F.3d 676, 678 (7th Cir. 2012) (same)

. Within this context, the district court’s legal conclusions are reviewed de novo, and its findings of fact are reviewed for clear error. Stuller, Inc. , 695 F.3d at 678. To obtain a preliminary injunction, the moving party must show that it is likely to suc ceed on the merits, that it has no adequate remedy at law, and that it will suffer irreparable harm in the absence of an injunction

. Life Spine , 8 F.4th at 539. The moving part y ’s likelihood of prevailing on the merits must exceed “a mere possibility of su ccess.” Id . at 540 (quoting Ill. Republican Party v. Pritzker , 973 F.3d 760, 762 (7th Cir. 2020) ). A finding of irreparable harm to the moving party, if the injunction is denied, is “a threshold requirement for granting a preliminary injunction.” Id

. at 545 ; Foodcomm Int’l v. Barry , 328 F.3d 300, 304 (7th Cir. 2003). Harm is irreparable if legal remedies available to the movant are inadequate, meaning they are seriously deficient as compared to the harm suffered. Life Spine , 8 F.4th at 545. Because irreparable harm is a threshold requirement for granting injunctive relief, we first analyze whether the dis trict court erred in concluding Arrive had not shown irreparable harm. If the district court did not err in that respect, it was within its discretion to deny the requested injunction. See Lawson Prod s ., Inc. v. Avnet, Inc. , 782 F.2d 1429, 144 0–41 (7th Cir. 1986) ( affirming the district court ’ s denial of a12 No. 2 1-3101

preliminary injunction based on the absence of irreparable harm alone ).

Arrive offers two reasons for why it faces irreparable harm in the absence of an injunction. First, it contends the lost sales and business opportunities arising from the individual defendants’ alleged breaches of their restrictive covenants are incalculable. Second, Arrive submits that the individ ual defendants’ use of its confidential information is a separate , independent form of irreparable harm. After consider ing these arguments , we discuss the imp act of Arrive’s failure to request the deletion of allegedly confidential information on its assertion of irreparable harm

. A. Lost Profits and Lost Opportunities Arrive argues that lost sales, which are traceable to employees’ violations of restrictive covenants , invariably qualify as irreparable harm to the former employer. In support of its argument, Arrive relies primarily on Hess Newmark Owens Wolf, Inc. v. Owens , 415 F.3d 630 (7th Cir. 2005) , and Turnell v. CentiMark Corp. , 796 F.3d 656 (7th Cir. 2015). The defendants counter that lost sales generally do not constitute irreparable harm, particularly where business records enable the plaintiff corporation to calculate the amount of lost sales. According to the defendants, the record contains more than enough evidence to support the district court’s fact ual finding that money damages could compensate Arrive for lost sales attributable to the ir actions

. Our court recently observed that “harm stemming from lost customers or contracts may be quantifiable if the lost customers or contracts are identifiable.” Life Spine , 8 F.4th at 546. T he district court noted that Traffic Tech identifiedNo. 2 1-3101 13

thirteen discrete customers who had contact wi th the individual defendants and provided sales to Traffic Tech ; two of those customers transferred business to Traffic Tech for

reasons conceded to be unrelated to any violation of the restrictive covenants at issue

. For the remaining eleven customers, th e district court found the technology and recordkeeping capabilities of Arrive and Traffic Tech would make it “a straightforward process to calculate whether sales volumes of any of the eleven businesses moved from Arrive and to Traffic Tech.” Where an ap pellant’s argument for reversing a district court’s ruling on a preliminary injunction motion concerns a factual finding, the appellant must meet the demanding clear

error standard. See id . at 539, 541 –42. T he pertinent question is whether the district court clearly erred in finding that the customers at issue, and Arrive’s lost sales and profits with respect to those customers, were identifiable. Yet on appeal, Arrive does not show the district court erred, much less clearly erred, in making th ese finding s. Arrive fundamentally fails to engage with the district court’s analysis. The company does not discuss the eleven discrete customers identified by Traffic Tech and the district court . N or does it meaningfully explain why th e court was wrong to reason that the differences in sales

— between the periods before and after the individual defendants left Arrive and joined Traffic Tech

— could easily be calculated.

