UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

________________ _________________ KEYBANK NATIONAL ASSOCIATION, Plaintiff - Appellant,

v. CHARLES H. WILLIAMS; TIMOTHY WELDON, Defendants - Appellees. No. 20-1384 (D.C. No. 1:19-CV -03714-CMA-SKC) (D. Colo.)

________________ _________________ ORDER AND JUDGMENT *

________________ _________________ Before HARTZ , McHUGH , and CARSON , Circuit Judges.

________________ _________________ This is an appeal from the denial of a preliminary injunction in a business tort case. KeyBank National Association (KeyBa nk) sued two of it s former employees, Charles Williams and Timothy Weldon (Appellees), after they left KeyBank to work for a competitor, Newmark Knight Frank. KeyBank alleged that Appellees breached their non-compete agreements and used its trade secrets and confidential information to divert business from KeyBank to Newm ark. KeyBank moved for a preliminary

* After examining the briefs and appella te record, this pa nel has determined unanimously that oral argument would not ma terially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctr ines of law of the case, res judicata, and collateral estoppel. It may be cite d, however, for its persuasi ve value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### February 10, 2022 Christopher M. Wolpert Clerk of Court Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 12 injunction to prevent Appellees from doing business with and soliciting KeyBank’s customers and misappropriating its trade secr et and confidential information. The district court denied the mo tion, concluding KeyBank fail ed to show a probability of irreparable harm. KeyBank now appeals th at order. The un derlying litigation is ongoing, but we have jurisdiction under 28 U. S.C. § 1292(a)(1) to review the district court’s denial of the preliminary injunction motion. We affirm.
BACKGROUND Appellees worked in KeyBank’s Commerc ial Real Estate Division until they resigned in January 2019 and immediatel y began working for Newmark. While employed with KeyBank, they each signe d confidentiality agreements prohibiting them from disclosing any KeyBank trade se crets and providing that upon termination of their employment, they would return all documents, data, and information containing trade secrets. In addition, at numerous times during their employment, they received restricted st ock awards for their performa nce. To accept the awards, they electronically accepte d the terms and conditions contained in stock award agreements, including non-compete provisi ons prohibiting them from soliciting or doing business with any existing or prosp ective KeyBank customer they interacted with or learned of during the course oftheir employment at KeyBank. The noncompete agreements expired in January 2020— one year after the te rmination of their employment with KeyBank. Before accepting the job with Newmark, Williams emailed Newmark to facilitate the determination of the sign- on bonus Newmark woul d offer to Williams Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 23 and Weldon. Williams’s email included in formation regarding his, Weldon’s, and a colleague’s production at KeyBank. He initially emailed Newmark PDFs of production data he had copied and pa sted from KeyBank’s 2016, 2017 and 2018 Pipeline Reports. These reports, which we re maintained in Excel spreadsheets, contained statistical and fi nancial data on mortgage-sp ecific transactions involving numerous KeyBank clients. According to KeyBank, the Pipeline Reports contain confidential and trade secret data. The PDFs Williams sent Newmark did not include all of the information on th e spreadsheet. He later gave Newmark the Pipeline Reports in an Excel spreadsheet so it could more easily tr ansfer the information into its system for purposes of determining the sign-on bonus amounts. Williams attempted to hide numerous columns on th e spreadsheet so only those from the PDF were revealed in the spreadsheet he gave Newmark. But the hidden columns could be unhidden, meaning he unwittingly ga ve Newmark KeyBank’s full Pipeline Reports. Appellees both knew the Pipe line Reports were confiden tial and were not to be shared outside of KeyBank. They mainta ined that they did not know there was hidden information in the spreadsheets until it was discovered during the course of the litigation. They also maintained that no one at Newmark knew about or saw any of the hidden information. During their initial nineteen mont hs of working at Newmark, Appellees closed seven deals involving KeyBank clients. KeyBank filed its complaint in Decem ber 2019, alleging that Appellees violated their non-compete and confidentia lity agreements and misappropriated its Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 34 trade secrets. 1 About a month later, KeyBank filed a motion for a preliminary injunction pursuant to Fed. R. Civ. P. 65, seeking to enjoin A ppellees from (1) doing business with or soliciting any KeyB ank customers for a period of time commensurate with the duration of th eir alleged noncompliance with their non-compete agreements; and (2) misappr opriating KeyBank’s trade secret and confidential information, by, among other things, soliciting and doing business with its customers. After a hearing, the magi strate judge issued a re port and recommendation that the district court grant the motion in part and deny it in part. He found the Pipeline Reports were confidential and recommended that the court order Appellees to either return them to KeyBank or destroy th em, but he recommended that the court otherwise deny the motion because KeyB ank failed to show it would suffer irreparable injury if the in junction were denied. The ma gistrate judge gave four reasons for his irreparable-ha rm finding. First, there was no evidence Appellees had used KeyBank’s confidential information to compete with KeyBank or divert its customers to Newmark. The magistrate judge explained that KeyBank and Newmark shared common customers, Appellees clos ed only seven deals for Newmark that involved KeyBank customers, and there wa s no evidence that A ppellees used the Pipeline Reports to secure thos e deals. He also found that even if those deals were

