Injunction, Declaratory Judgment, or Damages: Accomplishing the Client Objective

In litigating cases, clients have many oft-competing interests: moving the case along quickly and minimizing costs versus leaving no stone unturned, attacking quickly versus reserving legal spend for later on in case a quick resolution is not forthcoming, stopping future harm and protecting the brand versus obtaining the largest judgment, and sending a message to other wrongdoers versus not spending too much on a case against a quasi-solvent defendant, among others. Depending on the client’s wishes, different strategies may be appropriate under identical fact patterns.

In this article, we take hypothetical claims against a former employee and the former employee’s new employer under tortious interference with contract, breach of a noncompete agreement, and the Defend Trade Secrets Act of 2016 (DTSA) and map out differing strategies to accomplish the client objective. While we’ve played out this hypothetical under these causes of action (and chosen it given that the Great Resignation is leading to increased movement), the same types of considerations exist for other tort claims.

A Hypothetical Case

Assume that a client informs you that its best salesperson has just left to join your main competitor, and you’ve already received notice that one of your top customers is terminating its agreement with you because of that. You have a noncompete agreement with this employee, and the employee’s new position falls within the restrictions of this agreement. You believe that the employee has taken a confidential customer list.

You have a breach of contract claim and a tortious interference claim against the former employee. If the new employer were aware or is now made aware of the restrictive covenant, there is a tortious interference claim against the new employer for the loss of those clients improperly solicited and, depending on what it knew and when it knew it, for inducing the former employee to breach the restrictive covenant.

Depending on the client’s interests and resources, injunctive relief, declaratory judgment claims, or money damages are available. Below, we consider the elements of the claims available and then discuss the factors that warrant whether to use injunctive, declaratory judgment, or money damages remedies.

The Claims

Noncompete claims. Noncompete claims are contract claims, but they have common-law and, depending on the state, statutory overlays absent in many other commercial contracts. These contracts are scrutinized more heavily than other contracts. For a restrictive covenant to be enforceable, it generally must (1) reasonably protect a legitimate business interest of the employer, (2) be limited in scope, and (3) not violate the public interest.¹ Before a court can determine whether a restrictive covenant is reasonable, it must make two threshold determinations: (1) that the covenant is ancillary to a valid contract and (2) that the covenant is supported by adequate consideration. In addition to this common-law requirement, states have a variety of specific restrictions.²

Assuming, however, that the agreement is valid, the claim is relatively simple. One must show that the employee breached, the employer performed, and the employer was damaged by the breach.

Tortious interference. Tortious interference with a contract requires that there is a valid contract; that the defendant knew of the contract; and that the defendant intentionally and unjustifiably caused a breach of it, resulting in damages to the plaintiff.³ Tortious interference with a business expectancy requires a reasonable expectation of entering into a valid business relationship, the defendant’s knowledge of this expectation, the purposeful prevention of this legitimate expectation from coming to fruition, and damages.⁴

These claims are often brought against departing employees for interfering with customer relationships in violation of their noncompete agreements, as well as against the new employer for interfering with both the customer relationship and the noncompete agreement itself. Before bringing these claims against a new employer, it is critical to ensure that the new employer has notice of the noncompete agreement and the violation of it because the tortious interference claim has an actual knowledge requirement for the defendant. In some circumstances, merely notifying the new employer of the noncompete agreement may solve the problem.

DTSA. Although all states had their own protection for trade secrets, either at common law or by statute, Congress enacted the DTSA to create a federal right of action to protect trade secrets.⁵ Under the DTSA, there are three requirements for a trade secret: information (1) that is not generally known or readily ascertainable, (2) that has independent economic value through secrecy, and (3) for which reasonable efforts have been taken to maintain that secrecy.⁶ The DTSA protects against misappropriation, which includes improper acquisition, use, or disclosure of the trade secret.⁷

Frequently relevant to the issue of departing employees is the customer list. A customer list will be protected if its creation required substantial time, effort, and expense.⁸ If a list is developed over a long period of time and kept in confidence, it is more likely to be a trade secret.⁹ “For an owner’s customer information to be a trade secret, it must have a particularity that gives it a business value derived from the information itself. . . . Information which is a mere distillation of general knowledge common to a particular trade, is not a trade secret.”¹⁰ Thus, courts have declined to find value in a customer list that could be obtained from the Yellow Pages or the internet,¹¹ in a compilation of buyers at well-known retailers,¹² and in pricing information that could be obtained by calling the dealer.¹³ Courts have found value, however, in a “preferred customer” list,¹⁴ in a customer list that was not readily ascertainable,¹⁵ in a customer list with individual customer preferences,¹⁶ in the names and detailed information of 1,200 customers,¹⁷ and in a list detailing the pricing differences among various customers.¹⁸

In other situations, employees may take sales manuals, pricing data, supplier information, or other information that may be a trade secret. DTSA claims are particularly powerful as they both confer federal jurisdiction and allow for the recovery of attorney fees.

