Court Opinion

ID: 4173748
Source: CourtListenerOpinion
Date Created: 2017-06-01 20:03:51.095984+00
Date Added: 2024-06-11T13:24:46.163354
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                               ________________

                                   No. 16-3591
                                ________________

                          FRES-CO SYSTEMS USA, INC.

                                         v.

                          KEVIN A. HAWKINS;
                  TRANSCONTINENTAL ULTRA FLEX, INC.,
                                                Appellants
                        _______________________

                  On Appeal from the United States District Court
                     for the Eastern District of Pennsylvania
                           (E.D. Pa. No. 2-16-cv-04246)
                           Honorable: Petrese B. Tucker
                                 ______________

                            ARGUED: January 17, 2017

           Before: AMBRO, VANASKIE, and SCIRICA, Circuit Judges.

                                (Filed: June 1, 2017)

John J. DeLaney, III
Delaney McBride
36 Euclid Street
Woodbury, NJ 08096

Richard G. Kass     [ARGUED]
Bond, Schoeneck & King
600 Third Avenue
22nd Floor
New York, NY 10016
       Counsel for Appellants
Daniel P. O’Meara [ARGUED]
Montgomery McCracken Walker & Rhoads
1235 West Lakes Drive
Suite 200
Berwyn, PA 19312
       Counsel for Appellee

                                   ________________

                                       OPINION*
                                   ________________

SCIRICA, Circuit Judge

       In this appeal, we address the scope of analysis required to grant a preliminary

injunction. In August 2016, Kevin A. Hawkins began working as a sales representative

for Transcontinental Ultra Flex, Inc. after spending the previous sixteen years as a sales

representative for Transcontinental’s direct competitor, Fres-co System USA, Inc.

Hawkins’s former employer, Fres-co, sued Hawkins and Transcontinental for

misappropriation of trade secrets and sought to enforce a non-competition agreement

Hawkins signed when he began his employment with Fres-co. The District Court granted

Fres-co a preliminary injunction barring Hawkins from disclosing Fres-co’s confidential

information and from soliciting twelve clients whom he had serviced while at Fres-co.

Hawkins and Transcontinental appealed.

       Because we find the District Court did not properly analyze the four factors

required to grant injunctive relief, we will remand. The preliminary injunction will

remain in place pending the trial court’s reconsideration of the preliminary injunction

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
                                             2
factors.

I.      BACKGROUND

        In September 2000, Fres-co offered Hawkins a position as a sales representative.

As a condition of accepting Fres-co’s offer, Hawkins was required to sign Fres-co’s

Confidentiality and Non-Competition Agreement. The Agreement provides, in part:

        During the course of his/her employment, and for a period of one (1) full year after
        the termination thereof under any circumstance or for any reason, Employee shall
        not directly or indirectly whether as owner, shareholder, director, partner or
        employee or in any other capacity:
        a)     compete with Fres-co in any “Line of Business”;
        b)     accept employment with or be employed (as an employee, consultant or in
               any other capacity) by a competitor of Fres-co in any “Line of Business”;
               or
        c)     solicit business from, contract with, be employed by, or otherwise do
               business with any customer of Fres-co or assist any other person or entity in
               doing so in any “Line of Business”.

        As used in this paragraph “Line of Business” means and includes:
        1)    the manufacture, design, development, service, distribution or sale of
              flexible packaging equipment and/or materials for use in packaging any
              products for which customers or prospective customers of Fres-co have, at
              any time during the two (2) year period immediately preceding termination
              of employment, purchased or contracted to purchase equipment and/or
              materials from Fres-co (or any affiliate of Fres-co) and shall in any event
              include, but not be limited to Coffee, Pet Food, Agricultural Chemicals and
              polymers; and
        2)    any other line of business conducted by Fres-co on the date of termination
              of employment or then in development by Fresco.

App. 34. Hawkins accepted the offer and entered into the Agreement on September 27,

2000.

