Box v. J.B. Hunt Transport, Inc.
2017 Ark. App. 605
| Ark. Ct. App. | 2017Background
- David Box, a former J.B. Hunt employee (2000–2016), left to work for Hub Group as regional VP in Memphis; J.B. Hunt sued seeking injunctions based on three agreements signed by Box (2004 Confidentiality Agreement, 2013 Noncompete/Nonsolicit, and 2013–2015 Restricted Stock Agreements).
- J.B. Hunt obtained a temporary restraining order and preliminary injunction preventing Box from disclosing confidential information/trade secrets and from working for Hub Group for one year after his separation; the trial court relied on language in the agreements and testimony from J.B. Hunt witnesses.
- At the preliminary hearing J.B. Hunt presented witness testimony but introduced no specific confidential materials; Box testified he did not disclose J.B. Hunt information and his Hub Group duties differed from his most recent J.B. Hunt role.
- The trial court concluded J.B. Hunt showed irreparable harm and likelihood of success, in part by relying on contract recitals stating violations cause irreparable harm and permit injunctive relief.
- Box appealed the interlocutory injunction raising six arguments (including improper reliance on recital language, lack of proof of breach/likelihood of success, insufficient findings, retroactive application of Act 921, improper award of attorneys’ fees, and premature rulings pretrial).
- The Arkansas Court of Appeals denied appellee’s motion to dismiss as moot and reversed and remanded, holding the trial court abused its discretion because J.B. Hunt failed to show likelihood of success and the court made insufficient findings.
Issues
| Issue | Plaintiff's Argument (J.B. Hunt) | Defendant's Argument (Box) | Held |
|---|---|---|---|
| Whether trial court properly relied on recitals/contract provisions to grant injunctive relief | Recitals and agreement language (confidentiality, restricted-stock, noncompete) show Box agreed injunctive relief is appropriate and that violations cause irreparable harm | Court may not treat contractual recitals as a substitute for evidentiary proof of a likely violation; must show factual basis | Court erred: relied impermissibly on recitals without required factual findings/evidence of violation |
| Whether J.B. Hunt demonstrated likelihood of success on breach of noncompete/nonsolicit (2013 agreement) | Box’s prior role gave access to confidential/trade-secret information that creates a risk of disclosure at Hub Group; therefore breach and unfair advantage likely | No evidence Box actually used or will inevitably use trade secrets; his Hub Group duties differ from his last two years at J.B. Hunt; testimony was conclusory | Court abused discretion: J.B. Hunt failed to prove specific confidential information or inevitability of disclosure; likelihood of success not shown |
| Whether restricted-stock agreements justified injunctive relief (2013–2015 RSAs) | RSAs include broad noncompete and express statement that violation causes irreparable harm, authorizing injunctive relief | Signing agreements does not conclusively prove a breach occurred; required factual showing that Box’s Hub Group role delivers similar services to those in preceding two years | Court erred: no finding that Box performed similar services or otherwise violated RSA terms; injunction unsupported |
| Whether 2004 Confidentiality Agreement authorized injunction against competitive employment absent demonstration of trade-secret possession | Agreement contemplates injunction if employee’s knowledge and skills are inextricably connected to trade secrets and pose substantial risk of disclosure | Trial court misapplied the provision by enjoining employment based on general confidential-information findings rather than trade-secret findings | Court erred: no finding Box possessed trade secrets or would inevitably disclose them; injunction improper |
| Award of attorneys’ fees and pretrial evidentiary rulings | J.B. Hunt argues fees and making hearing evidence part of trial record were proper incident to the interlocutory order | Box contends award was premature and trial-court rulings were improper/anticipatory | Fees reversed as premature; evidentiary rule re: making hearing evidence part of the trial record is consistent with Ark. R. Civ. P. 65(a)(2) but injunctive order reversed |
Key Cases Cited
- Baptist Health v. Murphy, 365 Ark. 115, 225 S.W.3d 800 (Ark. 2006) (standard of review and two essential components for preliminary injunction: irreparable harm and likelihood of success on the merits)
- Muntaqim v. Hobbs, 2017 Ark. 97, 514 S.W.3d 464 (Ark. 2017) (party seeking preliminary injunction must prove reasonable probability of success)
- Wilson v. Pulaski Ass’n of Classroom Teachers, 330 Ark. 298, 954 S.W.2d 221 (Ark. 1997) (proof of facts required to obtain injunctive relief)
- Burleigh v. Ctr. Point Contractors, Inc., 474 S.W.3d 887 (Ark. App. 2015) (common-law standards for enforceable noncompete: protectable interest, reasonable geographic limit, reasonable time limit)
- Bendinger v. Marshalltown Trowell Co., 338 Ark. 410, 994 S.W.2d 468 (Ark. 1999) (emphasis that courts disfavor restraints on employee competition; experience/skills cannot be erased)