The Remedies

Now that you have the claims set, the next question is what remedies are available.

Injunction. A preliminary injunction is both an effective and an aggressive way to try to stem the damage that often occurs in this hypothetical, as it cuts the damage down at an earlier stage and removes the advantage that defendants often have due to the length of litigation.

A preliminary injunction is an order at an early stage of the proceeding to restrain a party from taking certain actions. Courts consider the following four factors in deciding whether to issue both temporary restraining orders (TROs) and preliminary injunctions:

1. Whether the movant will be irreparably harmed if the injunction does not issue
2. Whether the movant is likely to prevail on the merits
3. The balance of harms between the movant and the respondent if the injunction is allowed
4. Whether the public interest will be served by the injunction¹⁹

The showing of irreparable harm is an important requisite for the movant.²⁰ In the simplest definition, an injury is irreparable when no other remedy can fix it.²¹ Irreparable harm can be found in both the restrictive covenant and trade secret causes of action. Proof of continuing use of valid trade secrets is often sufficient evidence of irreparable harm due to the difficulty in calculating the value inherent in losing the secrecy of the trade secrets.²² Their value is in their secrecy itself, as the owner forwent other potential intellectual property protections to keep it secret. The potential for use and disclosure threatens to destroy the entire basis on which the trade secret rests.

Continued improper solicitation of clients by a former employee also gives rise to irreparable harm.²³ The requirement of irreparable harm is usually satisfied in cases involving restrictive covenants because the precise amount of damages is difficult to assess.²⁴ The effect on future profits is irreparable if the solicitations are based on word-of-mouth referrals.²⁵ Irreparable harm may be found in the solicitation of the former employer’s customers because of the associated loss of goodwill.²⁶ The movant, however, must be able to articulate harm beyond mere lost revenue.²⁷ Courts often understand the economic reality that once a client is lost, it is lost forever and no order of the court will bring it back. In businesses where relationships are paramount (which is most businesses), if the relationship is even temporarily interrupted, it is unlikely that it will be restarted. The point of the noncompete agreement is to give the employer the chance to transition the relationship without interference from the prior client contact; once the contact interferes, this strategy is ineffective.

Likelihood of success on the merits is another key element when seeking injunctive relief. Courts disagree as to how great a likelihood of success is needed for the movant to prevail. Some courts require a “substantial likelihood of success.”²⁸ Others need to see that the movant’s probability of prevailing is greater than 50 percent.²⁹ Other courts hold that movants “need only show that they raise a ‘fair question’ about the existence of their right and that the court should preserve the status quo until the case can be decided on the merits.”³⁰ In short, “[a] TRO [or preliminary injunction] should not be refused or dissolved merely because the court may not be absolutely certain the [movant] has the right he [or she] claims.”³¹

Success on the merits also presents some subject matter–specific requirements. When a court finds that a defendant has merely appropriated the plaintiff’s trade secrets and has not yet used or disclosed them, some courts apply the controversial theory of inevitable disclosure to find a likelihood of success.³² The inevitable disclosure doctrine balances the similarities between the employee’s former position and the new one, the level of competition between the employers, and the new employer’s actions (if any) to prevent unlawful disclosures.³³ Simply alleging that one fears misuse or that a former employee is highly skilled in a trade secret is insufficient to allege inevitable disclosure.³⁴

In the noncompete context, success on the merits often comes down to the basic enforceability of the agreement. Assuming no statutory violation, was it reasonable? For the tortious interference claim, what was the nature of the interference and the parties’ knowledge?

If preliminary relief is granted to the movant, the respondent might suffer irreparable harm, which is the point of the court considering the balance of harms. The same potential harms to the movant without an injunction might apply in reverse to the respondent. If the same alleged trade secret is being used by two companies, each claiming an exclusive right to it, the respondent’s harm if the injunction is granted mirrors the movant’s harm if it is denied.