        Fres-co provides flexible packaging services for a variety of businesses and

products, including coffee packaging. During his time at Fres-co, Hawkins was

responsible for Fres-co’s west coast coffee packaging customers. He served as the

                                             3
primary contact for coffee packaging clients in Washington, California, Hawaii, and

Texas. Hawkins’s twelve largest customers account for an average of over $1 million

each in revenue per year for Fres-co.

      On July 29, 2016, Hawkins notified Fres-co’s Director of Sales, Kevin McRae,

that he was resigning from Fres-co effective August 12, 2016. In response to inquiries

from McRae, Hawkins disclosed that he had accepted a position with Transcontinental,

another flexible packaging company. Hawkins told McRae he would likely be servicing

Transcontinental’s coffee packaging customers. When McRae reminded Hawkins of the

Agreement, Hawkins refused to confirm he would not solicit Fres-co customers with

whom he had worked while at Fres-co, and would not commit to honoring the terms of

the Agreement.

      Fres-co filed suit against Hawkins on August 4, 2016, alleging breach of contract,

misappropriation of trade secrets under the Pennsylvania Uniform Trade Secret Act and

the federal Defendant Trade Secrets Act, and interference with existing and prospective

contractual relationships. Shortly thereafter, Fres-co amended the complaint to also name

Transcontinental as a defendant. The amended complaint seeks injunctive relief and

damages.

      Fres-co moved for issuance of a temporary restraining order and/or preliminary

injunction on August 18, 2016. Fres-co sought an order that would (1) require Hawkins

to return any Fres-co records in his possession or control; (2) enjoin Hawkins from using

or disclosing any of Fres-co’s confidential or proprietary business information and/or

trade secrets; and, (3) enjoin Hawkins from soliciting or communicating with any of the

                                            4
top twelve coffee packaging accounts Hawkins served while working at Fres-co. Fres-co

attached an affidavit from McRae in support of its motion. Hawkins and

Transcontinental opposed the motion and submitted an affidavit from Hawkins denying

that he was aware of any Fres-co trade secrets and representing he would not disclose or

use any confidential information he learned at Fres-co while working for

Transcontinental.

       The District Court held oral argument, but did not take any additional evidence.

On August 26, 2016, the District Court issued an order granting the relief sought by

Fres-co. Under the order, Hawkins was required to return any Fres-co materials

remaining in his possession, restrained from using or disclosing Fres-co’s “confidential

and proprietary business information and/or trade secrets” in his possession, and

restrained from “soliciting, contacting, or communicating with any of the top twelve (12)

coffee packaging clients that Defendant Hawkins served on behalf of [Fres-co] for the

purpose of selling or providing them with competing products or services[.]” App. 1-2.

The order emphasizes it does not preclude Hawkins from working in Transcontinental’s

coffee division, and it does not preclude Transcontinental from soliciting the twelve

customers without the involvement of Hawkins. 1

1
  The District Court had jurisdiction based on the diversity of the parties under 28 U.S.C.
§ 1332. We have appellate jurisdiction over interlocutory orders granting a preliminary
injunction under 28 U.S.C. §1292(a)(1). We review the District Court’s findings of fact
for clear error, legal conclusions de novo, and the decision to grant the injunction for
abuse of discretion. Del. Strong Families v. Att’y Gen., 793 F.3d 304, 308 (3d Cir. 2015).
                                             5
II.    ANALYSIS

       A.      Preliminary Injunction Factors2

       “A preliminary injunction is an extraordinary remedy never awarded as of right.”

Winter v. Natural Resources Defense Council, 555 U.S. 7, 24 (2008). A party may be

granted a preliminary injunction only “upon a clear showing that the plaintiff is entitled

to such relief.” Id. at 22. The four-factor test is familiar: a preliminary injunction may

issue if (1) the plaintiff shows that it is likely to succeed on the merits; (2) the plaintiff

establishes that it is likely to suffer irreparable harm absent issuance of the injunction; (3)

the balance of equities does not disfavor granting an injunction; and (4) public interest

concerns do not outweigh the interests advanced by issuance of the injunction. Id. at 20.

