MiTek Inc. v. McIntosh

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

MITEK INC., )

)

Plaintiff, )

)

v. ) No. 4:23-CV-960 RLW

)

MIKE MCINTOSH, )

)

Defendant. )

MEMORANDUM AND ORDER

This matter is before the Court on Plaintiff MiTek Inc.’s Motion for Preliminary Injunction

against Defendant Mike McIntosh. (ECF No. 38). The case arises out of the alleged breach of the

Covenant of Employment (“Covenant”) between MiTek and McIntosh. In its Verified Complaint,

MiTek asserts claims for breach of contract, tortious interference with business expectancy,

violations of the Defend Trade Secrets Act, 18 U.S.C. § 1831, et seq. (“DTSA”), and violations of

the Missouri Uniform Trade Secrets Act, Mo. Rev. Stat. § 417.450, et seq. (“MUTSA”). MiTek

moves for the entry of a preliminary injunction against McIntosh on all claims. For the reasons

below, the Court will deny MiTek’s Motion for Preliminary Injunction.

I. Procedural Background

MiTek filed this action on August 1, 2023, and immediately moved for a temporary

restraining order (“TRO”). (ECF Nos. 1, 6). Despite several attempts at service, MiTek was unable

to personally serve McIntosh with the Summons, Verified Complaint, Motion for TRO, and Notice

of Hearing. (ECF No. 11). MiTek then requested an ex parte hearing on its Motion for TRO. (ECF

No. 12). The Court heard oral argument on August 11, 2023, and issued a TRO against McIntosh

on August 14, 2023. (ECF Nos. 15, 20). McIntosh filed a motion for rehearing and a motion for

contempt. (ECF Nos. 19, 21). The Court denied the former and the latter remains pending. (ECF

No. 20).

McIntosh moved to dissolve the TRO on August 18, 2023. (ECF No. 24). At the hearing

on August 28, 2023, both parties presented argument and evidence concerning the dissolution of

the TRO. After careful consideration, the Court denied McIntosh’s Motion to Dissolve and

extended the TRO to September 11, 2023. (ECF No. 43).

The Court held a hearing on MiTek’s Motion for Preliminary Injunction on September 8,

2023, at which time MiTek and McIntosh were allowed to present evidence and argument. MiTek

presented two witnesses and McIntosh presented none. Both parties have submitted proposed

findings of fact and conclusions of law for the Court’s consideration. (ECF Nos. 58, 61).

After careful review, the Court makes the following findings of fact and conclusions of law

pursuant to Rule 52(a)(1) of the Federal Rules of Civil Procedure.

II. Findings of Fact

1. MiTek provides integrated software, services, engineered products, and automated

solutions for the building industry. MiTek’s business includes the licensing of truss design

software used by its customers to design and fabricate roof trusses, floor trusses, and wall panels

using MiTek’s metal products. MiTek also manufactures and/or sells automation machinery that

its customers use to fabricate trusses and wall panels.

2. McIntosh worked for MiTek as a District Sales Manager or Regional Sales

Manager, servicing the Southeast region of the United States, including North Carolina, South

Carolina, Georgia, Virginia, and West Virginia.

3. Around June 2020, MiTek underwent an internal corporate restructuring. As part

of the restructuring, MiTek presented McIntosh with an offer letter for the position of Regional

Sales Manager. The position came with a pay increase.

4. As a condition of the salary increase and continued employment, McIntosh was

required to enter into the Covenant by Employee (“Covenant”), which contains non-competition,

non-solicitation, and non-disclosure provisions.

5. McIntosh signed the offer letter on July 6, 2020.

6. McIntosh signed and returned the Covenant by email on July 9, 2022. No

representative of MiTek signed the Covenant. No company is listed on the Covenant.

7. On April 4, 2023, Laura Sarratt, MiTek’s Senior Director of Human Resources, met

with McIntosh’s managers, Todd Snyder (Regional Sales Manager) and Phil Harms (Area Vice

President), to discuss concerns they had with McIntosh’s job performance.

