API Americas Inc. v. Miller
2:17-cv-02617
D. Kan.Nov 7, 2017Background
- API Americas (API) sued former employee Paul W. Miller after he resigned in Sept. 2017, alleging he downloaded and emailed API trade secrets to his personal account and then went to work for a direct competitor, Univacco.
- Miller had an Employee Confidentiality, Non‑Solicitation and Non‑Competition Agreement (2011) that prohibited use/disclosure of confidential information, competition with API, and solicitation of API customers; it also acknowledged irreparable harm from breaches and entitlement to injunctive relief.
- API alleges Miller was its Hallmark account manager, that Hallmark is a key customer (API opened a facility to serve it), and that Miller solicited Hallmark on Univacco’s behalf, including presenting/testing at Hallmark in October 2017.
- API sought an ex parte temporary restraining order (TRO) preserving the status quo, requiring return of confidential materials, barring competition/employment with Univacco, and prohibiting solicitation of API customers pending a preliminary injunction hearing.
- Miller was served and failed to timely respond; the court found statutory and Rule 65 authority to issue a TRO without bond and concluded API showed likely irreparable harm, likelihood of success on claims including breach of contract and trade secret/CFAA violations, and that injunctive relief served the public interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to issue TRO without bond | Rule 65 and federal/state statutes permit a TRO without bond to preserve status quo | No response filed | Court issued TRO without bond under Rule 65 and statutes cited |
| Enforceability of non‑compete/non‑solicit covenants | Covenants reasonable, Miller agreed they protect legitimate business and irreparable harm will follow breach | No response filed | Court enforced covenants temporarily; enjoined competition and solicitation pending hearing |
| Misappropriation of trade secrets / refusal to return materials | Miller downloaded and emailed confidential materials, refused to return, likely misused them for Univacco | No response filed | Court restrained Miller from disclosing/using confidential materials and ordered their return |
| Scope/duration of relief pending preliminary injunction | Immediate injunctive relief necessary to prevent Hallmark solicitation and irreparable loss while awaiting hearing | No response filed | TRO enjoins disclosure/use of API information, employment/consulting with competitor (Univacco), and solicitation of API customers until further order |
Key Cases Cited
- Snyder v. Am. Kennel Club, 575 F. Supp. 2d 1236 (D. Kan.) (TRO preserves status quo until preliminary injunction hearing)
- Equimed, Inc. v. Genstler, 925 F. Supp. 710 (D. Kan.) (issuance of injunctive relief is within court's sound discretion)
- Weber v. Tillman, 913 P.2d 84 (Kan. 1996) (non‑compete covenants enforceable if reasonable and not against public welfare)
- Coskey's Television & Radio Sales & Service, Inc. v. Foti, 602 A.2d 789 (N.J. Super. Ct. App. Div.) (employers have protectable interest in trade secrets and customer relationships)