This opinion will be unpublished and may not be cited except as provided by Minn . Stat. § 480A.08, subd. 3 (201 4 ). STATE OF MINNESOTA IN COURT OF APPEALS A16 - 0010 Dexon Computer, Inc., Respondent,

vs. Modern Enterprise Solutions, Inc.,

Appellant, Timothy Durant, et al., Defendants. Filed August 1, 2016 Affirmed Jesson , Judge Hennepin County District Court File No. 27

- CV

- 15

- 17171 Scott M. Flaherty, Michael C. Wilhelm, Michael M. Lafeber, Briggs and Morgan, P.A., Minneapolis, Minnesota (for respondent) Christopher J. Harristhal , Daniel J. Ballintine, Andrew David Moran, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis, Minnesota (for appellant) John A. Fabian, Nicholas G. B. May, Fabian May & Anderson PLLP, Minneapolis, Minnesota (for defendants Timothy Durant and Andrew Uzpen) Considered and decided by Jesson , Presiding Judge; Halbrooks , Judge; and Hooten , Judge

.2 U N P U B L I S H E D O P I N I O N JESSON , Judge Appellant Modern Enterprise Solutions Inc. (MES) claims that the district court abused its discretion by granting a temporary restrainin g order . MES argues that the dis trict court’s order was based on improper evide nce. MES also maintains that respondent Dexon Computer Inc. is unlikely to prevail on its underlying claims and has failed to show that without a restraining order it will suffer irreparable harm. We affirm. FACTS Dexon buys and sells c omputer equipment . In early 2015 and for several years prior, defendants Andrew Uzpen and Timothy Durant worked as sales representatives at Dexon. In March of 2015, Uzpen ended his employment with Dexon and t ook a job with its competitor , MES . In August of 2015, Durant also left Dexon for a position with MES. At the time they left, Dexon was concerned tha t Uzpen and Durant took Dexon customer

leads list information , described further below, with them to MES. Dexon mainta ins a list of cu stomer leads that includes company names, contact information, and hardware brand preferences for actual and potential Dexon customers. Dexon purchases some of this information from Data.com, a service to which MES also subscribes. But De xon also develops the leads list through the research and networking of its employees. Dexon’s full customer

- leads list includes tens of thousands of contacts. Only a few individuals within Dexon have access to this master list. Most employees have acce ss only to a portion of the leads list and use it to solicit sales.3

The leads list is stored on the Dexon computer network, which can be accessed through computers in Dexon’s offices

. Although Uzpen and Durant dispute the extent to which these policies were enforced, Dexon maintains that it requires employees to have usernames and passw ords to access Dexon computers and that employees must use keys to access its offices. Dexon instructs employees to back

- up their customer

- leads list on personal flash d rives and take them home. Dexon has no written confidentiality policies related to the
customer

- leads list and does not require employees to sign a noncompete agreement. When Uzpen went to MES , he k ept his flash drive containing the portion of the Dexo n lead s list to which h e had access. He considered downloading this information to MES’ s customer

- leads database , but did not because it was not compa tible

. When Durant left Dexon for MES, he also had a copy of the customer

- leads list on a flash drive. Just days after leaving Dexon, Durant sent a mass email informing customers that he was moving to MES and offering to underbid open Dexon orders and quotes
. Durant admits that the email was sent to contacts on the portion of the Dexon
customer

- leads list that h e had access to. A subsequent analysis of his flash drive revealed that it contained contact information for 10,056 customers and was organized by hard ware preference. After Durant left , Dexon’s CEO , Stephen O’Neil , received a phone call fr om an anonymous MES employee on August 31, 2015 . The employee told O’Neil that Durant had stolen 11,000 customer leads from Dexon and tak en them to MES. The employee said that MES had encouraged the theft and was using the leads to steal Dexon’s4

cu stomer s. The employee also told O’Neil that Uzpen brought customer leads from Dexo n to MES