T he two cases on which Arrive rel ies , Hess Newmark and Turnell , are inapposite . Here, the parties can identif y the eleven customers and calculate the extent to which they shifted their business from Arrive to Traffic Tech following the individual defendants’ departure from Arrive

. In Hess14 No. 2 1-3101

Newmark , a principal in a movie

- promotion firm violated her restrictive covenant by diverting business opportunities to the firm’s rival and assisting the rival in setting up new offices. 415 F.3d at 631 –32. This court held that the harm to the firm was irreparable because “[c]ompetition changes probabilities ” such that “ [the firm] will not be able to identify which contracts slipped from its grasp.” Id . at 632 –33. But here, probabilities are not at issue because the parties w ere able to identify the eleven customers which had transferred specific volumes of business from Arrive to Traffic Tech. Thus, Hess Newmark does not assist Arrive

. I n Turnell , a high

- level executive in the commercial

roofing business (Turnell) accepted a position with a competitor after his employer fired him. By accepting the new position and soliciting customers on behalf of his former employer’s competitor , Turnell violated his restrictive
covenant s. See 796 F.3d at 659– 60. The district court entered a relatively narrow preliminary injunction, id . at 660

– 61, and this court found no abuse of discretion and affirmed. Id . at 662, 667. Importantly, even after Turnell appeal ed , “[n]either party ha[d] quantified” the harm to the former employer stemming from lost customer relationships and proprietary information. Id . at 666. By contrast, both Traffic Tech and the district court have posited a straightforward method for quantifying the financial harm to Arrive that is traceable to the individual defendants’ allegedly wrongful solicitation of the eleven at

- issue customers. Arrive has not meaningfully contested the quantifiability of those losses. Turnell is thus also not o n point

. Further, Arrive submits that it suffers irreparable harm because it loses “a potential opportunity” whenever aNo. 2 1-3101 15

prospective customer speaks with the individual defendants and Traffic Tech, rather than Arrive, about potentially handling a shipment. According to Arrive, this harm is impossible to quantify

— and thus irreparable

— as it includes the loss of opportunities to bid on shipments that are ultimately not handled by either Arrive or the defendants

. The defendants respond that Arrive forfeited this “lost opportunities” argument, which they also contend is incorrect on the merits

. T he defendants are correct that Arrive forfeited its argument regarding lost opportunities. Issues and a rguments raised for the first time on appeal are forfeited, as are arguments that are not sufficiently developed. Scheidler v. Indiana , 914 F.3d 535, 540 (7th Cir. 2019); see also Jarrard v. CDI Telecomms., Inc. , 408 F.3d 905, 916 (7th Cir. 2005) ( requiring citation to relevant authority and meaningful argument to defeat forfeiture). Though Arrive briefly mentioned the word “opportunities” in its motion for injunctive relief, it did not cite pertinent authority (such as Hess Newmark ) or offer any meaningful reasoning relating to the argument it now advances.
E ven if th is argument had not been forfeited, lost opportunities cannot support a showing of irreparable harm under the circumstances presented here

. The type of harm Arrive alleges would ultimately trans late into lost profits, albeit indirectly, as in the end there is no economic value to opportunities that are not converted to sales . R esist ing this reasoning , Arrive points to the deposition testimony of its corporate representative, Scott Sandager. But S andager merely offered the conclusory statement that “every time Lindsey [ Scott] talks to a shipper that we’ve walked through,16 No. 2 1-3101

could be an opportunity where previously they would have talked to Arrive. So it’s really very challenging to indicate that.” This testimony reflects an inadmissible legal conclusion which restates the legal argument Arrive now advances

. 3 Sandager’s testi mony does not serve as competent evidence that explain s how lost opportunities , which do not ultimately translate into agreements to handle shipments, could qualify as irreparable harm traceable to the defendants’ actions.
A district court is within its di scretion to find an adequate remedy at law, and thus no irreparable harm, where the corporation seeking injunctive relief can reasonably estimate the value of its lost profits. Lawson Prods. , 782 F.2d at 1440. Arrive does not dispute that it can reasonably estimate the value of profits it lost from the business the eleven customers
at- issue transferred to Traffic Tech . T he district court was therefore within its discretion to conclude monetary damages were an adequate remedy at law.

