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Lumex, Inc. v. Highsmith - 919 F. Supp. 624 (E.D.N.Y. 1996)

Rule:

A showing of irreparable harm is perhaps considered the single most important requirement with regard to the granting of a preliminary injunction. Essential to a showing of irreparable harm is the unavailability or at least inadequacy of a money damages award. In addition, the applicant must establish more than a mere possibility of irreparable harm, rather, it must show that irreparable harm is likely to occur. The basis for injunctive relief in the federal courts has always been irreparable injury and the inadequacy of legal remedies. In addition, the applicant must establish more than a mere "possibility" of irreparable harm, rather, it must show that irreparable harm is "likely" to occur.

Facts:

Cybex was a division of Lumex, Inc., which manufactured various types of fitness equipment. Defendant Gregory R. Highsmith was first employed by Lumex as an assistant product manager and was soon thereafter named Cybex worldwide marketing manager. At the time he was hired, Highsmith signed a "Technical Information and Non-Competition Agreement" ("Agreement") in which he agreed not to disclose Lumex's confidential information and further agreed not to work any competitor of Lumex for a period of six months after termination of his employment with Lumex. Later, Highsmith resigned from his position with Lumex, and he accepted a position with defendant Life Fitness, a direct competitor of Lumex. Lumex filed a lawsuit against defendants in New York state court, which granted Lumex's motion for a temporary restraining order that barred Highsmith from, inter alia, working for Life Fitness for a period of six months. Defendants removed the lawsuit to federal district court, where Lumex filed a motion for a preliminary injunction seeking to: (1) enforce a non-competition agreement to prevent Highsmith from working for Life Fitness for a period of six months; (2) to prevent Highsmith from disclosing any trade secrets and confidential information, and; (3) to prevent Highsmith from soliciting or attempting to solicit Lumex's customers.

Issue:

Did Lumex establish its entitlement to preliminary injunctive relief?

Answer:

Yes.

Conclusion:

The court granted Lumex's motion for a preliminary injunction. The court found that Lumex established, by a preponderance of the evidence, that it would be irreparably harmed if Highsmith revealed to Life Fitness the trade secrets and confidential information Highsmith learned in his high-level position with Lumex. In addition, Lumex established the right to a preliminary injunction because the potential loss of Lumex's present market and loss of the advantage of being the market leader could constitute irreparable harm. The court further found that the six-month restriction on Highsmith's commencement of employment with Life Fitness was reasonable and enforceable.

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