. O’Neil later received a letter from the anonymou s MES employee. The letter included copies of MES purchase orders for sales completed by Durant in the first several weeks afte r he left Dexon. Some of the purchase orders show that Durant made sales at MES to customers he ha d solicited while at Dexon. Shortly thereafter, i n September of 2015, O’Neil received a call from a forme r MES employee. The former employee al so told O’Neil that he had heard from people inside MES that Durant had stolen Dexon’s customer leads and brought t hem to MES

. In October 2015 , Dexon filed a verified complaint against MES, Uzp en, and Durant. Dexon seeks damages for mis appropriation of trade secrets and several other claims . Dexon also moved for a temporary restraining order, requesting that defendants be enjoined from “continued misappropriation of trade secrets” and other tortious activity involving use of the c ustomer

- leads list

. In December 2015 , the district court issued an order granting Dexon’s request for a temporary restrainin g order. The order prohibits MES, Uzpen, and Durant from using or disclosing any “Confidential Dexon Information,” which is defined as “any and all in formation derived from Dexon’s list of customer leads; except for that information included on the Dexon list that was already known by Defendant MES prior to obtaining the Dexon list; or was

. . . obtained by MES from the Data.com subsc ription.” The orde r also requires MES, Uzpen, and Durant to return th e information derived from the flash5

drives to Dexon and to delete any “Confidential Dexon Information” from the MES computer system or other electronic devices in their possession

. This appeal follows. D E C I S I O N A temporary restraining order is an extraordinary equitable remedy used to preserve the status quo pending adjudication of the merits of a case

. Miller v. Foley , 317 N.W.2d 710, 712 (Minn. 1982). The decision to grant a temporary restra ining order may be re versed only for a clear abuse of discretion. Carl Bolander & Sons Co. v. City of Minneapolis , 502 N.W.2d 203, 209 (Minn. 1993). The district court’s factual findings will not be set aside unless clearly erroneous. LaValle v. Kulkay , 277 N.W.2d 400, 402 (Minn. 1979). We view the facts alleged in the plea dings and affidavits in the light most favorable to the party prevailing in the district court. Pacific Equip. & Irr., Inc. v. Toro Co. , 519 N.W.2d 911, 914 (Minn. App. 1994), review denied (Minn. Sept. 16, 1994). A district court may grant a temporary restraining order if the party seeking the order establishes that monetary damages are not adequate and that denial of the order will result in irreparable harm. Cherne Indus., In c. v. Grounds & Assocs., Inc. , 278 N.W.2d 81, 92 (Minn. 1979). In evaluating whether the district cou rt abused its discretion by granting a temporary restrai ning order, we consider five factors: (1) the nature and background of the relationship between th e parties; (2) the balance of harms suffered by the parties; (3) the likelihood that the party seeking the injunction will prevail on the merits; (4) public

- policy considerations as express ed in statute ; and (5) the administrative burdens involved in judic ial supervision and enforcement of the injunction. Dahlberg Bros., Inc. v. Ford Motor Co. , 272 Minn. 264, 274

- 75, 137 N.W.2d 314, 321

- 22 (1965).6

MES argues that , in granting the temporary restraining order , the dist rict court erred by relying on Dexon’s verified c omplaint, including the statements of t he anonymous and former MES employees. MES further argues that the district court abused its discretion by determining that Dexon is likely to succeed against MES on its trade secret and other claims and asserts that Dexon failed to show that it would suffer irreparable harm in the absence of an injunction. We first address MES’s evidentiary arguments and then discuss Dexon’s likelihood of success, irreparable harm, and the remaining Dahlberg factors. A. MES’s evidentiary c laims MES argues t hat Dexon’s complaint “was not properly verified and could not support injunctive relief as a matter of law.” MES claims that a verified complaint must be based only on personal knowledge and that it is unclear what allegations in Dexon’s complaint are based on “reliable information” and what allegations are based on personal knowledge. MES further argues that the statement s of the anonymous and former MES employee s are hearsay and were improperly considered . We disagree. A temporary restraining order may be granted based solely on a complaint if the complaint makes out a sufficient case, is verified, and contains positive allegations. Minn. R. Civ. P. 65.01; Indep. Sch. Dist. No. 35 v. Engels tad , 274 Minn. 366, 369, 144 N.W.2d 245, 248 (1966). “[ E ] vidence is ‘positive’ where the witness states that a certain thing did or did not happen or ex ist .” Miller v. Hughes , 259 Minn. 53, 59, 105 N.W.2d 693, 698 (1960).7