The relative strength of the four factors will typically vary, and some may weigh more

heavily than others in the trial court’s assessment of whether relief is warranted. Thus,

there may be circumstances when the plaintiff satisfies the first two factors, but the

balance of equities and/or the public interest militate against granting a preliminary

injunction. See, e.g., id. at 26; Boucher v. School Bd. of School Dist. of Greenfield, 134

F.3d 821, 826-27 (7th Cir. 1998) (grant of preliminary injunction vacated where harm to

School Board in being prevented from enforcing order expelling the plaintiff-student

from school order exceeded damage to student who claimed expulsion violated his First

2
  In addition to challenging the District Court’s conclusion on whether the preliminary
injunction was warranted, Hawkins and Transcontinental contend the District Court erred
by failing to require Fres-co to post a bond during the pendency of the injunction.
Because Fres-co posted a bond after Hawkins and Transcontinental filed their opening
brief, see Fres-co System USA, Inc. v. Hawkins, No. 2:16-cv-04246-PBT, ECF No. 25
(E.D. Pa. Oct. 25, 2016), this issue is moot.
                                                6
Amendment rights). What is imperative in each case where the plaintiff satisfies the first

two factors for granting preliminary injunctive relief is that the District Court assess the

balance of harms and public interest to determine that immediate injunctive relief is

warranted.

              1.     Irreparable Harm

       We begin, as the District Court did, with the likelihood of irreparable harm. The

District Court described Fres-co’s showing on this factor as “particularly compelling.”

App. 3. In explaining this conclusion, the District Court first emphasized Hawkins’s

imminent start date at Transcontinental. App. 3. It then described Hawkins’s role for

Fres-co as the primary contact for Fres-co’s west coast coffee packaging clients, and

concluded this position gave Hawkins access to confidential information, including

“customer lists, price lists, and marketing and sales strategies.” Id. It observed that

neither Hawkins nor Transcontinental would confirm that Hawkins would not “solicit,

contact, or communicate with Hawkins’ former Fres-co clients[]” and accordingly

determined Hawkins would “begin work as a sales representative, the position he

occupied while at Fres-co, and be assigned to solicit his former clients.” App. 4. The

trial court concluded that, in this position, Hawkins would “likely use his specialized and

confidential knowledge to the detriment of Fres-co . . . . and Hawkins’ interference with

Fres-co’s client relationships would cause immediate irreparable harm to Fres-co.” Id.

The District Court next reasoned this type of harm was irreparable because it could not be

adequately ascertained or compensated by money damages. Id.

       Hawkins and Transcontinental challenge the trial court’s finding of irreparable

                                              7
harm, arguing there is no imminent threat to Fres-co because Hawkins swore in an

affidavit he would not disclose or use any of Fres-co’s business or marketing plans while

at Transcontinental and because Transcontinental directed him not to use or disclose any

of Fres-co’s confidential information. We disagree. The District Court did not abuse its

discretion in finding a likelihood of irreparable harm on these facts. “[C]ourts

considering whether to grant injunctive relief must exercise their equitable discretion in a

case-by-case, fact specific manner. A critical aspect of fact-finding in this and other

contexts is drawing reasonable inferences from facts in the record.” Groupe SEB USA,

Inc. v. Euro-Pro Operating LLC, 774 F.3d 192, 205 (3d Cir. 2014). Under the statutes

giving rise to Fres-co’s causes of action, misappropriation of trade secrets need not have

already occurred to warrant injunctive relief; threatened misappropriation is sufficient.