1 KeyBank asserted claims against both defendants fo r breach of contract and misappropriation of trade secrets, and agai nst Williams for inte ntional interference with a business relationship and br each of the duty of loyalty. Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 45 the result of misappropriation or unlawful competition, any inju ry KeyBank suffered could be quantified and compensated by m oney damages after trial. The second reason the magistrate judge gave for finding no irreparabl e harm was that there was no evidence of any current or ongoing us e or misappropriation of its confidential information. Third, there was no eviden ce that KeyBank lost competitive advantage as a result of Appellees’ alleged unlaw ful competition or misappropriation of confidential information—it continued to do business with the cu stomers involved in the deals Appellees closed fo r Newmark, and by at least one measure, its industry ranking was below Newmark’s in 2018 but jumped ahead in 2019. Finally, the magistrate judge found that KeyBank’s dela y in seeking the injunction undercut its irreparable-harm claim. He noted that KeyBank learned of Appellees’ possible breach of their non-compete and trade secret agreements in early to mid-2019 but did not file suit until December 2019 and did not seek inj unctive relief until January 2020—a year after Appellees left KeyBank and just days before their restricted periods expired. Considering KeyBank’s objections to the report and recommendation and reviewing the question de novo, see 28 U.S.C. § 636(b)(1), the district court adopted the magistrate judge’s fact ual findings and agreed that KeyBank failed to show irreparable harm. Specifically, the court c oncluded that KeyBank’s alleged harm was “inherently theoretical,” no ting that it argued in its objections that the threat of Appellees’ solicitation of its customers or use of its confidential information warranted injunctive relief, but it pres ented no evidence that Appellees were Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 56 “currently using or misappropria ting” that information. R. , vol. II at 301. The court also agreed with the magistra te judge that KeyBank’s dela y in seeking relief “heavily weighs against the issuance of a preliminar y injunction,” because waiting to seek an injunction until one year after Appellees st arted working for Newmark and just days before their non-compete provisions expi red showed no “sense of urgency.” Id. at 302 (emphasis and internal quotation marks omitted). Based on its determination that KeyBank failed to show irreparable harm, the court denied the preliminary injunction mo tion in its entirety, including the request that Appellees be ordered to return or destroy the Pipeline Reports.
DISCUSSION KeyBank contends the district cour t’s irreparable-harm determination constitutes an abuse of discretion because (1) the court disreg arded evidence that KeyBank suffered actual and unquantifiable injury in the form of diminished customer relations, goodwill, and competitiv e standing; and (2) the record does not support the finding that KeyB ank delayed seeking relief. KeyBank also challenges the district court’s rejection of the ma gistrate judge’s r ecommendation to order Appellees to return or de stroy the Pipeline Reports. Legal Standards “We review the decision to deny a motion for a preliminary injunction for abuse of discretion.” Schrier v. Univ. of Colo. , 427 F.3d 1253, 1258 (10th Cir. 2005). A district court abus es its discretion when its decision “is premised on an erroneous conclusion of law or where there is no rational basis in the ev idence for the Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 67 ruling.” First W. Cap. Mgmt. Co. v. Malamed , 874 F.3d 1136, 1140 (10th Cir. 2017) (internal quotation marks omitted). We review the district court’s factual findings for clear error and its legal conclusions de novo. Id. at 1140-41. “The district court’s discretion in this context is necessarily broad and a strong showing of abuse must be made to reverse it.” FTC v. Accusearch Inc. , 570 F.3d 1187, 1201 (10th Cir. 2009) (internal quotation marks omitted). A preliminary injunction “is an extrao rdinary