MES cites a number of cases s tating that injunctive relief cannot be issued on facts stated on information and belief alone. See e .g. , Armstrong v. Sanford , 7 Minn. 49, 52, 7 Gil . 34, 40 (1862) . But MES’s verified complain t is not based only on information and belief. The verificat ion states that the complaint is based on O’Neil’s “personal knowledge and reliable information.” Many of the allegations in the complai nt are positive and are within O’Neil’s personal knowledge as the CEO of Dex on. For example, O’Neil would have personal knowledge of when Uzpen and Durant were employed at Dexon; of Uzpen and Durant’s job duties and access to the customer

- leads list while at Dexon; and of how Dexon develops, stores, and uses c ustomer

- lead information

. O’Neil also perso nally received the mass email Durant sent to Dexon customers shortly after leaving for MES. Furthermore, as the district court noted, many of the allegations in the complaint are supported not just by the complaint but also by the affidavits of Uzpen an d Durant. Both Uzpen and Durant admitted that they left Dexon for MES and that they took flash drives with t hem containing Dexon’s customer

- leads list. Durant admits that he sent out the ma ss email using Dexon’s customer

- leads list . Durant also admits t hat he solicited business f

rom customers while at MES that he had previously worked with at Dexon . In addition, sales Durant made to Dexon customers shortly after leaving Dexon are catalogued in the purchase orders attached to the complaint. MES’s argu ment s that the district court erred by relyin g on the statements of the anonymous MES employe e and the former MES employee are also unavailing . Even if this information is hearsay, given the haste with which preliminary

- injunction decisions8

must be made, the United States Supreme Court has said that an injunction is “customarily granted on the basis of procedures that are less formal and evidence that is less complete than in a trial on the merits.” Univ. of Texas v. Camenisch , 451 U.S. 390, 395, 101 S. C t. 1830, 1834 (1981). Many federal courts of appeal have therefore permitted hearsay to provide the basis for preliminary injunctive relief. See, e.g. , Mullins v. City of New York , 626 F.3d 47, 51

- 52 (2d Cir. 2010) (listing decisions from other circuits that allow preliminary injunctive relief to be based on hearsay and adopting that position). We find this reasoning persuasive. MES points to an unpublished decision of this court stating that a district court may not grant a preliminary injunction b ased on hearsay. Kelley v. Rudd , No. C7

- 91

- 1142, 1992 WL 3651 (Minn. App. Jan. 14, 1992), review denied (Minn . Mar. 26, 1992)

. But unpublished decisions are not precedential. Minn. Stat. § 480A.08 , subd. 3 (2014). And Kelley denied injunctive relief be cause the appellant’s affidavit was “based entirely on hearsay evidence.” 1992 WL 3651, at *4. In contrast, the district court here granted the injunction based not only on the statements of the anonymous and former MES employee s but also on the facts in the complaint that were within O’Neil’s personal knowledge, on the admissions of Uzp en and Durant, and on other document ary evidence

. B. Likelihood that Dexon will succeed on its claims against MES We begin our analysis of the Dahlberg factors by discussing Dexon’s likelihood of succeeding on the merits of its claims. “If a plaintiff can show no likelihood of prevailing on the merits, the district court errs as a matter of law in granting a temporary9

injunction.” Metro. Sports Facilities Comm ’n v. Minn. Twins P’ship , 638 N.W.2d 214, 226 (Minn. App. 2002), review denied (Minn. Feb. 4, 2002).