In a trade secrets case, the court must balance the interest of the movant in its trade secrets with the rights of the respondent to freely engage in lawful business activities, including competitive solicitation of business.³⁵ Evidence that an employee knowingly used a trade secret is strong evidence of harm to the employer.³⁶ The balance of harms tips against a party that would gain from unlawful activities.³⁷

In a restrictive covenant or tortious interference case, the benefit of having an agreement enforced is a factor that favors the employer.³⁸ The difficulty in finding suitable and adequate work is a factor that favors the employee.³⁹ This concern, however, is sometimes discounted when there is evidence that the employee knowingly violated the restrictive covenant.⁴⁰

A court will also consider the public interest before granting preliminary relief, that is, the greater social and economic impact that the injunction may have.⁴¹ Often, courts recite the public interest factor without much analysis. The public interest has been criticized as a makeweight, something to mention in support of a conclusion already reached rather than something that contributes to an analysis.⁴²

Courts have held that the public has an interest in the protection of intellectual property and trade secrets.⁴³ In a noncompete case, both sides have a public interest argument. For the employer, there is a public interest in enforcing contracts, and, if noncompete agreements are not enforced, employers may be unwilling to provide employees with training and skills. For the employee, the public interest is served by people being able to work in their chosen profession in their own geographic area. For some professions, such as physicians, the public interest may not be served by disrupting the doctor-patient relationship and having the doctor move to be able to work.

A critical aspect of an injunction—one that certainly should be discussed before getting an injunction—is a bond. Rule 65(c) of the Federal Rules of Civil Procedure provides “a mechanism for reimbursing an enjoined party for harm it suffers as a result of an improvidently issued injunction or restraining order.”⁴⁴ In drafting Rule 65(c) to require security from the party seeking the injunction, Congress aimed “to cure a serious problem of ‘ill-considered injunctions without notice.’”⁴⁵ However, in summary proceedings, even those with notice, there is a high probability that a court will issue a TRO or preliminary injunction only to decide later that the movant was wrong on the merits, or an appellate court may ultimately decide that the trial court had made a mistake in granting the injunction. In setting a bond, the trial court should ascertain those damages that are likely to accrue if it later decides that the injunction was issued erroneously.⁴⁶

As to the specifics of whether a bond is required, some courts take the position that the requirement of a bond is “mandatory and unambiguous.”⁴⁷ Others hold that a bond is discretionary. The specifics are very dependent on the jurisdiction, but, overall, it is an issue to be aware of. Inability to post a bond counsels against asking for an injunction.

Declaratory judgment. A declaratory judgment action is one in which the plaintiff asks the court for a ruling on the parties’ respective rights in a matter, often in a situation involving the interpretation of a contract. The purpose of the action is to “declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought,” where there is an “actual controversy.”⁴⁸

Injunctions are considered quickly in an emergency, but the court has to consider the merits plus collateral issues, such as the strength of the showing on the merits, the irreparable harm to the parties depending on the order entered, whether to issue a bond and its amount, and the public interest.

Declaratory judgment actions omit the need to demonstrate these collateral issues. The main collateral issue litigated in declaratory judgment actions is whether there is an actual controversy, an issue for which there is “no bright line rule.”⁴⁹ The question is “whether the adversity of legal interests that exists between the parties is ‘real and substantial’ and ‘admi[ts] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.’”⁵⁰ There must be more than two opposing positions that one party would theoretically like to know the answer to, and the controversy must rise to one in which the parties have “taken steps or pursued a course of conduct” that would result in litigation absent a declaration.⁵¹ For cases involving a dispute about a contract, a breach need not have occurred.⁵² If this one collateral issue is solved, the declaratory judgment action saves having to litigate the collateral issues in an injunction action.

While declaratory judgment actions typically are not as fast as injunction proceedings, they can be expedited far more than other causes of action. In many declaratory judgment proceedings, discovery is either not necessary or more limited. Under Federal Rule of Civil Procedure 57, declaratory judgment actions can be speedily determined if the trial court exercises its discretion to do so. While the court has such discretion, factors to consider include whether the declaratory judgment relies on legal rather than factual issues,⁵³ whether there are violations of important rights that are occurring or imminent,⁵⁴ and whether the declaratory judgment will resolve the matter or substantially narrow the issues.⁵⁵

Money damages. In any case, money damages are, of course, the norm. Money damages can be sought in breach of contract, DTSA, and tortious interference claims for the harm caused, along with attorney fees under DTSA and contract claims (assuming that a fee-shifting provision exists in the contract) and punitive damages under tortious interference.