12 Pa. Cons. Stat. Ann. § 5303(a) (“Actual or threatened misappropriation may be

enjoined.”); 18 U.S.C. § 1836(b)(3)(A)(i) (a court may grant an injunction “to prevent

any actual or threatened misappropriation”); see also Bimbo Bakeries USA, Inc. v.

Botticella, 613 F.3d 102, 114 (3d Cir. 2010) (“the proper inquiry . . . is whether there is

sufficient likelihood or substantial threat of a defendant disclosing trade secrets”)

(internal quotations omitted). Given the substantial overlap (if not identity) between

Hawkins’s work for Fres-co and his intended work for Transcontinental—same role,

same industry, and same geographic region—the District Court was well within its

discretion to conclude Hawkins would likely use his confidential knowledge to Fres-co’s

detriment.

                                              8
              2.     Likelihood of Success

       We have long held that a showing of likelihood of success on the merits is a

prerequisite to issuance of a preliminary injunction. See Am. Express Travel Related

Servs., Inc. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d Cir. 2012) (“The moving party’s

failure to show a likelihood of success on the merits ‘must necessarily result in the denial

of a preliminary injunction.’” (quoting In re Arthur Treacher’s Franchisee Litig., 689

F.2d 1137, 1143 (3d Cir. 1982))); Morton v. Beyer, 822 F.2d 364, 367 (3d Cir. 1987)

(“To obtain a preliminary injunction, the moving party must demonstrate both a

likelihood of success on the merits and the probability of irreparable harm if relief is not

granted.”). In cases where the moving party has failed to demonstrate it is likely to

succeed on the merits, we have denied injunctive relief, without regard for the party’s

showing as to the other three factors. See, e.g., Del. Strong Families 793 F.3d at 313;

Am. Express, 669 F.3d at 374. Despite the critical importance of this element, the District

Court’s order does not address Fres-co’s likelihood of success.3

       Defining what constitutes a “likelihood” of success on the merits has proven

difficult. We have never required a court to assure itself with certainty that the moving

3
  The trial court acknowledges in the order that its analysis focuses on irreparable harm.
App. 3. Nonetheless, Fres-co contends we can infer the District Court found Fres-co
likely to succeed on the merits from certain stray statements in the trial court’s order. In
support, Fres-co cites the District Court’s statement that “narrow injunctive relief is
further justified” by the irreparable harm showing, App. 3 (emphasis added), and argues
likelihood of success must have been what initially justified relief. Fres-co also cites the
trial court’s statement that “Hawkins will likely use his specialized and confidential
knowledge to the detriment of Fres-co[,]” App. 4. We disagree with Fres-co’s
characterization of these statements. These statements speak only to irreparable harm,
and cannot substitute for findings on Fres-co’s likelihood of success.
                                              9
party will ultimately prevail prior to granting preliminary injunctive relief. And we have

held that “[a] ‘likelihood’ does not mean more likely than not.” Singer Mgmt.

Consultants, Inc. v. Milgram, 650 F.3d 223, 229 (3d Cir. 2011) (en banc). On the other

hand, the Supreme Court has advised that “[i]t is not enough that the chance of success

on the merits be better than negligible[,]” and “more than a mere ‘possibility’ of relief is

required.” Nken v. Holder, 556 U.S. 418, 434 (2009) (internal quotations omitted).

       The nature of the court’s inquiry into whether a party has met this threshold will

necessarily vary with the circumstances of each case. But mere assumption that the

moving party will prevail is not sufficient. Instead, the trial court should analyze the

elements of the movant’s claims to determine whether the movant can likely meet each

element. See, e.g., Arrowpoint Capital Corp. v. Arrowpoint Asset Mgmt., LLC, 793 F.3d

313, 319–26 (3d Cir. 2015) (analyzing the elements of a claim for trademark

infringement or unfair competition under the Lanham Act); Del. Strong Families, 793