1. Misappropriation of trade secrets To prevail on a claim under the Uniform Trade Secrets Act , Minn. Stat. §§ 325C.01

- .08 (2014), the plaintiff must sho w both the existence and misappropriation of a trade secret. Electro

- Craft Corp. v. Controlled Motion, Inc. , 332 N.W.2d 890, 897 (Minn. 1983) . The act defines a trade secret as information that (1) is not generally known or readily ascertainable; (2) der ives independent economic value from secrecy; and (3) is the subject of efforts that are reasonable under the circumsta nces to maintain secrecy. Minn. Stat. § 325C.01, subd. 5 (i), (ii) ; Electro

- Craft Corp. , 332 N.W.2d at 899

- 901

. If an employee acquires a trade secret without express notice that it is a trade secret, th en the employee must know or have reason to know that the owner expect s secrecy . Minn. Stat. § 325C.01, subd. 5. MES argues that the cust omer - leads information is not a trade secret bec ause this information was either already possessed by MES or readily ascertainable . MES also argues th at Dexon failed to undertake reasonab le efforts to keep its customer

- leads list confidential . The district court’s findings on whether information is generally known or readily ascertainable and on whether information is the subject of efforts that are reasonable under the circumstances to maintain secrecy are findings of fact that we review for clear error. Electro

- Craft , 332 N.W.2d at 899, 902.10 a. Generally known or readily ascertainable The district court acknowledged that some of the information in the customer

leads list was already possessed by MES through its Data.com subscription. The d istrict court, however, found that Dexon’s customer

- leads list also included i nformation that was not from Data .com . The question then is whether the information not included in the Data.com subscription was generally known or readily ascertain able

. We acknowledge tha t customer

- lead lists are generally not trade secret s . See Blackburn, Nickels & Smith, Inc. v. Erickson , 366 N.W.2d 640, 645 (Minn. App. 1985) (holding that a customer list did not constitute a trade secret because “[i]t could be easily dup licated from public sources” ), review denied (Minn. June 24, 1985)

. T he informa tion contained in customer

- lead list s is often “ ‘ readily ascertainable by proper means ’ over the course of time without efforts beyond those ordinarily exerted by salesmen in d eveloping
customer s.” Fleming Sales Co. v. Bailey , 611 F. Supp. 507, 514 (N.D. Ill. 1985)

. However , this case involves a very large amount of information

— Durant’s flash drive contained data on over 10,000 customers

. In Cherne , our supreme court stated that “[t]he presence of an alternate means of obtaining the names of [10, 000 potential customers]

. . . without more, is not sufficient to establish that the informatio n is generally ascertainable.” 278 N.W.2d at 90. The district court c oncluded t hat Dexon’s
customer

- leads list “included information that its employees acquired through their own networking and research” and “included relevant sales information specific to individual actual and potential customers.” Because it could take MES signifi cant time and effort to assemble a customer list containing the large amount of information contained on the11

Dexon list, the district cour t’s finding that the customer

- leads list was not generally known or readily ascertainable is not clearly erroneous.

b. Ef forts that are reasonable under the circumstances to maintain secrecy. MES argues that every case finding reasonable efforts to maintain th e secrecy of
customer

- leads information involves a noncomp ete or confidentiality agreement identify ing the information as confidential

. See, e.g. , Cherne , 278 N.W.2d at 90 ( noting reasonable efforts to maintain secrecy of customer

- leads information where employees signed a covenant not to compete that prohibit ed them from disclosing or taking confidential information ). Here, there was no noncompete or confidentiality agreement and no written confidentiality policy. But MES has not cited any decision specifically requiring the use o f confidentiality agreements or explicit policies . This is because t he statute does not require any specific actions . I nstead, the test is whether the information “is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Mi nn. Stat. § 325C.01, subd. 5 (i) (emphasis added). MES mainta ins that the customer

- leads list was “unprotected” and cites case law stating that reasonable efforts are not made when supposedly trade secret information is not “locked up.” Nordale, Inc. v. Samsco, Inc. , 830 F. Supp. 1263, 1274 (D. Minn. 1993) (citing Gordon Employment, Inc. v. Jewell , 356 N.W.2d 738, 741 (Minn. App. 1984) )