B. Use of Confide ntial Information Arrive also asserts that, beyond lost sales and profits, the defendants’ use of Arrive’s confidential information itself qualifies as irreparable harm. For that proposition, Arrive cites only two district

- court cases: Aon PLC v. Infinite Equity, Inc. , 2021 WL 4192072 (N.D. Ill. Sept. 15, 2021), and Vendavo, Inc. v. Long , 397 F. Supp. 3d 1115 (N.D. Ill. 2019). Like here, those cases involved claims for breach of contract and misappropriation of trade secrets brought by corporations against former employee s and th eir new employers

. In

3 Cf. Good Shepherd Manor Found., Inc. v. City of Momence , 323 F.3d 557, 564 (7th Cir. 2003) (observing that a witness’s testimony “ as to legal conclusions that will determine the outcome of the case is inadmissible ” ).No. 2 1-3101 17

finding that a likelihood of irreparable harm had been shown , both courts reasoned it would not be possible to determine the costs the plaintiff company incurred

— or the defendant company avoided

— to learn about client needs and preferences. Aon , 2021 WL 4192072, at *2 6–28 ; Vendavo , 397 F. Supp. 3d at 1144. To begin, Arrive argues as though Aon and Vendavo are binding authority on this court, which of course they are not. A district court ’s decision “ does not have stare decisis effect; it is not a precedent .” Midlock v. Apple Vacations W., Inc. , 406 F.3d 453, 45 7 (7th Cir. 2005) (citations omitted) . “ It may be a wise, well

- reasoned decision that persuades by the quality of its reasoning, but ... [t]he fact of such a decision is not a reason for following it.” Id

. at 458. We consider whether Aon and Vendavo are on po int and persuasive on the proposition for which Arrive cites them.

Aon differs from this case in an important respect . There, the court relied on factual findings about the risk of “a complete loss” of client relationships in concluding that the defendants’ use of confidential client information supported a finding of irreparable harm. 2021 WL 4192072, at *27 (citing Foodcomm , 328 F.3d at 304)

. But t here is no evidence to support a complete loss of Arrive’s client relationships

. Arrive makes

no s uch allegation.

Vendavo is not entirely on point either. T he trial court’s finding of irreparable harm there rested on its assessment that the former employee’s new position would result in the “inevitable disclosure ” of trade secrets. 397 F. Supp. 3d at 114 2, 1144

. By contrast, here the trial court examined the record and found Arrive had not sufficiently shown that any18 No. 2 1-3101

of its proffered categories of information qualified as trade
secrets. M oreover, the evidence before us does not support any assertion of the inevitable disclosure of trade secrets because the individual defendants’ jobs at Traffic Tech were management

- level positions for which their responsibilities differ ed significantly from those they had at Arrive. Jus t because the individual defendants remained in the third

party logistics industry does not mean they w ould inevitably disclose trade secrets.

To the extent the courts in Aon and Vendavo concluded or suggested that a former employee’s use of confidential information is independently sufficient to support a finding of irreparable harm, we decline to adopt that analysis. Regardless of what costs were incurred or avoided in the past, a future threat of irreparable harm must exist to warrant injunctive relief. See Lawson Prods. , 782 F.2d at 1440 –41. That is, the mov ant must show it “will suffer” irreparable harm in the absence of an injunction

. Stuller, Inc. , 695 F.3d at 678. In

some c ases , a former employee’s use of a n employer’s confidential information could support a finding of irreparable harm to the former employer . B ut there must be a causal mechanism to support such a finding. For instance, in

a typical dispute of this sort , the former employee’s use of confidential information could harm the employer by causing

a loss of profits or customer relationships. In such a case , the employer must show the lost profits or lost customer relationships cannot be calculated with any rea sonable degree of certainty. See, e.g., Life Spine , 8 F.4 th at 545–46. As just discussed, the only mechanism Arrive posits for how the individual defendants’ use of Arrive’s confidential information could give rise to future irreparable harm isNo. 2 1-3101 19

through los t sales and profits. Yet , those lost sales and profits relate to eleven identifiable customers, and they can be quantified using a straightforward process

. So, Arrive’s lost sales and profits do not support a finding of irreparable harm.

For these reasons , t he district court was within its discretion to conclude that Arrive had an adequate remedy at law and would suffer no irreparable harm in the absence of an injunction. Because that “threshold requirement” for injunctive relief was not met, Life Spine , 8 F.4th at 545, the district court did not abuse its discretion in deny ing the requested preliminary injunction. 4 See Lawson Prods. , 782 F.2d at 1440–41.

C. Arrive’s Failure to Protect its Information

Arrive contends the defendants’ use of its confidential information requires a finding of irreparable harm, and it argues the di strict court clearly erred in concluding otherwise. But the company’s conduct upon the individual defendants’ departure s tells a different story. Because of policies that Arrive put in place at the onset of the pandemic, the individual defendants had access to the Accelerate platform on their personal devices. T hus , as a result of Arrive’s business decisions, the individual defendants were able to use their personal devices to retrieve and download the categories of information the company categorizes as trade secrets

. Arrive does not contest this.