8. On April 19, 2023, Snyder and Sarratt met with McIntosh to discuss his future.

They gave McIntosh two options: (1) He could accept a performance improvement plan (“PIP”);

or (2) He could resign.

9. During the April 19, 2023, McIntosh told Sarratt and Snyder that he wanted to

resign his employment with MiTek. The parties agreed that May 1, 2023, would be McIntosh’s

final day of employment with MiTek. The parties did not discuss termination.

10. MiTek offered McIntosh a separation agreement.

11. McIntosh’s resignation was not contingent upon the terms of the separation

agreement.

12. On April 20, 2023, McIntosh sent a text message to Snyder stating that Snyder

could tell others that McIntosh was resigning his position.

13. Prior to May 1, 2023, McIntosh told other MiTek employees that he was resigning

his position with the company.

14. On April 28, 2023, McIntosh sent an email to Sarratt stating that the terms of the

separation agreement were unacceptable and that he intended to continue working for MiTek.

15. McIntosh’s last day of employment with MiTek was May 1, 2023.

16. After May 1, 2023, McIntosh accepted new employment as a Regional Eastern

Manager at Eagle Metal Products.

17. McIntosh has knowledge of MiTek’s trade secret and confidential information

including its business plans and strategies, customer lists, customer pricing and purchase volume,

expansion plans, products, software, marketing planes, business strategies, research, budgets,

forecasts, sales and profits, and other proprietary information relating to MiTek’s business.

18. Since May 1, 2023, McIntosh has been in contact with individuals who work for

MiTek’s customers.

III. Conclusions of Law

A. Legal Standard

In determining whether to issue preliminary injunctive relief, this Court considers the

following factors: (1) the probability that the movant will succeed on the merits; (2) the threat of

irreparable harm to the movant; (3) the balance between this harm and the injury that granting the

injunction will inflict on the nonmovant; and (4) the public interest. Home Instead, Inc. v.

Florance, 721 F.3d 494, 497 (8th Cir. 2013) (citing Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d

109, 113 (8th Cir. 1981) (en banc)). The inquiry is “whether the balance of equities so favors the

movant that justice requires the court to intervene to preserve the status quo until the merits are

determined.” Dataphase Sys., 640 F.2d at 113.

The likelihood of success is the most important factor. Roudachevski v. All-Am. Care

Centers, Inc., 648 F.3d 701, 706 (8th Cir. 2011). This factor directs courts to ask whether the party

requesting a preliminary injunction has a “fair chance of prevailing.” Planned Parenthood Minn.,

N. Dak., S. Dak. v. Rounds, 530 F.3d 724, 732 (8th Cir. 2008) (en banc). Even when a plaintiff has

a strong claim on the merits, however, “[f]ailure to demonstrate irreparable harm is a sufficient

ground to deny a preliminary injunction.” Phyllis Schlafly Revocable Tr. v. Cori, 924 F.3d 1004,

1009 (8th Cir. 2019) (quoted case omitted). “Irreparable harm occurs when a party has no adequate

remedy at law, typically because its injuries cannot be fully compensated through an award of

damages.” Gen. Motors Corp. v. Harry Brown’s, LLC, 563 F.3d 312, 319 (8th Cir. 2009). The

moving party bears the burden to establish the need for injunctive relief. Chlorine Inst., Inc. v. Soo

Line R.R., 792 F.3d 903, 914 (8th Cir. 2015).

B. Discussion

1. Likelihood of Success on the Merits

To demonstrate a likelihood of success on the merits, a movant need not show that it will

ultimately succeed on its claims; rather, it must show that its prospect for success is sufficiently

likely to support the kind of relief it requests. Noodles Dev., LP v. Ninth St. Partners, LLP, 507 F.

Supp. 2d 1030, 1034 (E.D. Mo. 2007) (citing Sanborn Mfg. Co. v. Campbell Hausfeld/Scott Fetzer

Co., 997 F.2d 484, 488 (8th Cir. 1993)). That is, a movant need only show that it has a “fair chance

of prevailing.” Planned Parenthood Minn., 530 F.3d at 732–33.

a. Breach of Contract

The parties do not dispute that Missouri law applies to MiTek’s claim for breach of

contract. The parties do dispute, however, whether the Covenant constitutes a valid and

enforceable contract.