. But the district court found that passwords were necessary t o logon to Dexon computers and that keys were necessary to access Dexon’s offices. Although Uzpen and Durant challenge the extent to which these policies were enforced, t he district court’s finding is12

based on information in Dexon’s verified complaint, and , on appeal, we must view the evidence in the light most favorable to the district court’s order. Toro Co. , 519 N.W.2d at 914. Dexon protected the customer

- leads list information by requiring passwords to access the computers on which the list was stored and by locking its offices. This is the twenty

- first century equ ivalent of keeping the customer

- leads list in a locke d fi le and provides support for the district court’s finding that Dexon took reasonable efforts to maintain the secrecy of the list

. Dexon never explicitly informed its employees that the customer

- leads list information was confidential. This, however , does not negate the existence of a trade secret as long as, under the circumstances, the employee “knows or has reason to know that the owner intends or expects the secrecy of the type of information comprising the trade secret to be maintained.” Minn. Stat. § 325C.01, subd. 5. By only allowing employees to access a portion of the customer

- leads list, requiring passwords to access its computer network, and locking its offices, Dexon indicated to employees that the information was confidential. Dexon’s security measures were undoubtedly weakened by Dexon’s instruction to employees to download the information onto flash drives, but its other actions did provide employees with a “reason to know” that Dexon intended the information to be confidential. Moreover, district court judges can apply common sense, as the court did here , finding that “Durant and Uzpen could not have reasonably believed they we re permitted to take with them to their new employer a list of over 10,000
customers
. . . , developed by Dexon.”13

We acknowledge that this was a close issue for the district court

. But in reviewing a district court’s findings, it is not our role to asce rtain whether we would reach the same result. A s the reviewing court, our task is only to assess whether the district court’s finding is clearly erroneous. See Electro

- Craft Corp. , 332 N.W.2d at 899, 902. We conclude that the district court did not clea rly err in finding that Dexon made reasonable efforts to maintain the secrecy of the client

- leads list , and it did not abuse its discreti on by determining that Dexon is likely to succeed on its misappropriation

- of

- trade

- secret claim. 2. Tortious interferenc e with prospective economic a dvantage To prevail on a claim of tortious interference with prospective economic advantage, a plaintiff must prove: (1) the existence of a reasonable expectation of economic advantage; (2) the defendant’s knowledge of that ex pectation; (3) the defendant’s intentional interference with the plaintiff’s reasonable expectation of economic advantage in a manner that is tortious or in violation of a state or federal statute or regulation; (4) that without the defendant’s interferenc e, it is reasonably probable that plaintiff would have realized this economic advantage; and (5) that the plaintiff suffered damages. Gieseke ex. rel. Diversified Water Diversion, Inc. v. IDCA, Inc. , 844 N.W.2d 210, 219 (Minn. 2014). Dexon claims that , b y soliciting its customers using the
customer

- leads list, MES interfered with Dexon’s reasonable expectation of e conomic advantage . It claims that this interference was tortious because it involved the misappropriation of trade secrets and the conversion of Dexon’s customer

- leads list. Given that the leads list was not generally known or readily ascer tainable and contained information presumably helpful in making sales, Dexon likely did have a14

reasonable expectation of economic advantage. By using the li kely trade

- secret
customer

- leads list, MES may have tort i uously interfered with that expectation. The district court’s determination that Dexon is likely to succeed on this claim is not an abuse of discretion

. 1 Becaus e Dexon is likely to succeed against MES on at least some of its claim s , 2 the district court did not abuse its discretion by determining that the likelihood

- of

- success factor weighed in favor of granting the injunction. C. Irreparable h arm The party seeking a temporary restraining ord er must establish that the order is necessary to prevent irreparable harm and that there is no adequate legal remedy. Cherne , 278 N.W.2d at 92. MES argues that Dexon failed to meet this burden

. Irreparable harm may be inferred from the misa ppropriatio n of confidential or trade secret information. Creative Commc’ns Consultants, Inc. v. Gaylord , 403 N.W.2d 654, 657 (Minn. App. 1987). Dexon has established that MES likely misappropriated its
tr ade secret customer

- leads list. There is also evidence that Durant’s use of the list has resulted in Dexon losing customers. Dexon has shown irreparable harm.

