KLN Logistics Corp. v. Norton

884 N.E.2d 631, 174 Ohio App. 3d 712
CourtOhio Court of Appeals
DecidedJanuary 24, 2008
DocketNo. 89628
StatusPublished
Cited by5 cases

This text of 884 N.E.2d 631 (KLN Logistics Corp. v. Norton) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
KLN Logistics Corp. v. Norton, 884 N.E.2d 631, 174 Ohio App. 3d 712 (Ohio Ct. App. 2008).

Opinion

Melody J. Stewart, Judge.

{¶ 1} This case came to be heard upon the accelerated calendar pursuant to App.R. 11.1 and Loc.R. 11.1, the record from the lower court, the briefs, and the oral arguments of counsel.

{¶ 2} Defendant-appellant, Jeffrey Norton, appeals the trial court’s judgment granting plaintiff-appellee, KLN Logistics Corp. (“KLN”), a preliminary injunction against him and finding him in civil contempt of court for violating the terms of a previously issued temporary restraining order. For the reasons stated below, we affirm the judgment of the trial court.

{¶ 3} In November 2005, Kimberly Giering, owner and president of KLN, a freight-forwarding company, hired appellant as an operations agent. As part of the terms of employment, appellant signed a “Nondisclosure and Noncircumvention Agreement,” in which he agreed not to “in any way whatsoever circumvent” KLN or disclose or use for personal gain certain proprietary information without prior written permission from the company.

{¶ 4} The agreement defined “proprietary information” as “information relating to financial institutions and sources, trade secrets, methodologies, personal and business contacts, or business plans” of the company. The agreement stated that the company was disclosing “proprietary information” to the employee with the understanding that a “fiduciary relationship has been established” among them. The agreement was to remain in effect for three years following appellant’s termination of employment.

{¶ 5} Through his employment with KLN, appellant was introduced to Brian Harward. Harward is an internet electronics trader and owner of Hartón Innovations, d.b.a. Electronics Nation, and was a new account with KLN. Appellant worked with Harward, servicing the Electronics Nation account for KLN. In October 2006, appellant informed KLN that he was leaving its employ and going to work for Harward. Just prior to appellant’s going to work for Harward, Electronics Nation ceased using KLN’s services.

{¶ 6} On October 18, 2006, KLN filed a complaint and a motion for a temporary restraining order (“TRO”) and a preliminary injunction against appellant. KLN sought to enforce the terms of the nondisclosure/noncircumvention agreement.

{¶ 7} On October 20, 2006, after a hearing, the trial court granted the TRO and set the matter of the preliminary injunction for hearing on November 9, 2006. After granting appellant a continuance, the court conducted a hearing on the preliminary injunction on December 28, 2006. The court heard testimony from Giering, Harward, and appellant.

[716]*716{¶ 8} Following the hearing, the court invited both sides to submit a proposed entry and supporting case law for consideration. On February 28, 2007, the trial court granted the preliminary injunction against appellant and found appellant in contempt for violating the TRO by continuing his business relationship with Harward to KLN’s detriment.

{¶ 9} Appellant presents two assignments of error for our review. The first assignment asserts that the trial court abused its discretion by granting the preliminary injunction in KLN’s favor. The second assignment asserts that the trial court abused its discretion in holding appellant in contempt for accepting and maintaining employment with one of KLN’s former customers.

{¶ 10} Injunctions are an extraordinary remedy, equitable in nature, and their issuance may not be demanded as a matter of right. Perkins v. Quaker City (1956), 165 Ohio St. 120, 59 O.O. 151, 133 N.E.2d 595, syllabus. “The issue whether to grant or deny an injunction is a matter solely within the discretion of the trial court and a reviewing court will not disturb the judgment of the trial court in the absence of a clear abuse of discretion.” Danis Clarkco Landfill Co. v. Clark Cty. Solid Waste Mgt. Dist. (1995), 73 Ohio St.3d 590, 653 N.E.2d 646, paragraph three of the syllabus. The term “abuse of discretion” connotes more than an error of law or judgment; it implies an unreasonable, arbitrary, or unconscionable attitude on the part of the trial court. When applying the abuse-of-discretion standard, a reviewing court is not free merely to substitute its judgment for that of the trial court. Sinoff v. Ohio Permanente Med. Group (2002), 146 Ohio App.3d 732, 740, 767 N.E.2d 1251.

{¶ 11} “[A] preliminary injunction is an extraordinary remedy; therefore, the moving party has a substantial burden to meet in order to be entitled to the injunction.” Id., citing Ormond v. Solon (Oct. 18, 2001), Cuyahoga App. No. 79223, 2001 WL 1243959. “The moving party must establish a right to the preliminary injunction by showing clear and convincing evidence of each element of the claim.” Id., citing Vanguard Transp. Sys., Inc. v. Edwards Transfer & Storage Co., Gen. Commodities Div. (1996), 109 Ohio App.3d 786, 673 N.E.2d 182.

{¶ 12} In deciding whether to grant a preliminary injunction, a court must look at four factors: (1) whether there is a substantial likelihood that plaintiff will prevail on the merits, (2) whether plaintiff will suffer irreparable injury if the injunction is not granted, (3) whether third parties will be unjustifiably harmed if the injunction is granted, and (4) whether the public interest will be served by the injunction. Id.

{¶ 13} No one factor is dispositive. Cleveland v. Cleveland Elec. Illum. Co. (1996), 115 Ohio App.3d 1, 14, 684 N.E.2d 343. When there is a strong [717]*717likelihood of success on the merits, preliminary injunctive relief may be justified even though a plaintiffs case of irreparable injury may be weak. Id.

{¶ 14} Appellant argues that there is little likelihood that KLN can prevail on the merits of its claim. He argues that his accepting of an offer of employment from Harward does not violate the express terms of the agreement he signed with KLN.

{¶ 15} KLN argues that once appellant had conceded that KLN’s customer or business contacts qualify as trade secrets, the argument over the propriety of the preliminary injunction is at an end. KLN claims that appellant used its proprietary information for his benefit and to KLN’s detriment.

{¶ 16} It is undisputed that the employment agreement at issue in this case is not a non-compete agreement. Both parties concede that the agreement does not prevent appellant from going to work for Harward. The agreement prohibits appellant from disclosing KLN’s proprietary information or otherwise circumventing KLN by using that proprietary information for his own personal gain and to KLN’s detriment.

{¶ 17} In this case, the parties agree that KLN’s customer or business contacts qualify as trade secrets and are confidential information. It is undisputed that appellant met Harward through appellant’s employment with KLN. KLN argues that by its express terms, the written agreement prohibits appellant from using KLN’s business contact and business relationship with Harward for his own personal gain without first getting written permission.

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Bluebook (online)
884 N.E.2d 631, 174 Ohio App. 3d 712, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kln-logistics-corp-v-norton-ohioctapp-2008.