remedy” that may be granted only when “the right to relief [is] clear and unequivocal.” Schrier , 427 F.3d at 1258 (internal quotation marks omitted). To obtai n an injunction, the moving party must show it “will suffer irreparable injury if the injunction is denied.” First W. Cap. Mgmt. Co. , 874 F.3d at 1141 (internal quotati on marks omitted). “To constitute irreparable harm, an injury must be certa in, great, actual and not theoretical.” Schrier , 427 F.3d at 1267 (interna l quotation marks omitted). The burden of showing irreparable harm is not “an easy burden to fulfill.” Dominion Video Sat ellite, Inc. v. Echostar Satellite Corp. , 356 F.3d 1256, 1262 (10th Ci r. 2004) (internal quotation marks omitted). The purpose of a preliminary injunction is to “preserve the relative positions of the parties until a trial on th e merits can be held,” Schrier , 427 F.3d at 1258 (internal quotation marks omitted), “ not to remedy past harm,” id. at 1267. Thus, the movant must demonstrate “a significant risk” that it will experience futu re harm that “cannot be compensated after the fact by money damages.” First W. Cap. Mgmt. Co. , 874 F.3d at 1141 (internal quotation marks omitted). In determining whether the Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 78 movant has shown irreparable harm, a distri ct court may consider “the difficulty in calculating damages” and the “e xistence of intangible harm s such as loss of goodwill or competitive market position.” Dominion Video , 356 F.3d at 1264. Harm to goodwill can be irreparable even where th e party seeking relief has not lost the customer entirely. See Sw. Stainless, LP v. Sappington , 582 F.3d 1176, 1191-92 (10th Cir. 2009). But economic loss, incl uding the loss of busin ess, “usually does not, in and of itself, cons titute irreparable harm.” Port City Props. v. Union Pac.
R.R. Co. , 518 F.3d 1186, 1190 (10th Cir. 2008) (internal quotation marks omitted); see also First W. Cap. Mgmt. Co. , 874 F.3d at 1140, 1143 (c oncluding district court abused its discretion by gr anting preliminary injuncti on despite finding that any damages caused by former employee’s use of pl aintiff’s client list to solicit its clients would be quantifiable and that money dama ges “would adequately make the company whole” (brackets and internal quotation marks omitted)). Application As an initial matter, we acknowledge Appellees’ argument that even if KeyBank could establish irrepa rable injury, it could not obtain the injunctive relief sought—essentially, an extension of thei r expired restrictive periods under the non-compete agreements. Addressing this argument would require us to resolve choice-of-law and enforceability issues that the parties continue to disagree about in the underlying litigation and that KeyBank cont ends we lack jurisdiction to decide because the district court did not address th em in the preliminary-injunction order. Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 89 We need not resolve any of these issues, however, becau se we find no abuse of discretion in the district court’ s irreparable-harm determination. 2
1. Intangible Injury KeyBank first contends th e district court’s finding th at any injury it suffered was either theoretical or could be compensated by money damages ignores KeyBank’s evidence that it su ffered intangible injury in the form of diminished customer relationships, goodwill, and compe titive standing. In support, it relies primarily on evidence it cont ends establishes that Appe llees took and had unfettered access to the Pipeline Reports , solicited and closed deal s with KeyBank customers, and continue to use KeyBank’s confiden tial information to divert business to Newmark. KeyBank says “[n]one of this is theoretical. It was real.” Aplt. Opening Br. at 37 (emphasis omitted). But the que stion is not whethe r Appellees’ alleged wrongful conduct was real or theoretical . The question is whether their conduct caused and will continue to cau se actual injury that ca nnot be compensated with money damages. See Dominion Video , 356 F.3d at 1263-64 (recognizing that irreparable harm “do[es] not automatically ” arise from the breach of exclusivity, non-compete, and non-disc losure agreements).

