No Shortcut to an Injunction: Massachusetts SJC Rejects Presumption of Irreparable Harm in Trade Secret Cases

In doing so, the court rejected the argument that a plaintiff who shows a likelihood of success on a trade secret misappropriation claim is entitled to a presumption of irreparable harm. Instead, the SJC held that ordinary equitable principles govern under both the Massachusetts Uniform Trade Secrets Act (MUTSA) and common law, meaning plaintiffs must come forward with specific evidence of harm that money damages will not be able to be remedied. The decision may be part of a broader trend among courts to question the need for injunctive relief in trade secret cases and to place a heightened emphasis on the irreparable harm requirement. 

Background

Daikin Applied Americas Inc. provides and maintains heating, ventilation, and air conditioning (HVAC) systems for institutional clients. For several years, defendant Joseph Russo worked for Daikin as a service supervisor who scheduled technicians and assisted salespersons on pitches, and defendant Andrew Porter worked as a technician. In those roles, both had access to Daikin’s customer data, as well as pricing and margins on Daikin projects. Neither signed a noncompetition or customer non-solicitation agreement.

Daikin alleged that, beginning in 2024, the defendants sent Daikin’s confidential information to their personal email addresses, including work contacts, construction project and bid information showing pricing and costs, photographs of Daikin equipment, internal service bulletins, equipment passwords, and a link to Daikin’s internal website. In December 2024, while still employed by Daikin, the two formed a competing HVAC business, RPAC LLC. They left Daikin in March 2025 to work at RPAC. Daikin alleges that they used its confidential information to compete for its business and customers on behalf of RPAC.

In May 2025, Daikin brought suit in Middlesex Superior Court alleging, among other things, trade secret misappropriation under MUTSA and common law. Daikin moved for a preliminary injunction requiring the defendants to (1) return its confidential information, (2) refrain from using that information, (3) submit their devices to a third-party forensic search, and (4) refrain from soliciting 75 Daikin customers for one year, including withdrawing pending bids. Although the defendants denied that the information (other than one non-public bid document) was confidential or proprietary, they agreed to the first two conditions and to a more tailored forensic search. The preliminary injunction hearing therefore proceeded only as to the request for restrictions on solicitation.

The Massachusetts Superior Court judge denied the requested injunction, finding no irreparable harm because Daikin had not alleged that monetary losses from the loss of customers would threaten the very existence of its business. Daikin sought interlocutory review, and the SJC transferred the case on its own motion.

Analysis and Outcome

To obtain a preliminary injunction in Massachusetts, a movant must show (1) a likelihood of success on the merits, (2) irreparable harm absent the injunction, and (3) that, in light of its likelihood of success, the risk of irreparable harm to the movant outweighs the potential harm to the nonmovant. The SJC reviewed the denial for abuse of discretion and addressed two principal issues.

No evidence of irreparable harm. The court agreed that Daikin had not shown irreparable harm. Economic harm, including interference with existing customer relationships, generally can be remedied by a money judgment, unless it threatens the very existence of the movant’s business. Although Daikin argued that it would lose customer goodwill, it presented no evidence to that effect. The only affidavit Daikin submitted identified the 75 customers with whom the defendants had contact or about whom they had confidential information. The lost HVAC sales and maintenance contracts Daikin cited were, in the court’s view, quantifiable losses, and even if the value of a maintenance contract is unknown in advance, a “robust approximate value” can be derived from economic models based on historical information.

No presumption of irreparable harm. Daikin’s principal argument was that a likelihood of success on a misappropriation claim should give rise to the presumption of irreparable harm, a position it drew from federal district court decisions such as DraftKings Inc. v. Hermalyn. The SJC declined to adopt that rule. As Chief Justice Kimberly S. Budd wrote, “[w]ere we to adopt Daikin’s theory, as long as parties seeking a preliminary injunction on a trade secrets claim could demonstrate a likelihood of success on the merits, no irreparable harm analysis would be required. That approach is inconsistent with both MUTSA and the long-standing common-law equity principles that the act incorporates by reference.”

The court grounded its holding in MUTSA’s text, which provides that misappropriation “may be enjoined upon principles of equity,” and in the character of a preliminary injunction as “an extraordinary remedy never awarded as of right.” It drew on the US Supreme Court’s rejection of categorical presumptions of irreparable harm in patent and copyright cases (eBay Inc. v. MercExchange, LLC and New York Times Co. v. Tasini) and on federal appellate decisions declining to presume irreparable harm in trade secret cases (Life Spine, Inc. v. Aegis Spine, Inc. (7th Cir.) and First Western Capital Management Co. v. Malamed (10th Cir.)). 

The SJC also distinguished the federal district court cases Daikin cited on the grounds that in each instance, the district court found irreparable harm independent of the applications of a presumption.

Because the defendants had already agreed, and been ordered, to return and not use Daikin’s confidential information, the court held that the judge did not abuse his discretion in declining to bar them from soliciting Daikin’s customers absent a showing of irreparable harm.

Why It Matters

The decision makes clear that, in Massachusetts state court, a strong misappropriation case does not by itself unlock injunctive relief. Instead, plaintiffs must build an evidentiary record of non-compensable harm, such as concrete loss of goodwill or a threat to the business itself. The ruling also signals that courts will not use their equitable power to impose, in effect, a non-solicitation covenant for which the employer never bargained or paid. The motion judge expressly noted that Daikin had no such agreements with its former employees.

The ruling may also influence forum selection. Commentators have noted that the federal Defend Trade Secrets Act (DTSA) lacks MUTSA’s “principles of equity” language and that federal courts within the First Circuit have commonly presumed irreparable harm on a showing of likely success. Trade secret plaintiffs with a basis for federal jurisdiction may therefore view federal court as the more favorable venue, although the SJC’s reliance on eBay and on Seventh and Tenth Circuit authority could invite renewed scrutiny of the presumption in federal courts as well. 

Key Takeaways

• Plaintiffs seeking preliminary injunctions under MUTSA should be prepared to prove irreparable harm with specific evidence, including affidavits that explain why losses cannot be measured or remedied by damages, rather than relying on a presumption related to the taking of confidential information.
• Lost sales and service contracts will generally be treated as quantifiable economic harm; a plaintiff should develop evidence of harm to goodwill, customer relationships, or business viability if it intends to seek injunctive relief.
• Employers that wish to restrict former employees from soliciting customers should consider reasonable, properly supported non-solicitation provisions, rather than counting on trade secret claims to supply that protection after the fact.
• Requested relief should be tailored to the harm. Where defendants agree to return and not use confidential information, broader restrictions on competition will require an independent showing of irreparable injury.
• Litigants should weigh forum carefully, as federal courts applying the DTSA may approach irreparable harm differently than Massachusetts state courts after Daikin.