Opinion ID: 2338953
Heading Depth: 1
Heading Rank: 6

Heading: Irreparable harm and likelihood of success on the merits

Text: Finkel argues that the record lacks substantial evidence to support the district court's conclusion that Cashman would likely succeed on the merits on its breach of contract and related claims or that it would suffer irreparable harm absent the issuance of the injunction. This court has held in the context of an appeal from an order granting an injunction that acts committed without just cause which unreasonably interfere with a business or destroy its credit or profits, may do an irreparable injury. Sobol v. Capital Management, 102 Nev. 444, 446, 726 P.2d 335, 337 (1986). Here, the district court found that Finkel likely competed with Cashman, solicited Cashman's employees, disparaged Cashman, disclosed Cashman's confidential information, and misappropriated Cashman's trade secrets. Contrary to Finkel's arguments, substantial record evidence supports the district court's conclusions. First, the Agreement restricted Finkel's ability to engage in a competing business, defined in part as any commercial photography or related service offered by Cashman, whether performed internally or by an outside service. It is undisputed that Finkel proceeded to acquire and operate the only vendor for wedding albums who could provide next-day printing in the relevant area, and that IQ had performed as an outside-service provider for Cashman in the past. Finkel argues that this fact is insufficient to show that he was participating in a competing business because Influent Solutions offered a variety of other commercial printing services. However, this does not undermine the district court's conclusion that Influent Solutions was in competition with Cashman, especially in light of Finkel's admission that he approached several of Cashman's customers, urging them to move their business to Influent Solutions. Second, the Agreement prohibited Finkel from making any type of disparaging or derogatory remarks regarding Cashman. The record indicates that Finkel repeatedly violated this clause by referring to Cashman executives as untrustworthy, swindling snake[s], and other similar remarks. Next, the Agreement restricted Finkel from inducing or attempting to induce any Cashman employee to leave Cashman. Here, the record indicates that Finkel likely violated this condition, as at least four Cashman employees visited Influent Solutions while still employed by Cashman, and Finkel made more than 155 calls lasting a total of 1,104 minutes to those employees. Also, Finkel enlisted one Cashman employee to set up his telephone and computer network and another employee to arrange a business meeting with one of Cashman's customers. Although Finkel argues that he did not violate the Agreement, since he only temporarily employed these individuals, the Agreement prohibited any attempt to induce a Cashman employee. Finally, the Agreement prohibited Finkel from disclosing any nonpublic information, including information regarding Cashman's plans, pricing, customers, processes, or other data of any kind. The record supports that Finkel identified several of Cashman's customers in his online biography and that he described his invention of Cashman's point-of-sale operating system. Also, Finkel informed at least one outside party of Cashman's confidential pricing structures and marketing plans. This is the precise sort of conduct that could cause a business irreparable harm. Sobol, 102 Nev. at 446, 726 P.2d at 337 (determining that where a person has interfere[ed] with the operation of a legitimate business by creating public confusion, infringing on goodwill, and damaging reputation in the eyes of creditors, it may result in irreparable harm). Therefore, substantial evidence supported the district court's conclusion that Finkel's conduct likely breached multiple provisions of the party's Agreement and, if true, would likely cause irreparable harm to Cashman. With respect to the district court's finding that Finkel likely misappropriated trade secrets, Finkel argues that any information that he may have used was not a trade secret. We disagree. Nevada's Uniform Trade Secrets Act, NRS Chapter 600A, provides that the [a]ctual or threatened misappropriation [of a trade secret] may be enjoined. NRS 600A.040(1). Broadly defined, a trade secret is information that [d]erives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public, as well as information that [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy. NRS 600A.030(5)(a)-(b). Whether information is a trade secret generally is a question of fact. See Frantz v. Johnson, 116 Nev. 455, 466, 999 P.2d 351, 358 (2000). Factors to consider include: (1) the extent to which the information is known outside of the business and the ease or difficulty with which the acquired information could be properly acquired by others; (2) whether the information was confidential or secret; (3) the extent and manner in which the employer guarded the secrecy of the information; and (4) the former employee's knowledge of customer's buying habits and other customer data and whether this information is known by the employer's competitors.... Id. at 467, 999 P.2d at 358-59 (quotation omitted). Here, the district court found that Finkel acquired an intimate knowledge of Cashman's confidential information while employed as an executive for the company. This included Cashman's contracts, customers, processes, prices, and other business-related confidential information. Finkel acknowledged to the district court that confidential trade secrets would include: costs; discounts; future plans; business affairs; processes; ... technical matters; customer lists; product designs; and, copyrights. While Finkel's admission is not necessarily dispositive of an item's trade-secret status, it may be considered as a factor weighing towards such classification. [2] See Frantz, 116 Nev. at 467, 999 P.2d at 358-59. In addition to Finkel's admission, the parties' treatment of the above items tends to support their classification as trade secrets. Frantz, 116 Nev. at 466, 999 P.2d at 358. The record indicates that pricing schemes were kept confidential, the point-of-sale software was not shared with anyone outside the business, and Cashman required its employees to keep business-related information confidential. Moreover, Cashman went to extreme measures to protect its customer information, as only four people had access to its contracts and customer data. Thus, substantial evidence supports the district court's conclusion that the information allegedly misappropriated by Finkel would likely be confidential trade secrets and that such misappropriation could result in irreparable harm, making injunctive relief appropriate. See Saini v. International Game Technology, 434 F.Supp.2d 913, 919 (D.Nev.2006) ([D]isclosure of confidential information or trade secrets creates serious harms, which are not readily addressed through payment of economic damages, [and] are sufficient to meet the irreparable injury requirement for a preliminary injunction.).