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Superior Court of Massachusetts, Worcester ing order or preliminary injunction is

County. DENIED.
STEELCRAFT, INC.
v. FN2. At oral hearing, counsel for the
MOBI MEDICAL, LLC, et al.FN1 plaintiff stated that this was the only
prayer for preliminary relief that the
FN1. James Hensel. plaintiff was pursuing.

No. 081934. BACKGROUND

Nov. 13, 2008. Steelcraft manufactures medical products.


Hensel began working for Steelcraft in
MEMORANDUM OF DECISION AND OR- September of 2002. While in Steelcraft's
DER ON THE PLAINTIFF'S MOTION FOR employ, Hensel did not execute a written
A TEMPORARY RESTRAINING ORDER covenant not to compete and the parties dis-
OR PRELIMINARY INJUNCTION pute the existence of an oral covenant not to
compete. Hensel left Steelcraft's employ in
RICHARD T. TUCKER, Justice. early 2007 At that time, Hensel incorporated
On September 3, 2008, Steelcraft, Inc. Mobi, a business that manufactures products
(Steelcraft) filed a three-count complaint similar to those manufactured by Steelcraft.
and request for a temporary restraining order Hensel incurred $100,000 in debt to start
or preliminary injunction against Mobi Mobi.
Medical, LLC (Mobi) and James Hensel
(Hensel). Steelcraft's complaint alleges that: DISCUSSION
(1) Hensel misappropriated trade secrets and
confidential business information; (2) Mobi To prevail on a motion for a preliminary in-
and Hensel engaged in unfair and deceptive junction, “a plaintiff must show (1) a likeli-
acts and practices in violation of G.L.c. 93A, hood of success on the merits; (2) that irre-
§§ 2 and 11; and (3) Mobi and Hensel inten- parable harm will result from denial of the
tionally interfered with Steelcraft's business injunction; and (3) that, in light of the
relations. Steelcraft requests a restraining or- plaintiff's likelihood of success on the mer-
der or preliminary injunction restraining or its, the risk of irreparable harm to the
enjoining Hensel from performing any work plaintiff outweighs the potential harm to the
for any corporation, business employer, or defendant in granting the injunction.” Tri-
any other person relating to the design, man- Nel Mgmt., Inc. v. Board of Health of Barn-
ufacture, or sale of custom products, includ- stable, 433 Mass. 217, 219 (2001), citing
ing: roller carts, rolling stands, intravenous Packaging Indus. Group, Inc. v. Cheney, 380
pole-based systems, and adjustable arms and Mass. 609, 617 (1980).
additional mounts enhancing the utility of
said products and devices that relate to the I. Likelihood of Success on the Merits
information Hensel acquired while working
for Steelcraft.FN2For the following reasons, A. Misappropriation of trade secrets and
Steelcraft's motion for a temporary restrain- confidential business information
pete could conceivably stop Hensel from
Massachusetts courts will not enforce a cov- participating in his trade anywhere in the
enant not to compete unless it is valid and world ever again. Therefore, Steelcraft has
reasonable in light of the circumstances. not shown a likelihood of success on the
Marine Contractors Co., Inc. v. Hurley, 365 merits with regard to its claim alleging mis-
Mass. 280, 287 (1974). A covenant not to appropriation of trade secrets and confiden-
compete is valid only if it: (1) protects an tial information.
employer's legitimate business interest; (2)
is supported by consideration; (3) is reason- B. Violation of G.L.c. 93A, §§ 2 and 11
able in time and space; and (4) is consonant
with the public interest. Novelty Bias Bind- General Laws c. 93A, § 2(a), provides that
ing Co. v. Shevrin, 342 Mass. 714, 716 “[u]nfair methods of competition and unfair
(1961). With regard to the first element, or deceptive acts or practices in the conduct
there are three types of legitimate business of any trade or commerce are hereby de-
interests: (1) trade secrets; (2) confidential clared unlawful.”For conduct to be con-
business information: and (3 good will. sidered unfair or deceptive pursuant to
Marine Contractors Co., Inc., 365 Mass. at G.L.c. 93A, § 2(a), “(1) it must fall within at
287. least the penumbra of some common-law,
statutory, or other established concept of un-
Here, there was no written covenant not to fairness, (2) it must be unethical or unscru-
compete and the parties dispute the exist- pulous, and (3) it must cause substantial in-
ence of an oral covenant not to compete. jury to a consumer or another
However, even if Steelcraft can show that businessman.” Wasserman v. Ag-
there was in fact an oral covenant not to nastopoulos, 22 Mass.App.Ct. 672, 679
compete, that the covenant protected a legit- (1986).
imate business interest, and that it was sup-
ported by adequate consideration, Steelcraft At the outset, Steelcraft has not accused
will nonetheless be unable to prove that the Mobi or Hensel of conduct that falls within
covenant is enforceable under Massachusetts some “common-law, statutory, or other es-
law. First, with regard to time, Steelcraft has tablished concept of unfairness.”See id.-
not alleged that the covenant contains a time Mindful that no written covenant not to
limit. Therefore, the covenant is not for a compete was executed by the parties, it is
reasonable amount of time. Second, with re- unlikely that Steelcraft will be able to show
gard to space, Steelcraft has not alleged that that Mobi and Hensel acted in an unethical
the covenant limits its scope to a particular or unscrupulous manner. Such a showing
geographic area. Therefore, the covenant is would require Steelcraft to prove that Mobi
