Elepreneurs Holdings, LLC v. Benson, 4:21-cv-00026

Elepreneurs operates a network-marketing distributor system for health products; Distributors sign electronic agreements (Agreement, Policies & Procedures, Social Media Policy).
Defendants Lori Benson, Andrea Althaus, and Lindsey Buboltz were Elepreneurs Distributors who resigned on December 15, 2020; state court entered a TRO and the matter was removed to federal court.
Plaintiffs sought a preliminary injunction to (a) bar disparagement, (b) bar false/misleading posts, (c) bar solicitation of Elepreneurs’ distributors/customers/vendors until May 15, 2021, and (d) bar disclosure of Elepreneurs’ confidential information/trade secrets (notably the Distributor List).
Court evaluated claims for breach of contract, tortious interference, and trade-secret misappropriation at the preliminary-injunction stage.
Court found a prima facie breach of contract by Benson (solicitation), a prima facie trade-secret risk/possession by Althaus (Distributor List), and no viable claims against Buboltz; accordingly granted a narrow injunction against Benson and Althaus and denied other relief.
Relief: Benson enjoined from soliciting/inducing/hiring Elepreneurs distributors/employees/customers/suppliers/vendors in violation of the Agreement until May 15, 2021; Althaus enjoined from revealing Plaintiffs’ confidential information and ordered to turn over the Distributor List within ten days; no injunction as to Buboltz; bond set at $1,000.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Existence and breach of contract	Defendants signed electronic Agreements and violated no-solicitation clause by soliciting downstream Distributors	Defendants dispute signing and say solicitation was limited to personally sponsored downline (permitted)	Prima facie breach shown for Benson only; insufficient for Althaus and Buboltz
Tortious interference	Benson willfully solicited Sessums, harming Elepreneurs’ contracts	Defendants say no successful solicitation and no evidence of actual damages	Not shown — no evidence of actual loss; tortious-interference claim fails at PI stage
Trade-secret misappropriation (Distributor List)	Distributor List is confidential/trade secret; Defendants possess and will use it to raid customers/distributors	Defendants largely deny possession/access (except Althaus alleged to have the list)	Prima facie TUTSA/common-law trade-secret showing as to Althaus only; not shown for Benson or Buboltz; injunction entered against Althaus and list turnover ordered
Scope, irreparable harm, balance, public interest	Network-model losses are irreparable; broad injunction needed to prevent recruitment and disclosure	Requested injunction is overbroad and unjustified as to some defendants	Narrow injunctions justified: bar Benson’s impermissible solicitation until May 15, 2021; bar Althaus from disclosing confidential info; deny broader non-disparagement and relief as to Buboltz; bond $1,000

Nichols v. Alcatel USA, Inc., 532 F.3d 364 (5th Cir. 2008) (articulates the four-factor preliminary injunction test)
Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (movant must show likely irreparable harm and that injunction is in the public interest)
Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) (injunctive relief is within the court's equitable discretion; consider public consequences)
Mumfrey v. CVS Pharm., Inc., 719 F.3d 392 (5th Cir. 2013) (elements of tortious interference under Texas law)
Phillips v. Frey, 20 F.3d 623 (5th Cir. 1994) (elements for trade-secret misappropriation under Texas law)
Janvey v. Alguire, 647 F.3d 585 (5th Cir. 2011) (irreparable harm defined by inadequacy of monetary relief)
Wells v. Minn. Life Ins. Co., 885 F.3d 885 (5th Cir. 2018) (Texas breach-of-contract elements)
Kaepa Inc. v. Achilles Corp., 76 F.3d 624 (5th Cir. 1996) (district court’s discretion in setting Rule 65(c) bond)