The Decision

Now that we know the claims and the potential remedies, we can approach the decision depending upon the particulars of the situation.

Injunction. An injunction is often the remedy of choice in cases like our hypothetical, either with or without a TRO. There are good reasons why that is the case. An injunction is essential to recover a trade secret. It stems the damage. It gets results fast.

It also is very effective. An employee can be enjoined to stop the violative conduct, return the wrongfully taken assets, and no longer contact clients. The new employer can be enjoined from using the trade secret or from keeping the employee in a position in violation of the agreement. Each of these outcomes provides significant competitive and strategic benefits to the client. It shows an aggressive litigation posture that many new employers do not want to face. If former employees or new employers violate an injunction, they are on the wrong side of a contempt motion, so the injunction provides a powerful tool.

An injunction also frequently involves early and expedited discovery, which allows the client to assess the extent of the violation and potential damage. This discovery also makes the litigation more real for the new employer, whose employees now need to deal with the obligations and time commitments of discovery.

An additional advantage is that an injunction often results in a settlement. A motion for an injunction will many times result in a standstill agreement or other type of agreed-upon order to preserve the status quo and save both sides the risks and expenses associated with an injunction hearing. If an injunction hearing takes place, it provides a preview of the remainder of the case. It shows the parties the strengths and weaknesses of their positions; provides the judge’s perspective on the issues; and, regardless of whether or not an injunction is issued, lets both parties know what conduct is permissible for the remainder of the case. It therefore provides a good set of data for the parties to consider in their settlement calculus and, in fact, frequently results in a settlement.

There are some significant downsides to injunctions, though. The first downside is the cost. Injunctions result in additional (and, in many cases, somewhat duplicative) discovery, extensive briefing, and essentially an additional trial. The second downside is the burden on the client. Expedited discovery and a second trial take significant client time, which is often difficult, especially when the client is trying to manage the fallout (i.e., repair the relationships) from an employee departure. Injunctions are sometimes pursued without the evidence needed in the party’s possession, with the party assuming that expedited discovery will provide the missing pieces. Courts often significantly limit this discovery, which can create difficulties for the party seeking the injunction. An injunction requires, in addition to the merits, a showing of the factors for injunctive relief. Sometimes these factors cut against a client that might have an otherwise strong case on the elements of a claim. Losing an injunction often puts the client at a disadvantage in the litigation, and therefore there are times when the need to show the injunctive relief factors (other than success on the merits) counsels against seeking an injunction and favors instead a merits trial. Finally, but certainly not least important, the requirement of a bond and the possibility of damages for a wrongful injunction must be considered. Injunctive bonds can be set very high depending on the circumstances, and it is a Pyrrhic victory at best for a client to spend all the time and money to win an injunction hearing but not be able to post the bond. For clients with marginal merits cases especially, the damages of a wrongfully issued injunction can be a significant risk that counsels in favor of an alternate approach.

In our hypothetical, the injunction is typically a very good choice when the loss that the client is experiencing is very significant and when the client has a strong merits case, as this is the best way to get the quickest, most effective result.

Declaratory judgment. A declaratory judgment action in our hypothetical also has its advantages in the claim against the former employee, although it is less useful against the employer or the customer. Particularly where an employee has raised issues about the enforceability of a noncompete, an affirmative declaratory judgment action can provide a method to establish its validity. The declaratory judgment action itself may be enough to cause the new employer to reevaluate its desire to assist in the flouting of a noncompete clause.

While generally not as quick as an injunction, it is a proceeding that can move along more quickly than a damages claim, especially where the pleading can be tailored to limit the issues and avoid additional discovery that can be sought on the injunction factors or on damages. Many declaratory judgment actions can be resolved at the summary judgment stage, so they can be useful where the former employee may present very well at a hearing.

