Court Denied Injunction in Trade Secret Case
Massachusetts employers must now prove actual irreparable harm to block former staff from soliciting specific client lists.
Updated on Oct. 14, 2026 in Public Companies
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The Supreme Judicial Court affirmed a lower court decision denying a preliminary injunction to block two former employees from soliciting 75 customers. The ruling rejected the argument that irreparable harm should be presumed in trade secret misappropriation cases.
Why it matters
The decision clarifies that employers cannot rely on a simple showing of potential merit to secure court-ordered restraints on former staff. Businesses now face a higher evidentiary burden to prove actual, non-speculative harm before a judge will limit competition.
The ruling impacts a dispute over 75 Daikin customers and a requested one-year solicitation ban. The decision is detailed in a 14-page court document.
The players
Daikin Applied Americas Inc.
A multinational manufacturer of HVAC equipment and industrial climate control systems.
RPAC LLC
A competing firm formed by the former employees named in the trade secret litigation.
Supreme Judicial Court
The highest appellate court in Massachusetts responsible for interpreting state laws.
The details
The Massachusetts Supreme Judicial Court determined that the Massachusetts Uniform Trade Secrets Act does not create a presumption of irreparable harm merely because a plaintiff establishes a likelihood of success on the merits. To secure an injunction, employers must provide concrete evidence of damages that money cannot repair. While the court declined to enforce the solicitation ban, the defendants agreed to return and refrain from using confidential information.
Timeline
The Supreme Judicial Court issued the decision on October 14, 2026.
Market Landscape
This decision clarifies the scope of the Massachusetts Uniform Trade Secrets Act regarding judicial intervention. It follows a precedent where the court affirms that state statute does not supersede long-standing common-law equity requirements.
Business owners should review restrictive covenants and trade secret policies with legal counsel, as courts now demand clear proof of harm for injunctions. Relying on boilerplate claims of irreparable injury will likely fail to secure immediate competitive protections.
The takeaway
Operators must move beyond generalized claims of harm to secure court-ordered injunctions against departing employees. Focus on documenting specific, measurable damages to the business to meet this heightened evidentiary standard.
Further reading
Learn more about legal precedents affecting Public Companies in the state.
Source note: This article includes information reported by Massachusetts Lawyers Weekly.
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Should courts automatically stop former employees from soliciting customers if trade secrets were allegedly misused?
