Opinion ID: 6496059
Heading Depth: 2
Heading Rank: 1

Heading: Lost Profits and Lost Opportunities

Text: 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 factual ﬁnding that money damages could compensate Arrive for lost sales attributable to their 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. The district court noted that Traffic Tech identified No. 21-3101 13 thirteen discrete customers who had contact with 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, the 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 appellant’s argument for reversing a district court’s ruling on a preliminary injunction motion concerns a factual finding, the appellant must meet the demanding clearerror standard. See id. at 539, 541–42. The 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 these findings. 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. Nor does it meaningfully explain why the 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. The two cases on which Arrive relies, Hess Newmark and Turnell, are inapposite. Here, the parties can identify 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 Hess 14 No. 21-3101 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 were 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. In Turnell, a high-level executive in the commercialroofing 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 covenants. 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 appealed, “[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 on point. Further, Arrive submits that it suffers irreparable harm because it loses “a potential opportunity” whenever a No. 21-3101 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. The defendants are correct that Arrive forfeited its argument regarding lost opportunities. Issues and arguments 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. Even if this 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 translate into lost profits, albeit indirectly, as in the end there is no economic value to opportunities that are not converted to sales. Resisting this reasoning, Arrive points to the deposition testimony of its corporate representative, Scott Sandager. But Sandager merely offered the conclusory statement that “every time Lindsey [Scott] talks to a shipper that we’ve walked through, 16 No. 21-3101 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 testimony does not serve as competent evidence that explains 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 discretion 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. The district court was therefore within its discretion to conclude monetary damages were an adequate remedy at law.