2 The choice-of-law and enforceability issues go to whether KeyBank can show a likelihood of success on the merits —a preliminary injunction factor the district court did not need to reach af ter concluding KeyBank failed to show irreparable harm. See First W. Cap. Mgmt. Co. , 874 F.3d at 1141 (explaining that “because a showing of proba ble irreparable harm is the single most important prerequisite for the issuance of a prelimin ary injunction, the moving party must first demonstrate that such inju ry is likely before the other requirements will be considered” (internal qu otation marks omitted)). Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 910 KeyBank’s insistence th at Appellees’ past conduc t and continued possession of the Pipeline Reports necess arily cost it future busines s and goodwill that cannot be measured is insufficient to establ ish the requisite irreparable harm. See id. at 1264-
65 (district court abused its discretion in granting preliminary injunction where it found irreparable harm based solely on de fendant’s breach of exclusivity agreement and rejected plaintiff’s assertions that it was losing customers, competitive position, and goodwill). And contrary to KeyBank’s contention that the di strict court ignored its evidence and arguments, th e record shows that the c ourt considered KeyBank’s evidence and was simply not persuaded by its argument that it would suffer irreparable injury absent injunctive relie f. The court fou nd no evidence that Appellees are using KeyBank’s confidential information to solicit its customers and divert business to Newmark or that KeyBank has suffered or will suffer lost goodwill or competitive standing. KeyBank’s di sagreement with those findings does not establish that the court ignored KeyBank’s evidence or that its findings are clearly