not reasonable in space. Lastly, the alleged and Hensel engaged in conduct that “attains
covenant is not consonant with the public in- a level of rascality that would raise an eye-
terest because “the public and the individual brow of someone inured to the rough and
have an interest in every person carrying on tumble of the world of commerce.”Id., quot-
his trade or occupation freely,” Woolley's ing Levings v. Forbes & Wallace, Inc., 8
Laundry v. Silva, 304 Mass. 383, 387 Mass.App.Ct. 498, 504 (1979).
(1939), and the alleged covenant not to com-
Here, Steelcraft alleges that Hensel left its C. Intentional Interference with Business
employ with trade secrets and confidential Relations
business information and that he used the in-
formation for the wrongful purpose of ad- In order to make out a prima facie case of
vancing his own business, Mobi, to the det- intentional interference with business rela-
riment of Steelcraft. However, Steelcraft has tions, Steelcraft must prove “(1) the exist-
not established that the information was in ence of a ... business relationship which con-
fact trade secrets or confidential business in- templated economic benefit; (2) the defend-
formation. Notably, Steelcraft has not shown ant's knowledge of the ... business relation-
that it took any precautions to protect the in- ship; (3) the defendant's intentional interfer-
formation. See Jet Spray Cooler, Inc. v. ence with the ... business relationship for an
Crampton, 361 Mass 835, 840 (1972) (hold- improper purpose or by an improper means;
ing that the extent of measures taken to and (4) damages.” Swanset Dev. Corp. v.
guard the secrecy of information is relevant Taunton, 423 Mass. 390, 397 (1996). Here,
to determining whether such information Steelcraft has failed to point to any specific
constitutes a trade secret or confidential economically-beneficial business relation-
business information). If trade secrets and ship that Hensel knew of and intentionally
confidential business information were truly interfered with for an improper purpose or
at stake here, Steelcraft would have to estab- by an improper means that caused Steelcraft
lish that it had taken measures to safeguard to suffer damages. Therefore, Steelcraft has
the information. Of course, Steelcraft could not shown a likelihood of success on the
have easily done so by asking Hensel to ex- merits with regard to its intentional interfer-
ecute a confidentiality agreement or a writ- ence with business relations claim.
ten covenant not to compete.
II. Irreparable Harm
If the information was not in fact trade
secrets or confidential business information, Even if Steelcraft could show a likelihood of
Hensel merely departed with general know- success on the merits, it cannot show that it
ledge. Such use of general information ob- will suffer irreparable harm without a re-
tained from a former employer in sub- straining order or preliminary injunction.
sequent employment situations is not con-
duct that “attains a level of rascality that Steelcraft alleges that, due to Hensel's
would raise an eyebrow of someone inured wrongful use of the information he acquired
to the rough and tumble world of com- while working for Steelcraft, it will lose
merce.” Wasserman, 22 Mass.App.Ct. at business Loss of business can easily be com-
679. Lastly, Steelcraft has failed to show pensated with a monetary award for the
that it has been substantially harmed because amount of business lost. As such, the loss al-
it has failed to point to any specific business leged by Steelcraft is essentially monetary
it lost as a result of Hensel and Mobi's con- loss, which is not enough to establish irre-
duct. Therefore, the plaintiff has not shown a parable harm. Caffyn v. Caffyn, 70 Mass.Ap-
likelihood of success on the merits with re- p.Ct. 37, 42 (2007). However, “monetary
ward to its G.L.c. 93A claim. loss may constitute irreparable harm where
the loss threatens the very existence of the
movant's business.” Hull Mun. Lighting (Mass.Super.)
Plant v. Massachusetts Mun. Wholesale
Elec. Co., 399 Mass. 640, 643 (1987). Here,
Steelcraft does not allege that the monetary
loss it would suffer as a result of Hensel's
wrongful use of information is enough to
threaten the very existence of its business.
Therefore, Steelcraft has failed to show that
it will suffer irreparable harm as a result of
this court denying its motion for a restrain-
ing order or preliminary injunction.

III. Irreparable Harm to Steelcraft vs. Harm


to Hensel in Granting an Injunction

Because Steelcraft has failed to show that it


will suffer irreparable harm, a showing of
even the smallest amount of harm to Hensel
will serve to tip this factor in Hensel's favor.
Here, the facts suggest that Hensel would
suffer significant harm if this court issued
the preliminary injunction as requested by
Steelcraft. Hensel would lose his sole source
of income because he would be unable to
continue his work at Mobi or any other sim-
ilar business. In addition, without that in-
come, Hensel would face severe hardship in
repaying the loan he obtained to start Mobi.
Therefore, the risk of irreparable harm to
Steelcraft clearly does not outweigh the
harm that would befall Hensel if this court
granted Steelcraft's requested restraining or-
der or preliminary injunction.

ORDER

For the foregoing reasons, Steelcraft's mo-


tion for a restraining order or prelimin-
ary injunction is DENIED.

Mass.Super.,2008.
Steelcraft, Inc. v. Mobi Medical, LLC
Not Reported in N.E.2d, 2008 WL 5146879