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

Heading: Use of Confidential Information

Text: 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 employees and their 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. 21-3101 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 –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, 457 (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 point 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  (citing Foodcomm, 328 F.3d at 304). But there is no evidence to support a complete loss of Arrive’s client relationships. Arrive makes no such allegation. Vendavo is not entirely on point either. The 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 1142, 1144. By contrast, here the trial court examined the record and found Arrive had not sufficiently shown that any 18 No. 21-3101 of its proffered categories of information qualified as trade secrets. Moreover, 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 differed significantly from those they had at Arrive. Just because the individual defendants remained in the thirdparty logistics industry does not mean they would 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 movant must show it “will suffer” irreparable harm in the absence of an injunction. Stuller, Inc., 695 F.3d at 678. In some cases, a former employee’s use of an employer’s confidential information could support a finding of irreparable harm to the former employer. But 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 reasonable degree of certainty. See, e.g., Life Spine, 8 F.4th 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 is No. 21-3101 19 through lost 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, the 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 denying the requested preliminary injunction. 4 See Lawson Prods., 782 F.2d at 1440–41.