erroneous. Nor does KeyBank’s disagreement w ith the court’s ruling support the contention that the court “ignor e[d] binding” precedent, Aplt. Opening Br. at 36. Our precedent recognizes that the loss of comp etitive standing or goodwill can give rise to irreparable injury. Bu t “not all plaintiffs who have already suffered lost customers, stolen trade secrets, or intangi ble injury can show a sufficient probability of future irreparable harm to wa rrant a preliminary injunction.” DTC Energy Grp., Inc. v. Hirschfeld , 912 F.3d 1263, 1271 (10th Cir. 2018). The district court Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 1011 concluded that KeyBank faile d to make that showing, and we find no abuse of discretion in its determination. See id. at 1271-73 (affirming denial of preliminary injunction based on loss of customers, loss of goodwill, and er osion of competitive position where plaintiff “did not establish a probability of future irreparable harm” and the prior loss of customers and “gener al decline of [pla intiff’s] value as a business can be quantifie d in money damages”); Schrier , 427 F.3d at 1267 (affirming denial of preliminary injunction even tho ugh plaintiff alleged irreparable harm from “loss of prestige, academic reputation[,] [and] professional oppor tunities,” because it failed to identify “evidence in the record showing actua l or significant risk” that those harms would occur in the future). The fact that Appellees’ non-compet e and trade secret agreements acknowledge that a breach “m ay cause serious damage and irreparable injury” supporting a claim fo r injunctive relief, see R., vol. II at 289-90 (internal quotation marks omitted), does not require a differen t result. The parties’ recognition that irreparable harm could occu r does not mean it did.
2. KeyBank’s Delay in Seeking Relief KeyBank next takes issue with the dist rict court’s finding that its delay in seeking injunctive relief undercut its irrepara ble-harm claim. It disagrees with the court’s finding that it learned of Appell ees’ possible breach of their noncompete and trade secret agreements in ear ly to mid-2019, insisting it “received the first concrete evidence that Williams had breached his re strictive covenant” in September 2019. Aplt. Opening Br. at 43. But the record indicates that KeyBan k believed Weldon was Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 1112 contacting KeyBank customers as early as February 2019, and it sent both Appellees correspondence in September and Octobe r reminding them of the restrictive covenants and obligations to KeyBank, yet waited several more m onths to file suit and seek a preliminary injunction. The dist rict court’s factual finding that KeyBank delayed seeking relief was thus not clearly erroneous. Contrary to KeyBank’s contention, the district court did not find that KeyBank’s delay was fatal to its irreparable-harm claim. Rather, the court held that KeyBank’s failure to seek reli ef earlier was inconsistent with its irreparable-injury claim and was one of several factors that weighed agains t issuing an injunction. Delay in seeking relief does not conclusively refute a showing of irreparable harm, but under the circumstances presented here , we find no abuse of discretion in the district court’s determinati on that waiting to file suit until a year after Appellees started working for a competitor and days before their non-compete agreements expired undermined KeyBank’s asserti on that time was of the essence. See Fish v. Kobach , 840 F.3d 710, 753 (10th Cir. 2016) (explaining that delay in seeking preliminary relief can cut agai nst finding irreparable injury); GTE Corp. v. Williams , 731 F.2d 676, 679 (10th Cir. 1984) (holding that delay in seeking an injunction can be “an important factor in de termining irreparable harm”). We are not persuaded ot herwise by the fact that KeyBank was engaged in settlement negotiations with Appellees for about three m onths before filing suit. Pursuing settlement discussions before seeking injunctive reli ef is not “fatal to [a] claim of irreparable injury.” Kan. Health Care Ass’n, In c. v. Kan. Dep’t of Soc. & Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 1213 Rehab. Servs. , 31 F.3d 1536, 1544 (10th Cir. 1994); see also RoDa Drilling Co. v. Siegal , 552 F.3d 1203, 1212 (10th Ci r. 2009) (delay in seeking an injunction “was not unreasonable and did not alter the irrepa rable harm analysis” where it stemmed from the parties’ attempts to resolve the dispute, not pl aintiff’s “decision merely to sit on its rights” (internal quotation marks omitted)). Bu t it was not unreasonable for the district court to conclude that “the duration of the parties’ settlement efforts shows that [KeyBank] is not facing imminent and irreparable harm” because if it had been, it likely “would have immediately soug ht injunctive relief when it discovered [Appellees’] alleged wrongdoing” and before their restrictiv e covenants expired. R., vol. II at 302.
3. Return of Pipeline Reports KeyBank’s final contention is that the district court erred in rejecting the magistrate judge’s recommend ation that the motion for preliminary injunction be granted to the extent it seek s the return or destruction of the Pipeline Reports. That recommendation was based on the magistrate judge’s conclusion that the “Pipeline Reports are confidential informa tion belonging to KeyBank.” Id. at 279. But the possession of confidential information doe s not justify injunc tive relief absent a showing of irreparable harm, and because KeyBank failed to show irreparable harm, the district court properly deni ed the motion in its entirety. See First W. Cap. Mgmt.
Co. , 874 F.3d at 1143 (“Without showing irrepa rable harm, [a plai ntiff] cannot obtain a preliminary injunction.”). Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 1314 CONCLUSION We affirm the district court’s or der denying the motion for preliminary injunction. We make permanent our provisional order granting KeyBank’s unopposed motion to seal E xhibits 56, 58A, 59A, 60A, 61A, 61B, 61C and 61C1.

Entered for the Court

Joel M. Carson III Circuit Judge Appellate Case: 20-1384 Document: 010110643602 Date Filed: 02/10/2022 Page: 14