A significant benefit is cost savings. A declaratory judgment action avoids the two trials required for an injunction case, as well as the affidavits required for a TRO if one is sought before the injunction. Like an injunction, it sends a message to other employees as well and, being less muddied with other factors, is more useful to show other employees to potentially avoid a future breach as it is a simple statement that the contract is valid and enforceable. It also presents the advantage of no bond or damages for wrongful injunction, although there is, of course, the risk of fee shifting under substantive law depending on the jurisdiction and contract. For a broad noncompete agreement, the declaratory judgment case avoids the nontrivial concern of a TRO or injunction being issued, only to be deemed wrongful later, subjecting the client to damages.

The main downsides are enforcement and timing. Additional action is needed to go from a declaratory judgment to an order actually preventing the employee from engaging in the violative conduct—though this may be more of a theoretical problem as it would seem that most other employers would avoid hiring the breaching employee to perform conduct in violation of the noncompete when there has already been litigation and an unsuccessful attempt to challenge the agreement. In some cases, though, the court might declare that the employee has to sit out work for the length of time set forth in the restrictive covenant. Timing is an additional downside. If critical relationships are lost while the action is pending, the damage that the noncompete was intended to address might already be done; and, even with a successful outcome, the customer might be uninterested in returning to a relationship with your client.

In our hypothetical, the declaratory judgment may be a good choice for a cost-conscious client, in a situation where the employee is judgment proof so that damages discovery is a waste of time and money; for a broad noncompete; or where the relationships taken are not worth the extra time and expenditure to get an injunction. Declaratory judgments are useless to recover trade secrets or to prevent further customer losses: they take too long and don’t order their return or prevent them from being used in the meantime.

Damages. Bringing a claim for damages has the advantage of being a known quantity for most practitioners. Aside from the normal complexities of litigation, it is relatively straightforward from a strategic perspective. In situations like our hypothetical, if the defendant employee or the new employer wants to keep acting in the violative manner, the damages increase the longer the behavior continues. The stakes therefore increase for the defendants with each action, which is particularly concerning if there are fee-shifting or punitive damages concerns. The litigation may cause the employee and particularly the new employer to rethink their risk-benefit calculus and decide it is not worth the risk. Furthermore, this approach avoids the cost of two trials and gives a more enforceable result than the declaratory judgment action.

The downside to this approach is that the loss of a client relationship is many times permanent, and a judgment is almost always not as preferable as avoiding the harm in the first place. There is the additional risk of collectability, which is particularly acute in cases against many employees.

In one case, the plaintiff pursued money damages for loss of employees to a competitor. The plaintiff wanted a money damages award that would ruin the competitor, which had caused a mass exodus of employees in breach of its fiduciary duties. The competitor continued in business, believing that its case on the merits was strong. In the meantime, the case slowly wended its way to trial, and the potential damages increased commensurately. Here, the defendant should have asked for a declaratory judgment or injunction to cut off the damages claim or to get an early determination about whether the damages would increase so that, if so, it could take remedial action to cut them off.

Conclusion

There is, of course, no reason why you cannot pursue multiple avenues. Cases seeking injunctive relief also often seek monetary damages. A declaratory judgment count can be added to a complaint with other claims. However, each of these approaches has its ideal time and place; and, as practitioners, we can often better serve our clients by thinking strategically about the costs and benefits of each approach rather than using a kitchen-sink approach.

Notes

1. See Scott v. Gen. Iron & Welding Co., 368 A.2d 111, 115 (Conn. 1976); see also Reliable Fire Equip. Co. v. Arredondo, 965 N.E.2d 393 (Ill. 2011) (requiring that the restrictive covenant “(1) is no greater than is required for the protection of a legitimate business interest of the employer-promisee; (2) does not impose undue hardship on the employee-promisor, and (3) is not injurious to the public”).

2. Illinois restricts use of noncompetes as to low-wage workers. 820 Ill. Comp. Stat. 90/10. Rhode Island prohibits their use with respect to low-wage employees and exempts employees under the Fair Labor Standards Act, students in a short-term job or internship, and those age 18 or younger. R.I. Gen. Laws § 28-59-3. Indiana has imposed particular requirements for a physician noncompete to be effective, including that the physician can purchase a release from it. Ind. Code § 25-22.5-5.5-2. Hawaii banned restrictive covenants in the tech industry. Haw. Rev. Stat. § 480-4(d). Washington limits noncompetes to 18 months, requires salary payment for a laid-off employee in order for a noncompete to be valid, and has income limits as to the ability to use the provisions at all. Wash. Rev. Code § 49.62.020. Massachusetts, in addition to other restrictions, has made continued employment insufficient consideration for a noncompete entered into during existing employment. Mass. Gen. Laws ch. 149, § 24L.

3. HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill. 2d 145, 154–55 (1989).

4. Dowd & Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 484 (1998).

5. Defend Trade Secrets Act of 2016, Pub. L. No. 114-153, § 2(e), 130 Stat. 376, 381–82 (2016) (codified at 18 U.S.C. § 1836).

6. 18 U.S.C. § 1839(3).

7. Id. § 1839(5).

8. See Courtesy Temp. Serv., Inc. v. Camacho, 272 Cal. Rptr. 352, 357 (Ct. App. 1990).

9. Thin Film Lab, Inc. v. Comito, 218 F. Supp. 2d 513, 522 (S.D.N.Y. 2002).

10. Lincoln Towers Ins. Agency v. Farrell, 425 N.E.2d 1034, 1037 (Ill. App. Ct. 1981) (quoting Bimba Mfg. Co. v. Starz Cylinder Co., 256 N.E.2d 357 (Ill. App. Ct. 1969)).

11. W. Med. Consultants, Inc. v. Johnson, 835 F. Supp. 554, 557–58 (D. Or. 1993); Weigh Sys. S., Inc. v. Mark’s Scales & Equip., Inc., 68 S.W.3d 299, 302 (Ark. 2002).

12. Art & Cook, Inc. v. Haber, 416 F. Supp. 3d 191, 196 (E.D.N.Y. 2017).

13. Lincoln Towers Ins. Agency, 425 N.E.2d at 1039.

14. Armour & Co. v. United Am. Food Processors, Inc., 345 N.E.2d 795 (Ill. App. Ct. 1976) (finding value where response to a general mailing would be 2.5–4 percent, but response to a preferred customer list would be as high as 50 percent).

15. Ackerman v. Kimball Int’l, Inc., 634 N.E.2d 778, 783 (Ind. Ct. App. 1994); Fred’s Stores of Miss., Inc. v. M&H Drugs, Inc., 725 So. 2d 902, 910 (Miss. 1998).

16. N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 46 (2d Cir. 1999).

17. Elmer Miller, Inc. v. Landis, 625 N.E.2d 338, 342 (Ill. App. Ct. 1993) (finding value where information was so detailed that a tailor could fill the customers’ orders without them having to visit the store).

18. Hilderman v. Enea TekSci, Inc., 551 F. Supp. 2d 1183, 1200 (S.D. Cal. 2008).

19. Univ. of Tex. v. Camenisch, 451 U.S. 390, 392 (1981).

20. Alabama v. U.S. Army Corps of Eng’rs, 424 F.3d 1118, 1133 (11th Cir. 2005) (“Preliminary injunctive relief derives from the necessity to restrain or compel conduct in those extraordinary situations where irreparable injury might result from delay or inaction. Indeed, preventing irreparable harm in the future is ‘the sine qua non of injunctive relief.’” (citation omitted)).

21. United States v. Am. Friends Serv. Comm., 419 U.S. 7, 11 (1974).

22. Liebert Corp. v. Mazur, 827 N.E.2d 909, 929 (Ill. App. Ct. 2005); Kozuch v. CRA-MAR Video Ctr., 478 N.E.2d 110, 114 (Ind. Ct. App. 1985). But see Nutzz.com v. Vertrue Inc., No. 1231-N, 2005 Del. Ch. LEXIS 101, at *39–40 (July 6, 2005) (finding that the availability of easily calculable damages and a constructive trust weigh against injunctive relief).

23. Laro Maint. Corp. v. Culkin, 681 N.Y.S.2d 79, 80 (App. Div. 1998); Am. Credit Indem. Co. v. Sacks, 262 Cal. Rptr. 92, 101 (Ct. App. 1989).

24. Agrimerica, Inc. v. Mathes, 524 N.E.2d 947, 953 (Ill. App. Ct. 1988).

25. Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 733 (Ind. 2008).

26. Gleeson v. Preferred Sourcing, LLC, 883 N.E.2d 164, 178 (Ind. Ct. App. 2008).

27. Reach Grp., L.L.C. v. Angelina Grp., 173 S.W.3d 834, 838 (Tex. App. 2005); Thermatool Corp. v. Borzym, 575 N.W.2d 334, 338–39 (Mich. Ct. App. 1998).