1 The district court also concluded that MES is likely to succeed on its claim of unfair competition. Unfair competition is not an independent tort and does not have specific elements. Rehabilitation Specialists, Inc. v . Koering , 404 N.W.2d 301, 305

- 06 (Minn. App. 1987). Instead, an unfair

- competition claim can be based on successful claims of tortious interference with prospective economic advantage or misappropriation of trade secrets. See United Wild Rice, Inc. v. N elson , 313 N.W.2d 628, 632 (Minn. 1982). Accordingly, we need not separately address Dexon’s likelihood of success on that claim. 2 Dexon also brought a conversion claim against MES. The district court found that “[i]t is possible that Dexon may prevai l on its conversion argument.” Dexon concedes that the district court did not base the temporary restraining order on its likelihood of success on this claim. For this reason, we do not address it.15

MES also argues that the legal remedy of damages would be adequate to compensate any harm suffered b y Dexon. T he district court’s determination that a legal remedy would not be adequate is not an abuse of discretion. The list contains more than 10,000 actual and potential customers. It would be very difficult to determine after the fact whether Dexon lost those customers to MES as a result of MES obta ining the
customer

- leads list or for some other legitimate reason. Thus causation would be difficult to establish , and damages would be speculative. D. The nature of the p arties ’ r elationship The nature and background of the parties’ relationship is also one of the Dahlberg factors. Dahlberg Bros., Inc. , 272 Minn. at 274, 137 N.W.2d at 321. The purpose of a temporary restraining order is to maintain the status quo of the parties’ relationship until a decision on the merits can be reached

. Foley , 317 N.W.2d at 712

. MES argues that the restraining order does not maintain the status quo as of the date the district court issued the order , but rather reverts the matter back to the situation bef ore Durant took the customer

- leads information with him to MES. We disagree. The district court’s order does not require MES to abandon any customers it has gained as a

re sult of the use of the customer

- leads list. It merely requires the company to refr ain from using the confidential information going forward and to return the information to Dexon. This maintains the status quo by preserving fair competition between the parties. The district court did not abuse its discretion by determining that this factor weighs in favor of granting the temporary restraining order.16

E. Public -

p ol icy c ons iderations The fourth Dahlberg factor requires the court to consider whether public

- policy considerations as express ed in statute favor either party. 272 Minn. at 275, 137 N.W.2d at 321

- 22. The Uniform Trade Secrets Act expresses a desire to eliminate the misappropriation of trade secrets. See Minn. Stat. §§ 325C.01

- .08. The district court did not abuse its discretion by conclud ing that this fac tor weighs in favor of an injunction

. F. Administrative b urden The final Dahlberg factor is the administrative burden of judicial supervision and enforcement of the temporary restraining order. 272 Minn. at 275, 137 N.W.2d at 322. The district court determined that the administrative burden placed on the court weighed neither for nor against granting injunctive relief

. A report from a computer forensic expert indicated that deleting the information the district court termed confidential from MES’s servers would take appro ximately 8

- 12 days . After the information is deleted, little to no additional oversight appears necessary. While the district court has had to issue one clarifying order, no hearing was held , and Dexon did not contest the clarification sought by MES. The district court fashioned a common

- sense injunction that appears easy to

u nderstand, implement, and maintain

. The district court did not abuse its discretion by determining that this f

actor does not weigh against granting the order

.17

G. Conclusion The district court considered the evidence presented by both partie s and issued a thorough and thoughtful order discussing each Dahlberg factor in depth. T he district
court ’s temporary restraining order was not an abuse of discretion

. Affirmed.