The essential elements of a contract under Missouri law are offer, acceptance, and

consideration. Baker v. Bristol Care, Inc., 450 S.W.3d 770, 774 (Mo. banc 2014) (citation

omitted). “Offer and acceptance ‘require there to be a mutual agreement, i.e., a meeting of the

minds between the contracting parties, which means the parties meet upon and assent to the same

thing, in the same sense, and at the same time.’” SL EC, LLC v. Ashley Energy, LLC, 561 F. Supp.

3d 802, 815 (E.D. Mo. 2021) (quoting EM Med., LLC v. Stimwave LLC, 626 S.W.3d 899, 907

(Mo. Ct. App. 2021)). In assessing whether there was a meeting of the minds, the Court must

consider the parties’ “objective manifestations of intent.” Id. (quoting Best Buy Builders, Inc. v.

Siegel, 409 S.W.3d 562, 565 (Mo. Ct. App. 2013)).

The elements of a breach-of-contract claim in Missouri are: (1) the existence and terms of

a contract; (2) that the plaintiff performed or tendered performance pursuant to the contract; (3)

breach of the contract by the defendant; and (4) damages suffered by the plaintiff. Goldsmith v.

Lee Enterprises, Inc., 57 F.4th 608, 612 (8th Cir. 2023).

Missouri courts generally enforce non-competition agreements that are “demonstratively

reasonable.” Whelan Sec. Co. v. Kennebrew, 379 S.W.3d 835, 841 (Mo. 2012) (en banc). “A non-

compete agreement is reasonable if it is no more restrictive than is necessary to protect the

legitimate interests of the employer.” Id. at 842 (quoted case omitted). The agreement must be

narrowly tailored in terms of time and geography, and must protect legitimate employer interests

“beyond mere competition by a former employee.” Id. at 841-42. Under Missouri law, “a

noncompete agreement is enforceable ‘only to the extent that the restrictions protect the

employer’s trade secrets or customer contacts.’” Id. at 842 (quoting Healthcare Servs. of the

Ozarks, Inc. v. Copeland, 198 S.W.3d 604, 610 (Mo. 2006) (en banc)). “The employer has the

burden to prove that the non-compete agreement protects its legitimate interests in trade secrets or

customer contacts and that the agreement is reasonable as to time and geographic space.” Id.

McIntosh asserts that the Covenant is not valid because it does not identify MiTek as a

party and does not contain MiTek’s signature. MiTek counters that it assented to the agreement

through its conduct.

“[S]ignatures remain a common, though not exclusive, method of demonstrating

agreement.” Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15, 23 (Mo. Ct. App. 2008). A signature

is not required to show mutuality or assent to a written agreement. Heritage Roofing, LLC v.

Fischer, 164 S.W.3d 128, 134 (Mo. Ct. App. 2005) (citing Thomas v. O'Brien, 791 S.W.2d 4, 6

(Mo. Ct. App. 1990)). A party may assent to a contract by its conduct. Id. Whether an unsigned

writing constitutes a binding contract depends upon the intention of the parties, which is a question

of fact that is seldom capable of direct proof. Id.

The Court is not persuaded at this juncture that the Covenant constitutes a binding contract.

MiTek failed to sign the agreement even though the document contains a signature line for

“Company.” Immediately above the signature line, the document states: “Accepted and agreed to

on behalf of Company.” The Covenant further states: “One or more facsimile or e-mail copies of

this Agreement collectively bearing the copied signatures of both parties shall be treated as an

original copy of this Agreement for all purposes.” (Emphasis added). The agreement also explains

that “[n]o modification, amendment, or waiver of any of the provisions of this Agreement shall be

effective or binding unless set forth in a writing signed by the parties hereto and specifically

referring to this Agreement.”