28. E.g., City of Tenakee Springs v. Block, 778 F.2d 1402, 1407 (9th Cir. 1985); Great Am. Ins. Co. v. Universal Builders, Inc., 53 B.R. 183, 185 (Bankr. M.D. Tenn. 1985); see also Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (requiring a showing that the movant is “likely” to succeed).

29. Abdul Wali v. Coughlin, 754 F.2d 1015, 1025 (2d Cir. 1985) (“A movant . . . need not show that success is an absolute certainty. He need only make a showing that the probability of his prevailing is better than fifty percent.”). But see Ill. Republican Party v. Pritzker, 973 F.3d 760, 763 (7th Cir. 2020) (“[The required showing] does not mean proof by a preponderance—once again, that would spill too far into the ultimate merits for something designed to protect both the parties and the process while the case is pending. But it normally includes a demonstration of how the applicant proposes to prove the key elements of its case.”); Mays v. Dart, 974 F.3d 810, 821–22 (7th Cir. 2020) (“[A] plaintiff must demonstrate that ‘its claim has some likelihood of success on the merits.’”).

30. Mister v. A.R.K. P’ship, 553 N.E.2d 1152, 1155 (Ill. App. Ct. 1990).

31. Hirschauer v. Chi. Sun-Times, 548 N.E.2d 630, 635 (Ill. App. Ct. 1989).

32. See Verizon Commc’ns Inc. v. Pizzirani, 462 F. Supp. 2d 648, 658 (E.D. Pa. 2006); Estee Lauder Cos. v. Batra, 430 F. Supp. 2d 158, 179 (S.D.N.Y. 2006); Minn. Mining & Mfg. Co. v. Francavilla, 191 F. Supp. 2d 270, 278 (D. Conn. 2002); Merck & Co. v. Lyon, 941 F. Supp. 1443, 1460 (M.D.N.C. 1996); Cardinal Freight Carriers, Inc. v. J.B. Hunt Transp. Servs., Inc., 987 S.W.2d 642, 646–47 (Ark. 1999); Liebert Corp. v. Mazur, 827 N.E.2d 909, 927 (Ill. App. Ct. 2005); Procter & Gamble Co. v. Stoneham, 747 N.E.2d 268, 278–79 (Ohio Ct. App. 2000); Rugen v. Interactive Bus. Sys., Inc., 864 S.W.2d 548, 552 (Tex. App. 1993); Solutec Corp. v. Agnew, No. 16105-6-III, 1997 Wash. App. LEXIS 2130, at *22–26 (Dec. 30, 1997). But see Bourns, Inc. v. Raychem Corp., 331 F.3d 704, 708 (9th Cir. 2003) (finding that California courts have not adopted the inevitable disclosure doctrine as it provides an unfair restraint of employment in favor of employers); INVESCO Institutional (N.A.), Inc. v. Johnson, 500 F. Supp. 2d 701, 710 (W.D. Ky. 2007) (same for Kentucky law); Degussa Admixtures, Inc. v. Burnett, 471 F. Supp. 2d 848, 856 (W.D. Mich. 2007) (same for Michigan law); Safety-Kleen Sys., Inc. v. McGinn, 233 F. Supp. 2d 121, 124 (D. Mass. 2002) (same for Massachusetts law); Del Monte Fresh Produce Co. v. Dole Food Co., 148 F. Supp. 2d 1326, 1336–37 (S.D. Fla. 2001) (same for Florida law); LeJeune v. Coin Acceptors, Inc., 849 A.2d 451, 471 (Md. 2004) (same for Maryland law).

33. Merck & Co., 941 F. Supp. at 1460; Cardinal Freight Carriers, 987 S.W.2d at 647; Liebert Corp., 827 N.E.2d at 927–28.

34. Dearborn v. Everett J. Prescott, Inc., 486 F. Supp. 2d 802, 820 (S.D. Ind. 2007); Carboline Co. v. Lebeck, 990 F. Supp. 762, 767 (E.D. Mo. 1997); Strata Mktg., Inc. v. Murphy, 740 N.E.2d 1166, 1177–78 (Ill. App. Ct. 2000); CSC Consulting, Inc. v. Arnold, 13 Mass. L. Rep. 535 (Super. Ct. 2001).

