Pre-Paid Legal Services, Inc. v. Cahill
2013 U.S. Dist. LEXIS 18562
| E.D. Okla. | 2013Background
- PPLSI (LegalShield) sued Cahill in federal court for breach of contract, misappropriation of trade secrets, and tortious interference; TRO issued and case removed to federal court in 2012.
- Cahill held Regional Manager and later Regional Vice President roles with enhanced back-office access to associate data.
- RMA and Associate Agreement contain trade-secret designations and a non-solicitation clause; both contracts require arbitration.
- Cahill announced departure in the August 10, 2012 ELP meeting and privately met with Cabradilla to discuss Nerium, including a guaranteed salary offer.
- Cahill posted Nerium-related information on private and public Facebook pages after resigning; PPLSI sought relief to prevent solicitation and protect trade secrets; court recommended partial injunction and arbitration stay.
- Magistrate recommended granting a preliminary injunction only as to Cabradilla’s breach of the non-solicitation clause, denying relief for trade-secret misappropriation and Facebook-post-related issues; recommended staying to arbitration and denying moot other TRO motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Likelihood of success on misappropriation of trade secrets | PPLSI asserts trade-secret status and misappropriation since Cahill used downline data. | Cahill contends no trade secrets were in possession and no misappropriation proven. | Not proven; misappropriation unlikely; harm not irreparable. |
| Enforceability of non-solicitation as restraint of trade | Non-solicitation clause protects contract and prevents harm. | Clause constitutes an unlawful restraint of trade. | Not a restraint of trade under Oklahoma law; enforceable. |
| Breach of non-solicitation by Cabradilla interaction | Cahill privately solicited Cabradilla to Nerium before the ELP meeting. | No viable solicitation beyond the private meeting evidence. | Likely to succeed on breach as to Cabradilla; injunction granted. |
| Facebook posts constitute solicitations | Public posts could solicit PPLSI associates. | Posts did not constitute solicitations under the contract. | Facebook posts not shown to be solicitations; no irreparable harm shown. |
Key Cases Cited
- GTE Corp. v. Williams, 731 F.2d 676 (10th Cir. 1984) (preliminary injunction standards and irreparable harm considerations)
- Tri-State Generation and Transmission Association, Inc. v. Shoshone River Power, Inc., 805 F.2d 351 (10th Cir. 1986) (four-factor test for preliminary injunctions)
- Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234 (10th Cir. 2001) (four-factor injunction test applicability)
- Schrier v. University of Colorado, 427 F.3d 1253 (10th Cir. 2005) (injunction purpose to prevent irreparable harm)
- Heideman v. South Salt Lake City, 348 F.3d 1182 (10th Cir. 2003) (irreparable harm and likelihood of success considerations)
- Greater Yellowstone Coalition v. Flowers, 321 F.3d 1250 (10th Cir. 2003) (irreparable harm standards in IP/contract contexts)
- Enhanced Network Solutions Group, Inc. v. Hypersonic Technologies Corp., 951 N.E.2d 265 (Ind. Ct. App. 2011) (social-media solicitation distinctions under non-solicitation)