F.3d at 308–12 (analyzing the constitutionality of Delaware’s Elections Disclosure Act

under relevant First Amendment precedent); Am. Express, 669 F.3d at 366–74 (analyzing

the elements of the plaintiff’s substantive due process, contract clause, takings clause,

and commerce clause challenges to New Jersey’s unclaimed property statute); Bimbo

Bakeries USA, Inc. v. Botticella, 613 F.3d 102, 109–18 (3d Cir. 2010) (analyzing the

elements of plaintiff’s misappropriation of trade secrets claim under the Pennsylvania

Uniform Trade Secrets Act). Of course, at this stage the trial court’s conclusions on these

elements are preliminary; exploration of the merits for a final determination may well

yield new information that influences the court’s ultimate consideration of the claims.

                                             10
       Here, the District Court neither mentioned Fres-co’s causes of action nor analyzed

the elements of any or all of them to determine whether Fres-co is likely to succeed on

the merits of its claim. Finding whether Fres-co is likely to succeed on its causes of

action requires, inter alia, an analysis of the information to which Hawkins had access to

determine whether it meets the statutory definition of trade secrets; review of whether

Fres-co used reasonable efforts to maintain the secrecy of the information; and analysis

of whether the Agreement Hawkins signed with Fres-co was both reasonably necessary

for Fres-co’s protection and reasonably limited in duration and geographic scope. See

generally 18 U.S.C. §§ 1836(b), 1839; 12 Pa. Cons. Stat. Ann. §§ 5302, 5303; Sidco

Paper Co. v. Aaron, 351 A.2d 250, 252 (Pa. 1976).

       These are disputed issues. For example, Hawkins and Transcontinental argue the

confidential information to which Hawkins allegedly had access does not constitute

“trade secrets” for the purposes of Fres-co’s claims. Both the Pennsylvania Uniform

Trade Secret Act and the federal Defend Trade Secrets Act include statutory definitions

of trade secrets.4 And a significant body of law has developed at both the state and

4
 The two statutes provide similar, though not identical definitions, of “trade secrets.”
The Pennsylvania Uniform Trade Secret Act defines the term as including, inter alia:
       Information, including a formula, drawing, pattern, compilation including a
       customer list, program device, method, technique or process that . . . [d]erives
       independent economic value, actual or potential, from not being generally known
       to, and not being readily ascertainable by proper means by, other persons who can
       obtain economic value from its disclosure or use [and is] the subject of efforts that
       are reasonable under the circumstances to maintain its secrecy.
12 Pa. C.S.A. § 5302. The federal Defend Trade Secrets Act defines “trade secret” as
including, inter alia, ““all forms and types of financial, business, scientific, technical,
economic, or engineering information, including patterns, plans, compilations, program
devices, formulas, designs, prototypes, methods, techniques, processes, procedures,
                                              11
federal level addressing questions such as whether non-technical information, like the

customer lists and long-term strategies to which Hawkins had access, qualify as trade

secrets under Pennsylvania or federal law. See, e.g., Bimbo Bakeries, 613 F.3d at 112–

14; Zambelli Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412, 424–25 (3d Cir. 2010).

All of these considerations were relevant to determining whether Fres-co is likely to

succeed on the merits.

       Further, the trial court did not address Hawkins and Transcontinental’s argument

that Fres-co could not prevail on the merits of its breach of contract claim because an

earlier opinion by Judge Dalzell of the Eastern District of Pennsylvania concluded a

nearly identical Fres-co non-competition agreement was so oppressively overbroad as to

render it unenforceable. See Fres-co Sys. USA, Inc. v. Bodell, No. Civ.A. 05-3349, 2005

