Court Rejected Trade Secret Presumption

The Supreme Judicial Court ruled that irreparable harm is not automatically presumed in Massachusetts trade secret litigation.

Updated on Oct. 14, 2026 in Public Companies

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Should courts automatically stop former employees from soliciting customers if trade secrets were allegedly misused?

Massachusetts high court judges affirmed the denial of a preliminary injunction against two former employees of Daikin Applied Americas Inc. The ruling clarified that proving a likelihood of success on the merits does not automatically trigger a presumption of irreparable harm.

Why it matters

The decision clarifies a major legal standard for businesses in Massachusetts. Companies seeking to protect proprietary data can no longer rely on automatic assumptions of damage when pursuing injunctions against former employees.

The Supreme Judicial Court issued a 14-page decision regarding a request to ban the solicitation of 75 Daikin customers. The court affirmed the lower court's denial of the one-year ban.

The players

Daikin Applied Americas Inc.

This is a global manufacturer of heating, cooling, and ventilation technology that operates as a subsidiary of Daikin Industries.

RPAC LLC

This is the company formed by two former employees who were the subject of a legal challenge regarding trade secrets.

Supreme Judicial Court

This is the highest appellate court in the Commonwealth of Massachusetts that holds authority over state legal precedents.

The details

Daikin Applied Americas Inc. sued two former employees and their firm, RPAC LLC, seeking to block them from contacting its customer base. The defendants agreed to return confidential information, but the court ruled that the company failed to justify an injunction against client solicitation.

The Supreme Judicial Court issued the ruling on October 14, 2026.

Market Landscape

This decision marks a shift in how trade secret disputes are litigated by reinforcing strict evidentiary requirements for injunctive relief. It limits the ability of corporations to use automatic legal presumptions to restrict former employees from competing in the local market.

Businesses in Massachusetts will need to provide concrete evidence of potential damage when attempting to legally block former employees from soliciting clients. The ruling makes it more difficult for firms to enforce non-solicitation agreements without demonstrating actual, specific irreparable harm.

The takeaway

Companies should review their employment contracts to ensure that non-solicitation clauses are supported by specific documentation of potential harm. Relying on past legal presumptions regarding trade secrets is no longer a viable strategy for securing rapid court injunctions in this jurisdiction.