A trier of fact could reasonably conclude that the language in the Covenant reflects

MiTek’s intent that its signature is required for mutual assent. See Baier v. Darden Restaurants,

420 S.W.3d 733, 736 (Mo. Ct. App. 2014) (“The conclusion that a bilateral contract has been

formed is not self-evident when an offeree signs an unsigned proposal. Rather, the absence of the

offeror's signature on the proposal presents a question of fact, requiring the trial court to determine

the offeror's intent, i.e., whether an ‘offer’ to enter into a bilateral contract was made, and thus

whether the offeror intends to be bound if the unsigned proposal is accepted by the offeree.”)

(emphasis original) (citation omitted).

To be clear, the Court does not foreclose the possibility that MiTek could establish

mutuality with additional evidence. Rather, at this stage—in light of the uncertainty surrounding

the enforceability of the Covenant—MiTek has not shown a sufficient prospect for success to

warrant the relief sought. See Noodles Dev., 507 F. Supp. 2d at 1034. For that reason, the

“likelihood of success” factor weighs in McIntosh’s favor on the breach-of-contract claim.

b. Tortious Interference

The elements of tortious interference with a business relationship are: (1) The plaintiff was

involved in a valid business relationship; (2) the defendant was aware of the relationship; (3) the

defendant intentionally interfered with the relationship, inducing its termination; (4) the defendant

acted without justification; and (5) the plaintiff suffered damages as a direct result of defendant's

conduct. Topper v. Midwest Div., Inc., 306 S.W.3d 117, 125 (Mo. Ct. App. 2010).

There is no evidence that McIntosh induced the termination of any of MiTek’s business

relationships. MiTek cannot show a sufficient prospect for success on this claim to warrant the

relief sought. See Noodles Dev., 507 F. Supp. 2d at 1034. This factor weighs in McIntosh’s favor.

c. The Defend Trade Secrets Act and the Missouri Uniform Trade

Secrets Act

To state a claim for misappropriation of a trade secret under the DTSA, a plaintiff must

show that “the trade secret is related to a product or service used in, or intended for use in, interstate

or foreign commerce.” 18 U.S.C. § 1836(b)(1). The DTSA defines a trade secret as:

all forms and types of financial, business, scientific, technical,

economic, or engineering information, including patterns, plans,

compilations, program devices, formulas, designs, prototypes,

methods, techniques, processes, procedures, programs, or codes,

whether tangible or intangible, and whether or how stored,

compiled, or memorialized physically, electronically, graphically,

photographically, or in writing if—(A) the owner thereof has taken

reasonable measures to keep such information secret; and (B) the

information derives independent economic value, actual or

potential, from not being generally known to, and not being readily

ascertainable through proper means by, another person who can

obtain economic value from the disclosure or use of the

information[.]

18 U.S.C. § 1839(3).

A misappropriation may occur in any of three ways: (1) a person acquires the trade secret

while knowing or having reason to know that he or she is doing so by improper means; (2) a person

who has acquired or derived knowledge of the trade secret discloses it without the owner's consent;

or (3) when a person who has acquired or derived knowledge of the trade secret uses it without the

owner's consent. 18 U.S.C. § 1839(5); see also LifeScience Techs., LLC v. Mercy Health, 632 F.

Supp. 3d 949, 956 (E.D. Mo. 2022).

A claim for misappropriation of trade secrets under the MUTSA has three elements: (1) the

existence of protectable trade secrets, (2) misappropriation of the trade secrets by the defendant,

and (3) damages or entitlement to injunctive relief. Secure Energy, Inc. v. Coal Synthetics, LLC,

708 F. Supp. 2d 923, 926 (E.D. Mo. 2010); Cent. Tr. & Inv. Co. v. Signalpoint Asset Mgmt., LLC,

422 S.W.3d 312, 320 (Mo. 2014) (en banc). Missouri law defines a trade secret as:

information, including but not limited to, technical or nontechnical

data, a formula, pattern, compilation, program, device, method,

technique, or process, that: (a) Derives independent economic value,

actual or potential, from not being generally known to, and not being

readily ascertainable by proper means by other persons who can

obtain economic value from its disclosure or use; and (b) Is the

subject of efforts that are reasonable under the circumstances to

maintain its secrecy.

Mo. Rev. Stat. § 417.453(4).

