Core and Main, LP v. McCabe

Background

Core and Main, LP sought a temporary restraining order and preliminary injunction against Ron McCabe and Dakota Supply Group, Inc. McCabe had worked for Core and Main from approximately October 6, 2017, until his resignation on June 1, 2021. He began working for Dakota Supply Group as an operations manager on June 7, 2021.

McCabe’s 2017 employment agreement included noncompetition and nonsolicitation provisions. For 12 months after his employment ended, the agreement restricted him from working for a competing business within 150 miles of offices from which he had provided services for Core and Main. It also restricted him from soliciting certain Core and Main customers and suppliers.

After resigning, McCabe deleted data from the work cellphone provided by Core and Main and sent a group text to some Core and Main customers stating that he no longer worked there and providing a new phone number. He also attended and led a session at a Minnesota conference about installing and maintaining American Flow Control Waterous fire hydrants, despite Core and Main’s request that he not attend. Core and Main sought to stop McCabe from competing, soliciting customers, attending conferences, and providing training involving those fire hydrants. It also sought to enjoin Dakota Supply Group for allegedly interfering with the employment agreement.

Legal standard

The court applied the four factors used for preliminary injunctions: the likelihood of irreparable harm, the likelihood of success on the merits, the balance between the parties’ harms, and the public interest. A preliminary injunction is an extraordinary remedy, and the requesting party must show that each factor supports relief. The court treated the standards for a temporary restraining order and a preliminary injunction as the same.

Irreparable harm

The court addressed irreparable harm first because it was dispositive. Irreparable harm is harm for which there is no adequate remedy through money damages. The court concluded that Core and Main had not made the required showing.

Regarding a customer’s switch from American Flow Control Waterous fire hydrants to Mueller fire hydrants, the court found that the alleged harm was past rather than imminent. The record also showed that McCabe had a minimal role, if any, in that decision, and Core and Main had not alleged or shown that the customer planned to buy Mueller hydrants from Dakota Supply Group.

Regarding the conference training, the court found it speculative to conclude that McCabe solicited Core and Main customers by teaching about a type of hydrant that Dakota Supply Group did not sell. Core and Main did not allege that it had actually lost customers or provide evidence that McCabe had solicited them.

The court also rejected Core and Main’s arguments that irreparable harm should be inferred from the alleged breach of the restrictive covenants or from general concerns about customer goodwill. Core and Main had not identified a specific customer whose goodwill it lost or over whom McCabe had acquired personal influence. The court further reasoned that lost-customer profits generally can be addressed through money damages and that Core and Main had not shown harm threatening the existence of its business.

The court reached the same conclusion regarding the claim that Dakota Supply Group tortiously interfered with the employment agreement. Any resulting harm, on the record presented, had not been shown to be beyond compensation through money damages.

Disposition

The court held that Core and Main failed to establish irreparable harm as to either defendant. Because that failure alone was sufficient to deny preliminary injunctive relief, the court declined to address the remaining factors. The court denied Core and Main’s motion for a temporary restraining order and preliminary injunction and ordered judgment entered accordingly.

Judge

The order was signed by Wilhelmina M. Wright, United States District Judge.