4 T he parties disagree about whether the district court erred in concluding that Arrive was not likely to succeed on the merits of its claims for breach of contract against the individual defendants . We do not address that dispute because we resolve this case on other grounds

.20 No. 2 1-3101

Nevertheless, a human resources manager conducted exit interviews of Scott, Mayer, Hernandez, and Hoffman without asking them to produce their personal devices for inspection , state whether they had company data on those devices , or remove company data. D efendants also maintain that they were willing to return or destroy the information Arrive characterizes as confidential, but they were unable to do so because of a litigation hold. Arrive failed to take basic steps to prevent the individual defendants from possessin g its purportedly confidential information . So, the company’s claim that their possession qualifies as irreparable harm rings hollow. Arrive could have prevented the claimed harm by taking greater care in executing information

- security procedures prior to , or immediately fo llowing , the termination of the individual defendants’ employment. 5 Even though Arrive failed to do so, the defendants have offered the company the opportunity to remedy the harm by turning over or destroying the information at issue

. Arrive has evidently refused that offer. Accordingly , it cannot show

5 As the district court noted, to succeed on a claim for misappropriation of trade secrets , a company must take reasonable measures to protect the secrecy of its information. This requirement is codified within the D efend T rade S ecrets A ct as part of the definition of the term “trade secret .” 18 U.S.C. § 1839(3)(A)

. Courts evaluate the question of whether efforts to keep information confidential were sufficient “on a case

- by

- case basis, considering the efforts taken and the costs, benefits, and practicalities of the circumstances.” Tax Track Sys. Corp. v. New Inv. Wor ld, Inc. , 478 F.3d 783, 787 (7th Cir. 2007); see also Rockwell Graphic Sys., Inc. v. DEV Indus., Inc. , 925 F.2d 174, 179

– 80 (7th Cir. 1991). I n some circumstances, judgment as a matter of law for defendants is appropriate because it is “ readily apparent th at reasonable measures simply were not taken. ” Tax Track
, 478 F.3d at 787. T his could be such a case , considering the facts

.No. 2 1-3101 21

irreparable harm arising from the defendants’ alleged use of the information claimed to be conf idential.

IV

Arrive focuses primarily on the district court’s denial of injunctive relief on its claims for breach of contract and , to a lesser extent , its claims for misappropriation of trade secrets. Although the absence of irreparable harm independently precludes Arrive from obtaining a preliminary injunction based on those claims, for completeness we also consider whether the district court abused its discretion in balancing the relative harms. We discuss Arrive’s tortious interference claims as well

. A. Balancing of Harms If the movant makes the required threshold showing s of irreparable harm and a likelihood of succ ess on the merits, the court then weighs “the irreparable harm the moving party will endure if the preliminary injunction is wrongfully denied versus the irreparable harm to the nonmoving party if it is wrongfully granted” and “the effects, if any, that th e grant or denial of the preliminary injunction would have on nonparties.” Turnell , 796 F.3d at 662 (citations omitted). Under this “sliding scale” approach, “the more likely [the moving party] is to win, the less the balance of harms must weigh in his fav or; the less likely he is to win, the more it must weigh in his favor.” Id

. Unless the district court’s legal conclusions were incorrect or its findings of fact were clearly erroneous, we afford the court’s ultimate decision “great deference .” Life Spine , 8 F.4th at 539 ; Speech First, Inc. v. Killeen , 968 F.3d 628, 638 (7th Cir. 2020).22 No. 2 1-3101

I n balancing the harms here, the district court reasoned that Arrive would potentially suffer moderate financial harm

— much of which had already occurred by the time the preliminary injunction motion was ripe for decision

— if the injunction were denied. On the other hand, the court believed the individual defendants “would be heavily harmed” because they would have to cease their work with Traffic Tech if an injunction were issued . Thus, the court concluded that the balance of harms favored the denial of injunctive relief, “particularly as there is a low likelihood of success on the merits” of Arrive’s claims for breach of contract and misappropriation of trade secrets. On appeal, Arrive asserts the district cour t abused its discretion when balancing the harms. According to Arrive, the court failed to sufficiently acknowledge the possibility that Traffic Tech could have assigned the individual defendants to work “ outside of the continental United States, ” or it co uld have exclusively allocated them tasks related to “service offerings that Arrive does not provide its customers.” That argument does not persuade. It would be highly impractical for the individual defendants to work for Traffic Tech outside the continental United States , so the district court did not abuse its discretion when it did not seriously consider th at possibility

. Similarly, the record belies Arrive’s assertion that the requested injunction would not have put the individual defendants out of work since they could have been employed with Traffic Tech in a different capacity. U pon joining Traffic Tech , the individual defendants had management