Misappropriation is defined as:

(a) Acquisition of a trade secret of a person by another person who

knows or has reason to know that the trade secret was acquired

by improper means; or

(b) Disclosure or use of a trade secret of a person without express or

implied consent by another person who:

a. Used improper means to acquire knowledge of the trade

secret; or

b. Before a material change of position, knew or had reason to

know that it was a trade secret and that knowledge of it had

been acquired by accident or mistake; or

c. At the time of disclosure or use, knew or had reason to know

that knowledge of the trade secret was:

i. Derived from or through a person who had utilized

improper means to acquire it;

ii. Acquired under circumstances giving rise to a duty

to maintain its secrecy or limit its use; or

iii. Derived from or through a person who owed a duty

to the person seeking relief to maintain its secrecy or

limit its use.

Mo. Rev. Stat. § 417.453(2). See also Secure Energy, Inc., 708 F. Supp. 2d at 926.

McIntosh has knowledge of MiTek’s trade secret and confidential information. But under

both the DTSA and MUTSA, MiTek must show that McIntosh misappropriated that information.

At this point in the litigation, MiTek has made no such showing.1 MiTek simply asserts upon

1 MiTek has suggested throughout this litigation that McIntosh sent confidential information to his

personal email address before leaving MiTek. In fact, MiTek indicated on its “Exhibit List for

Preliminary Injunction Hearing” that it may introduce the email as Exhibit 5 at the hearing. (ECF

No. 50). MiTek did not, however, publish Exhibit 5 during the hearing or move for its admission.

information and belief that “McIntosh intends to or will inevitably utilize MiTek’s confidential

information and/or trade secrets in performing his work for Eagle Metal Products[.]” (ECF No. 1

at ¶ 4). Courts refer to MiTek’s future-misappropriation theory as the “inevitable-disclosure

doctrine” and repeatedly emphasize that it poses a high bar. Prime Therapeutics LLC v. Beatty,

354 F. Supp. 3d 957, 969 (D. Minn. 2018) (citations omitted). Courts that have applied the doctrine

consider several factors in determining whether misappropriation is inevitable, including: (1) the

degree of competition between the plaintiff and a defendant’s new employer, (2) the extent to

which the defendant’s new position is similar to the position he held with the plaintiff, and (3) the

actions the plaintiff has taken to prevent the defendant from using or disclosing the plaintiff’s trade

secrets. Id. (citations omitted).

Missouri courts have neither accepted nor rejected the inevitable-disclosure doctrine. See

Randall E. Kahnke, et al., Doctrine of Inevitable Disclosure, https://ipo.org/wp-

content/uploads/2013/04/DoctrineofInevitableDisclosure.pdf (Sept. 2008); see also Bus. Mach.

Corp. v. Seagate Tech., Inc., 941 F. Supp. 98, 101 n.1 (D. Minn. 1992) (“The Eighth Circuit has

neither accepted nor rejected the ‘inevitable disclosure’ doctrine.”). In the absence of controlling

authority, the Court will decline to apply the doctrine in this case. See Conseco Fin. Servicing

Corp. v. N. Am. Mortg., No. 00CV1776, 2000 WL 33739340, at *12 (E.D. Mo. Dec. 6, 2000), aff'd

sub nom. Conseco Fin. Servicing Corp. v. N. Am. Mortg. Co., 24 F. App'x 655 (8th Cir. 2002)

(declining to apply the inevitable-disclosure doctrine absent controlling authority from the Eighth

Circuit).

Even if the doctrine were settled law in this jurisdiction, MiTek has not met the heavy

burden of showing inevitable disclosure. At the preliminary-injunction hearing, Snyder testified

that Eagle Metal offers some but not all of the same products and services as MiTek. And while

McIntosh’s new job at Eagle Metal is substantially similar to his position with MiTek, there is no

evidence in the record to suggest that McIntosh will use MiTek’s proprietary information to poach

MiTek’s customers. McIntosh states in his declaration that he has not “used or disclosed any

MiTek confidential information or trade secrets.” (ECF No. 32-3). Baird Quisenberry, President

of Eagle Metal, states in his declaration that “Mr. McIntosh has been instructed and has agreed not

to share any confidential information or trade secrets he learned from MiTek with anyone at

Eagle.” (ECF No. 32-7).

