Midwest Sign & Screen Printing Supply Co. v. Robert Dalpe & Laird Plastics, Inc.
386 F. Supp. 3d 1037
D. Me.2019Background
- Midwest (Minnesota) employed Dalpe as Northwest Sales Manager; he signed a 2015 Confidentiality, Nonsolicitation and Noncompetition Agreement upon promotion.
- Agreement contained: perpetual nondisclosure, immediate return/destroy clause, and 12-month non-compete/non-solicit provisions (no geographic or clear product-role limits).
- Dalpe resigned, began at Laird (Portland) shortly after, and had emailed numerous Midwest documents from his work account to his personal account before leaving (P&L, margin reports, ~2,700-customer list).
- Midwest sued and sought an ex parte TRO / preliminary injunction to bar Dalpe from "working for or assisting" Laird in capacities that compete with Midwest and to enjoin use/disclosure of confidential information.
- Defendants represented Dalpe deleted Midwest files, retained a forensics firm, and Laird imposed internal restrictions limiting Dalpe’s involvement with overlapping products/customers during the 12‑month restrictive period.
- Court treated the TRO as a preliminary-injunction motion and denied it: found non-compete language likely overbroad/unenforceable, insufficient evidence of use/disclosure or inevitable misappropriation, and no clear showing of irreparable harm.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of non-compete | Agreement bars Dalpe from working for entities that offer competing products/services for 12 months; Midwest seeks enforcement | Non-compete is unreasonably broad (no geographic limit; vague definition of "compete"); would bar many unrelated jobs | Court: non-competes lack territorial limit and unacceptably overbroad in scope; likely unenforceable as written (but blue‑penciling to Pacific Northwest territory is reasonable) |
| Breach of non-retention / nondisclosure provisions | Dalpe retained confidential files and thus breached obligations; seeks injunction to prevent use/disclosure | Dalpe admits retaining but says he deleted files, retained forensic firm, and has not used or disclosed materials | Court: retention occurred but evidence shows deletion and no use/disclosure; remedy limited to return/destruction (which has occurred); no likelihood of breach warranting injunction |
| Trade-secret misappropriation (DTSA/MUTSA/OUTSA/WUTSA) | Copying and possession of confidential files implies misappropriation or threatened misuse | No evidence Dalpe disclosed or used the information; no improper acquisition by Laird; protections and assurances in place | Court: plaintiff failed to show "use" or threatened misappropriation or inevitable disclosure; not likely to succeed on merits |
| Irreparable harm and balance of harms | Unauthorized use/disclosure and loss of goodwill cannot be adequately compensated; injunction necessary | Defendants would suffer operational and employment harms; Laird imposed restrictions and Dalpe deleted files | Court: plaintiff failed to show immediate, likely irreparable harm; balance of harms and public interest do not favor injunction; DENIED |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (establishes that injunctions require likelihood of irreparable harm and are "extraordinary").
- Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109 (8th Cir. 1981) (four-factor test for preliminary injunctions: likelihood of success, irreparable harm, balance of harms, public interest).
- Kallok v. Medtronic, 573 N.W.2d 356 (Minn. 1998) (restrictive covenant enforceability requires reasonable scope and protection of legitimate employer interests).
- Modern Controls, Inc. v. Andreadakis, 578 F.2d 1264 (8th Cir. 1978) (inevitable-disclosure/irreparable-harm discussion where employee went to identical product/employer).
- CPI Card Grp., Inc. v. Dwyer, 294 F. Supp. 3d 791 (D. Minn.) (district court denial of injunction where employee emailed files to personal account but no evidence of use/disclosure).