- level responsibilities, whi ch were quite different from those they held at Arrive. N evertheless , ArriveNo. 2 1-3101 23

sued them

. And during this litigation Arrive has attempted to emphasize any minor or tangential similarities in job duties. This indicates the district court was correct to conclude that the injunction Arrive requested would have functionally rendered the individual defendants unemployed. Arrive required the individual defendants to sign broad restrictive covenants. While litigating this cas e , Arrive has taken aggressive positions that, if accepted, would strain the limits of those contracts

. We do not rule on whether the restrictive covenants are enforceable. Yet, when balancing the relative harms, the district court was well within its disc retion to consider and weigh the deleterious effects that an injunction enforcing the restrictive covenants against the individual defendants would impose on them. See Life Spine , 8 F.4th at 546 (affirming the district court’s balancing of harms).

Nor do A rrive’s other arguments about the district court’s balancing of harms fare any better. The company contends the court abused its discretion by noting Arrive had already suffered much of its claimed economic harm by the time the court decided its motion. But Arrive cites no authority for the proposition that a trial court may not consider whether harm to the movant has already occurred, as opposed to having the potential to occur in the future. To the contrary, the court’s interpretation is consistent with our case law requiring a party moving for injunctive relief to show it “will suffer” irreparable harm in the absence of such relief

. Speech First , 968 F.3d at 637; Stuller, Inc. , 695 F.3d at 678. And again, Arrive can not rely on the defendants’ alleged

u se of confidential information to show irreparable harm24 No. 2 1-3101

when that purported harm would not have been possible but for the company’s own carelessness . Arrive failed to take basic steps to ensure that the individual defendants would not have access to confidential information after their employment, and it has declined their offer to return or destroy such information during this litigation. These weaknesses in Arrive’s assertion of irreparable harm further support the conclusion that the district court acted within its discretion in balancing the relative harms. Our decision today does not foreclose Arrive’s ability to recover from the individual defendants. Under the 2020 –21 employment agreements, Arrive’s claims against the individual defendants are s ubject to arbitration. Those proceedings are currently pending, and the merits of the disputes will be resolved in that forum. Before the arbitrator, Arrive will have ample opportunity to offer proof as to the extent of the economic harms it has suffered. But given the balance of harms, the district court was within its discretion
to deny injunctive relief

. B. Tortious Interference Claims Finally, we assess Arrive’s claims for tortious interference. Two sets of claims are at issue: tortious interference with current and prospective economic advantage (against all defendants) and tortious interference with contract (against Traffic Tech). These claims were pleaded in the Second Amended Complaint, and briefed in Arrive’s preliminary injunction motion, but they were not decided by the district
court. The district court did not give a reason why it did not address these claims, nor have we located such a reason in the record

.No. 2 1-3101 25

Although the district court should have decided Arrive’s tortious interference claims , this omission does not alter our decision to affirm the denial of the preliminary injunction for
two reasons. First, in advancing the se claims , Arrive alleges the same type of harm as with its breach of contract and trade

sec rets claims

— lost profits, diminished customer relationships , and the use of Arrive’s confidential information

. Because those harm s are not irreparable, for the reasons previously discussed, the district court did not abuse its discretion by declining to is sue an injunction to halt the alleged tortious interference. Second, the district court carefully balanc ed the harms. Under that balancing analysis, the district court was within its discretion to den y an injunction to preserve the individual defendants’ ability to earn a living.
The tortious interference claims against the individual defendants, then, are likewise subject to arbitration under the 2020– 21 employment agreements. Still , this does not pre clude Arrive from recovering monetary damages against Traffic Tech.

V We have jurisdiction to hear this appeal from the denial of a motion for a preliminary injunction . T he entire appeal presents a live controversy because under Texas law , the district court had equitable authority to extend the terms of the individual defendants’ restrictive covenants.
Arrive has failed to meet the threshold requirement of irreparable harm. The district court did not err in concluding that lost sales and profits , which allegedly resulted from the defendants’ wrongful conduct , could be compensated26 No. 2 1-3101

through monetary damages. Nor did Arrive show irreparable harm through lost opportunities or the individual defendants’ use of confidential information, both of which are harms that would ultimately manifest in the form of calculable lost sales and profits. Thus, there was no irreparable harm, and the district court was correct to deny the requested i njunction. Further, e ven if Arrive had shown irreparable harm, the trial court did not abuse its discretion in balancing the relative harms. For these reasons, we A FFIRM the district court’s denial of the motion for a preliminary injunction.