35. Greenly v. Cooper, 143 Cal. Rptr. 514, 520 (Ct. App. 1978); see also TouchPoint Sols., Inc. v. Eastman Kodak Co., 345 F. Supp. 2d 23, 32 (D. Mass. 2004).

36. Greenly, 143 Cal. Rptr. at 520–21.

37. See In re Zyprexa Injunction, 474 F. Supp. 2d 385, 425 (E.D.N.Y. 2007); Comput. Assocs. Int’l v. Quest Software, Inc., 333 F. Supp. 2d 688, 701 (N.D. Ill. 2004).

38. Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 733 (Ind. 2008).

39. Ma & Pa, Inc. v. Kelly, 342 N.W.2d 500, 502–03 (Iowa 1984); Coskey’s Television & Radio Sales & Serv., Inc. v. Foti, 602 A.2d 789, 796 (N.J. Super. Ct. App. Div. 1992).

40. See Gleeson v. Preferred Sourcing, LLC, 883 N.E.2d 164, 178 (Ind. Ct. App. 2008) (noting that in addition to attempting to disguise her direct competition with her former employer, an employee continued to solicit former customers even after being sent multiple cease and desist letters).

41. See, e.g., Croskey St. Concerned Citizens v. Romney, 459 F.2d 109 (3d Cir. 1972) (affirming denial of a preliminary injunction to citizens challenging the building of low-rent housing because of the urgent need for low-cost public housing).

42. Orin H. Lewis, The Wild Card That Is the Public Interest: Putting a New Face on the Fourth Preliminary Injunction Factor, 72 Tex. L. Rev. 849, 850 (1994).

43. CDI Energy Servs., Inc. v. W. River Pumps, Inc., No. 1:07-cv-085, 2007 U.S. Dist. LEXIS 86293, at *15 (D.N.D. Nov. 20, 2007).

44. Hoechst Diafoil Co. v. Nan Ya Plastics Corp., 174 F.3d 411, 421 n.3 (4th Cir. 1999).

45. Granny Goose Foods, Inc. v. Brotherhood of Teamsters & Auto Truck Drivers, Loc. No. 70, 415 U.S. 423, 438 (1974) (citing H.R. Rep. No. 63-627, at 25 (1914)).

46. See Eide v. Bierbaum, 472 N.W.2d 193, 194 (Minn. Ct. App. 1991).

47. Hoechst Diafoil Co., 174 F.3d at 421.

48. 28 U.S.C. § 2201.

49. 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1376 (Fed. Cir. 2012). In one case, an employee who sought a declaratory judgment that he could accept a job offer was met with a motion to dismiss, arguing that he had to disclose the job offer, after which the former employer subpoenaed the potential new employer, which promptly withdrew the offer.

50. Nike, Inc. v. Already, LLC, 663 F.3d 89, 95–96 (2d Cir. 2011) (alteration in original) (quoting MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007)); see also Crown Drug Co. v. Revlon, Inc., 703 F.2d 240, 243 (7th Cir. 1983); Shell Gulf of Mex. Inc. v. Ctr. for Biological Diversity, Inc., 771 F.3d 632, 637 (9th Cir. 2014). Compare Sheng-Yen Lu v. King County, 38 P.3d 1040, 1043 (Wash. Ct. App. 2002) (not ripe for declaratory judgment), with Wash. State Hous. Fin. Comm’n v. Nat’l Homebuyers Fund, Inc., 193 Wash. 2d 704, 719 (2019) (declaratory judgment appropriate).

51. Fiberlight, LLC v. Nat’l R.R. Passenger Corp., 81 F. Supp. 3d 93, 106 (D.D.C. 2015).

52. In re Joey’s Steakhouse, LLC, 474 B.R. 167, 184 (Bankr. E.D. Pa. 2012).

53. County of Butler v. Wolf, No. 2:20-cv-677, 2020 U.S. Dist. LEXIS 93494, at *7 (W.D. Pa. May 28, 2020).

54. County of Morris v. Nationalist Movement, 273 F.3d 527 (3d Cir. 2001).

55. Walsh/Granite JV v. HDR Eng’g, Inc., No. 2:17-cv-558, 2018 U.S. Dist. LEXIS 232490, at *5 (W.D. Pa. Jan. 3, 2018).