Starkey Laboratories, Inc. v. Saykeo

Background

Starkey Laboratories, Inc. manufactures hearing aids and has its principal place of business in Eden Prairie, Minnesota. It employed Phetsamone Saykeo for more than 25 years, including in an engineering-based manufacturing management role. Starkey said Saykeo had extensive access to trade secrets concerning the manufacture of its products.

Saykeo and Starkey signed a Confidentiality and Noncompete Agreement in 2005. The agreement required Saykeo to protect Starkey’s confidential information during and after employment, return documents containing that information, and refrain for 90 days after leaving Starkey from providing services to a person or entity involved in hearing-aid activities in geographic areas where Starkey actively marketed similar products. The agreement also stated that Starkey could seek an immediate injunction for a violation or threatened violation.

Starkey’s security measures included restricting access to confidential information, monitoring access and data leakage, marking confidential documents, requiring confidentiality agreements, and using cybersecurity controls. Starkey identified Windchill Document 0023811 as a confidential document containing trade-secret information about the manufacture of custom hearing aids.

Events Leading to the Motion

Saykeo resigned in June 2025 and planned to work for Chromatic, which Starkey described as a start-up competitor developing hearing-aid technology. Starkey’s review of Saykeo’s computer activity indicated that he had downloaded Windchill Document 0023811 to an external USB drive and printed it on June 12, 2025. During a June 26 meeting, Saykeo acknowledged that the document contained Starkey trade secrets and admitted downloading it to remember something.

Saykeo signed a form stating that he had returned Starkey’s confidential materials. The USB drive he initially provided did not contain the document. He later brought Starkey a bag of shredded paper and said he had shredded the printed copy, but Starkey’s counsel suspected the shredded material did not include the document. The opinion states that Saykeo had not provided Starkey with the printed copy or the USB drive.

Starkey filed three claims: misappropriation of trade secrets under the federal Defend Trade Secrets Act, violation of the federal Computer Fraud and Abuse Act, and breach of contract under Minnesota law. It moved for a temporary restraining order under Rule 65 of the Federal Rules of Civil Procedure. Saykeo filed no written opposition, appeared at the hearing without a lawyer, and agreed to the temporary order.

Temporary-Restraining-Order Standard

A temporary restraining order is an extraordinary remedy intended to preserve the existing situation until the court can decide the merits. The court applied four factors: Starkey’s likelihood of success, the threat of irreparable harm, the balance between the parties’ harms, and the public interest.

Likelihood of Success

The court found that Starkey had shown a likelihood of success on its trade-secret claim at this early stage. It concluded that Windchill Document 0023811 qualified as a trade secret because it was not generally known, had competitive value, and was protected by Starkey’s security measures and confidentiality markings. The court also found sufficient evidence that Saykeo improperly acquired and retained the document by downloading and printing it without permission, despite knowing it was confidential. The court stated that Saykeo’s ultimate use or disclosure of the document was unknown, but that the evidence was sufficient for the temporary order.

The court also found a likelihood of success on Starkey’s breach-of-contract claim. The agreement appeared to establish a contract, Starkey appeared to have provided the consideration and access contemplated by the agreement, and the current record supported findings that Saykeo breached the confidentiality provision and entered into employment with a hearing-aid competitor less than 90 days after leaving Starkey. The court noted that discovery could affect the contract claim as the case developed.

The court did not decide the likelihood of success on the Computer Fraud and Abuse Act claim because Starkey’s trade-secret claim supplied a sufficient basis for the requested relief.

Other Factors

The court found a threat of irreparable harm because disclosure or use of Starkey’s trade secrets could erode its competitive and reputational advantages and could not necessarily be fully compensated with money damages. It found that the balance of harms favored Starkey even though the order could burden Saykeo’s ability to earn a living in the hearing-aid field, because he had signed the agreement and his conduct led to the motion.

The court also found that the public interest favored protecting confidential business information and enforcing valid agreements. It determined that Minnesota’s 2023 law restricting noncompete agreements did not apply because the agreement was entered in 2005 and the statute was not retroactive. The court further noted that the statute did not apply to nondisclosure agreements or agreements designed to protect trade secrets or confidential information.

Ruling

The court granted Starkey’s Motion for a Temporary Restraining Order. The order requires Saykeo to immediately return all Starkey documents, including confidential and trade-secret materials; prohibits him from communicating or using those materials; and prohibits him from working for any Starkey competitor, including Chromatic, for 90 days from his last day of employment with Starkey.

The order requires Starkey to post a $20,000 bond within seven calendar days. The order addresses temporary relief and does not constitute a final decision on the ultimate merits of Starkey’s claims.