McIntosh’s evidence certainly does not preclude the possibility that MiTek could succeed

on these claims in the future, but “[s]peculative harm does not support a preliminary injunction.”

MPAY Inc. v. Erie Custom Computer Applications, Inc., 970 F.3d 1010, 1020 (8th Cir. 2020)

(quoted case and internal quotation marks omitted). MiTek has not shown a sufficient prospect for

success to warrant the relief sought. See Noodles Dev., 507 F. Supp. 2d at 1034. Here again, this

factor weighs in McIntosh’s favor.

2. Irreparable Harm

“Failure to show irreparable harm is an independently sufficient ground upon which to

deny a preliminary injunction.” Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003) (citation

omitted). MiTek must show that the harm is “certain and great and of such imminence that there

is a clear and present need for equitable relief.” Gen. Motors Corp., 563 F.3d at 319 (citing Iowa

Utils. Bd. v. Fed. Commc'ns Comm'n, 109 F.3d 418, 425 (8th Cir. 1996)). Speculative harm does

not support a preliminary injunction. MPAY Inc., 970 F.3d at 1020.

As explained above, there is no evidence in the record that MiTek has suffered irreparable

harm or that such harm is certain and imminent. At this stage, all of MiTek’s claims are based on

speculative future harm. Thus, even if MiTek could establish a sufficient prospect for success on

any of its claims, a preliminary injunction would be inappropriate. This factor weighs in

McIntosh’s favor.

3. The Balance of Harms

“The balance of harms analysis examines the harm of granting or denying the injunction

upon both of the parties to the dispute and upon other interested parties, including the public.”

Noodles Dev., 507 F. Supp. 2d at 1038 (cleaned up). An illusory harm to the movant will not

outweigh any actual harm to the non-movant. Id. (citing Frank B. Hall & Co. v. Alexander &

Alexander, Inc., 974 F.2d 1020, 1025 (8th Cir.1992)).

The Court previously determined that this factor weighed in MiTek’s favor. (ECF No. 20

at 10). But in light of MiTek’s lack of evidence and its reliance on seemingly illusory harm, the

Court now finds that this factor weighs in neither party’s favor. While the Covenant remains

narrow in temporal and geographic scope, there are substantial questions surrounding its

enforceability. What is more, the narrowness of the Covenant, even if valid, does not negate the

speculative nature of the harm to MiTek. This factor does not tip the scales in either party’s favor.

4. Public Interest

Finally, the evidence before the Court fails to establish that a preliminary injunction is

necessary to protect the public interest. This Court previously ruled in MiTek’s favor on this factor

because the enforcement of reasonable restrictive covenants serves the public interest. (ECF No.

20 at 11) (citing Schott v. Beussink, 950 S.W.2d 621, 625 (Mo. Ct. App. 1997)). But as explained

throughout this order, the enforceability of the Covenant is now questionable. And while the public

also has an interest in protecting trade secrets (see Conseco Fin. Servicing Corp. v. N. Am. Mortg.,

2000 WL 33739340, at *12), there is simply no evidence in the record to show that McIntosh has

disseminated or will disseminate MiTek’s confidential information. This factor weighs in neither

party’s favor.

IV. Conclusion

Having thoroughly reviewed the record in this case, including pleadings, exhibits,

deposition testimony, and evidence presented at the preliminary injunction hearing, the Court

concludes that the balance of equities does not favor the entry of a preliminary injunction. The

Court has carefully considered the four Dataphase factors and finds MiTek has not established

that it is likely to prevail on any of its claims or that there is a significant threat of irreparable harm

to MiTek absent an injunction. Dataphase Sys., 640 F.2d at 113.

Accordingly,

IT IS HEREBY ORDERED that Plaintiff MiTek Inc.’s Motion for Preliminary Injunction

against Defendant Mike McIntosh is DENIED. (ECF No. 38).

RONNIE L. WHITE

UNITED STATES DISTRICT JUDGE

Dated this 11th day of September, 2023.

14