A unanimous opinion from the U.S. Court of Appeals for the Fifth Circuit has clarified the standard for establishing irreparable harm in noncompete and trade secret disputes.

The opinion vacated and remanded a lower court decision that had denied a preliminary injunction sought by Botkin Chiarello Calaf client Direct Biologics. The Austin-based company filed the lawsuit and preliminary injunction request after an executive downloaded sensitive trade secrets and confidential company information before taking a senior-level position with direct competitor Vivex Biologics.

The Botkin Chiarello Calaf team included Ryan Botkin, who argued the case at the Fifth Circuit, along with María Amelia Calaf (MAC), Leah Bhimani Buratti, and Asra J. Syed.

Citing the Fifth Circuit’s 2015 opinion in Cardoni v. Prosperity Bank, the Fifth Circuit panel found the district court had given “short shrift” to potential damages that could result if McQueen discloses Direct Biologics’ trade secrets. As Law360 noted, (subscription required), the panel explained that while the district court did not abuse the court's discretion in declining to apply the presumption of irreparable harm based on McQueen's breach of his noncompete agreement, the court was required to go further in its analysis and make findings concerning McQueen’s disclosures and determine if monetary damages would be "easy or difficult to quantify."

The case is Direct Biologics LLC v. Adam McQueen et al., case number 22-50442, in the U.S. Court of Appeals for the Fifth Circuit.