WL 3071755 (E.D. Pa. Nov. 15, 2005).5 The parties acknowledge the non-competition

programs, or codes” provided the owner “has taken reasonable measures to keep such
information secret” and the information derives value “from not being generally known .
. . and readily ascertainable.” 18 U.S.C. § 1839(3).
5
  In Bodell, Fres-co sought preliminary injunctive relief against a former coffee
packaging sales representative who, after leaving Fres-co, began soliciting Fres-co
customers while working for Ultra Flex Packaging Corp. Id. at *1–3. Applying
Pennsylvania law, Judge Dalzell found Bodell’s non-competition agreement was
unenforceable for lack of consideration because it replaced an earlier non-competition
agreement without any corresponding benefit to Bodell. Id. at *3. Although Judge
Dalzell concluded the non-competition agreement was “unenforceable on this basis
alone,” id., he nonetheless proceeded to analyze whether the restrictions were reasonably
necessary for the protection of Fres-co and reasonably limited in duration and geographic
scope. He concluded the agreement was too broad under both standards, stating the form
language covering “at least four industries on three continents” was “unquestionably
broader than is necessary to protect any legitimate concerns Fres-co might have[.]” Id. at
*4. Finally, Judge Dalzell declined to reform the agreement to grant limited injunctive
relief, citing the “highly oppressive circumstances” of the agreement and expressing
                                             12
agreements in Bodell and this case are similar, if not identical.6 Accordingly, Hawkins

and Transcontinental argue the doctrine of issue preclusion bars Fres-co from enforcing

the Agreement in this case. 7

       We can imagine circumstances in which a defendant’s claim of issue preclusion

could warrant denial of a preliminary injunction, but those circumstances are limited.

The plaintiff moving for a preliminary injunction must only show a likelihood of success

on the merits—not that he will certainly prevail or even that he will more likely than not

prevail. Accordingly, a claim of issue preclusion warrants denial of a preliminary

injunction only where issue preclusion so obviously applies that the plaintiff cannot meet

even the modest likelihood of success standard.

       Here, Fres-co contends the issue decided in Bodell is not identical to the issue

reluctance to “sanction Fresco’s [sic] choice to make all of its 350 employees sign a
gratuitously overbroad non-compete lacking in consideration.” Id. at *8.
6
 Hawkins and Transcontinental contend the Agreement’s restrictive provisions are
unchanged from the agreement at issue in Bodell. Appellants’ Reply Br. 8. But there
was an essential difference—as Fres-co notes, Hawkins’s non-competition agreement
was signed in consideration for his employment with Fres-co; whereas Bodell’s non-
competition agreement simply replaced an earlier agreement without providing any new
consideration. Appellee’s Br. 21.
7
  In evaluating the preclusive effect of the federal court’s determination of a state law
issue in a later action also based upon diversity of citizenship, we apply state law
preclusion principles. See Prusky v. ReliaStar Life Ins. Co., 532 F.3d 252, 265 (3d Cir.
2008) (“There is no dispute that Pennsylvania preclusion law governs in this diversity
action.”). Under Pennsylvania law, issue preclusion requires: (1) the issue decided in the
prior case is identical to the one presented in the later case; (2) there was a final
adjudication on the merits; (3) the party against whom issue preclusion is asserted was a
party or in privity with a party in the prior case; (4) the party against whom issue
preclusion is asserted had a full and fair opportunity to litigate the issue in the prior case;
and (5) the determination in the prior case was essential to the judgment. Metropolitan
Edison Co. v. Pa. Public Utility Comm’n, 767 F.3d 335, 351 (3d Cir. 2014); Office of
Disciplinary Counsel v. Kiesewetter, 889 A.2d 47, 50-51 (Pa. 2005).
                                              13
presented in this case because Bodell had experience in the flexible packaging sales

industry prior to signing the non-competition agreement; whereas, Hawkins—who did

not have similar prior experience—derived all his knowledge and expertise in the field

from his time at Fres-co. Fres-co also disputes whether Bodell’s finding that the non-

competition agreement was oppressively overbroad was essential to the judgment, given

the Bodell court’s separate findings on the issue of consideration. The trial court did not

analyze these arguments to determine whether, at this early stage, Hawkins’s and

Transcontinental’s issue preclusion argument was sufficiently persuasive to prevent Fres-

co from meeting its burden to a show a likelihood of success on the merits. Of course we

take no position on this issue and leave it to the trial court in the first instance.

