Miner, Ltd. v. Nerby

Background

Miner provides products, systems, and services for warehousing and materials-management operations, including loading docks, commercial doors, related accessories, repairs, installations, and inspections. The company said it gathered and protected customer and vendor information, including work histories, lists, pricing information, contact information, orders, and order histories.

Nerby began working for Star Equipment in April 2017. Miner later acquired Star Equipment and hired Nerby in October 2019. As a condition of employment, Nerby signed a Non-Competition, Non-Solicitation and Confidentiality Agreement. The agreement required him to keep certain information confidential and, during employment and for two years afterward, barred him from participating in a competing business in Minnesota, North Dakota, South Dakota, Wisconsin, or Iowa. It also barred him from soliciting Miner’s employees or customers for two years after termination.

Miner terminated Nerby in May 2024 as part of a reduction in force. Afterward, Nerby formed WiSP Industrial Service LLC in Wisconsin with a former Miner colleague. Miner alleged that WiSP competed with Miner and that Nerby contacted Miner customers and vendors. Miner identified work or quotes involving 17 current Miner customers for which Nerby had responsibility and about which he allegedly had confidential, proprietary, or trade-secret information. Miner also alleged that Nerby contacted Rytec, a vendor with which Miner said it had an arrangement concerning distribution of Rytec-branded door parts in the Upper Midwest.

Motion and Legal Standard

Miner initially filed its request as a motion for a temporary restraining order. Because the parties had ample notice and because of the relief Miner sought, the court construed the motion as one for a preliminary injunction under Federal Rule of Civil Procedure 65(a).

A preliminary injunction is extraordinary court-ordered relief issued before final judgment. The court considers four factors: the threat of irreparable harm to the requesting party, the balance between that harm and the injury to other parties, the likelihood of success on the merits, and the public interest. The party seeking relief must establish every factor. The court began and ended with irreparable harm because failure to show irreparable harm independently supports denying injunctive relief.

Court’s Analysis

Miner argued that the court should infer irreparable harm from Nerby’s alleged contacts with Miner’s customers and breaches of restrictive covenants. The court explained that a Minnesota procedural doctrine allowing an inference of irreparable harm does not apply in federal court. A federal court may infer irreparable harm from a former employee’s violation of a valid non-compete agreement, but the inference is not required when the evidence does not show harm that is certain, serious, and imminent.

The court found that Miner’s evidence showed, at most, that Nerby had engaged through WiSP in apparently competitive work, contacted several Miner customers, provided unspecified quotes, performed unknown work for 17 Miner customers, made statements to Rytec, unsuccessfully sought business from Rytec in Minnesota, attempted to buy parts from a Rytec dealer in Wisconsin, and obtained work from one customer after an unsatisfactory Miner service experience. The court concluded that this evidence did not establish harm requiring immediate and extraordinary relief.

The court noted that Miner did not provide enough information to evaluate the significance of the customer contacts, such as the number of Miner’s customers, the importance of the affected customers to Miner’s overall business, or the services Nerby performed. The court also found that Miner had not shown that its relationship with Rytec was at risk, and that Nerby’s unsuccessful efforts to obtain some customers’ business weakened Miner’s claim of harm. Although the evidence concerning the Fish Guys arguably showed reduced goodwill, the court could not conclude that Nerby’s conduct alone caused that reduction because Miner’s unsuccessful repair also contributed.

The court also rejected Miner’s argument that the Agreement’s statement that a breach would cause irreparable damage required an injunction. The court held that such a contract provision does not bind a federal court or relieve Miner of its duty to show actual irreparable harm.

Disposition

Judge Jeffrey M. Bryan denied Plaintiff Miner, Ltd.’s motion for a temporary restraining order. The opinion states that Miner had not established that it had suffered or would suffer irreparable injury, so injunctive relief was not necessary at that time. The order did not decide the merits of Miner’s underlying trade-secret, contract, or tort claims.