               3.     Balance of the Equities and Public Interest

       Even if we were to find the District Court implicitly ruled in favor of Fres-co as to

the company’s likelihood of success on the merits, the District Court’s silence as to the

final two preliminary injunction factors would require remand. The Supreme Court’s

opinion in Winter confirms denial of injunctive relief may be appropriate when the

balance of the harms and the public interest weigh against granting an injunction—even

if the movant is both likely to succeed on the merits and likely to suffer irreparable harm.

555 U.S. at 23–24. Accordingly, the Supreme Court emphasized the importance of

conducting an analysis of these two factors; it criticized as “cursory” the trial court’s

review of balance of the harms and the public interest when the trial court’s opinion

included only a single sentence saying it was “satisfied the balance of hardships tips in

favor of granting an injunction[.]” 555 U.S. at 26.

                                               14
       We have held in prior cases that the balance of harms and the public interest can,

depending on the circumstances, weigh in favor of protecting an employer from

misappropriation of its trade secrets even when such protection imposes restrictions on an

individual’s choice of employment. See, e.g., Bimbo Bakeries, 613 F.3d at 118–19. But

we have also noted the important public interest—particularly acute under Pennsylvania

law—“in employers being free to hire whom they please and in employees being free to

work for whom they please.” Id. at 119. The District Court’s order does not address

these competing interests, nor does it explain how it weighed the potential harm to Fres-

co against the potential harm to Hawkins and Transcontinental. Absent any reasoning on

these two factors, we cannot determine whether the District Court reasonably exercised

its discretion in granting Fres-co injunctive relief.

       B.     Appropriate Remedy

       The Federal Rules of Civil Procedure require “[e]very order granting an

injunction” to “state the reasons why it issued[.]” Fed. R. Civ. P. 65(d)(1)(A). The

District Court failed to state the reasons why it issued the injunction with respect to three

of the four preliminary injunction factors. The appropriate remedy is to remand for

further proceedings. Absent any factual findings or legal analysis as to these three

factors, we are limited in our ability to adequately review the conclusions reached by the

trial court. See Bradley v. Pittsburgh Bd. of Educ., 910 F.2d 1172, 1178 (3d Cir. 1990)

(“Arguably, factual findings when the court denies a preliminary injunction may serve

little purpose when there has been no hearing, but conclusions of law are nonetheless

essential and the factual bases on which the conclusions are predicated, whether derived

                                              15
from affidavits or testimony, serve to permit evaluation of the legal conclusions reached

by the district court.”) (footnote omitted).

       The difficulty is compounded by the limited record we have before us. It consists

of two affidavits. The affidavits provide conflicting information regarding the nature of

the information to which Hawkins had access while at Fres-co, among other issues.

While we have stopped short of requiring an evidentiary hearing prior to ruling on a

preliminary injunction motion, we have suggested that a trial court should conduct an

evidentiary hearing when “consideration of the injunction motion evidently was

influenced in some significant degree by credibility issues and factual disputes.”

Arrowpoint Capital, 793 F.3d at 324; see also Bradley, 910 F.2d at 1179 (suggesting a

hearing, though not required, would provide a “useful forum” for resolving issues

disputed in the parties’ affidavits and documentary evidence on a preliminary injunction

motion). We leave to the District Court’s consideration whether this standard calls for an

evidentiary hearing in this matter.

III.   CONCLUSION

       Because the District Court did not address Fres-co’s likelihood of success on the

merits, the balance of the equities, and the public interest, we will remand for further

analysis of the preliminary injunction factors consistent with this opinion. The

preliminary injunction issued by the District Court will remain in place pending

reconsideration.

                                               16