Perficient, Inc. v. Craft

U.S. District Court, District of Minnesota July 10, 2024

Trial Court Opinion

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Perficient, Inc., Civ. No. 24-2425 (PAM/DJM)

Plaintiff,

v. MEMORANDUM AND ORDER

Thomas Craft,

Defendant.

This matter is before the Court on Plaintiff Perficient Inc.’s Motion for a
Preliminary Injunction.1 (Docket No. 2.) After receiving briefing from Plaintiff
Perficient Inc. and Defendant Thomas Craft, the Court held a hearing on the Motion on
June 27, 2024. As stated at the hearing, and for the following reasons, the Court denies
the Motion.
BACKGROUND
Perficient Inc. is an IT-consulting and software-development company that
employed Thomas Craft for nearly 13 years. (Compl. (Docket No. 1) ¶ 20.) While
working as Perficient’s Managing Director in its Minneapolis office, Craft’s
responsibilities included managing sales relationships with customers in Minnesota and
the surrounding area; as such, Craft had access to Perficient’s confidential business
information and trade secrets. (Id. ¶¶ 20-21, 23-31.)

1 Perficient styles its Motion as one for a temporary restraining order or a
preliminary injunction. As indicated at the hearing, because Craft had been notified of
the Motion and had an opportunity to be heard, the Court will treat the Motion as one for
a preliminary injunction. See Fed. R. Civ. P. 65(a)-(b).
During his employment with Perficient, Craft signed three agreements: a
Confidentiality Agreement in 2011, and two Stock Awards, one in 2023 and another

2024. The three agreements contain materially the same restraints regarding non-
solicitation and confidentiality. Each agreement dictates that Craft may not, for a period
of 24 months after his employment with Perficient, “directly or indirectly: (a) solicit (or
assist in soliciting) any Covered Client or Prospective Client for Competitive Products or
Services, or (b) provide (or assist another in providing) Competitive Products or Services
to any Covered Client or Prospective Client.” (Id. ¶ 33; id. Ex. A at 3; see id. Ex. B

¶ 15(e), Ex. C ¶ 15(e).) Each agreement further includes obligations to hold Perficient’s
information and trade secrets in confidence and not to use or disclose that information.
(Id. ¶ 34, 40, 44; id. Ex. A at 1-2, Ex. B ¶ 15(a), Ex. C ¶ 15(a).)
Craft resigned from Perficient in March 2024, due to “dissatis[faction] with the
demands placed upon [him] and the effect work had on [his] family and [his] mental

health,” without a plan for his future employment. (Craft Decl. (Docket No. 15) ¶ 4.)
Upon leaving Perficient, Craft did not take with him any confidential or client
information or any trade secrets. (Id. ¶ 14.)
Subsequently, on May 23, 2024, Craft called a Vice President at Perficient to let
him know that he had accepted a new position, but the call went unanswered. (Id. ¶ 5.)

In June 2024, Craft began as the Client Growth Officer at Clientek, a company that
Perficient claims is a competitor. (Compl. ¶ 4.) Clientek is a much smaller company
than Perficient—Perficient employs more than 7,000 people around the world and its
annual revenue exceeds $910 million, while Clientek employs 40 people and its annual
revenue is approximately $15 million. (Craft Decl. ¶ 8, 0.) Clientek focuses its business
on building custom applications for businesses and does not offer many of the IT-

consulting services offered by Perficient. (Id. ¶¶ 7, 9.) In March and June of 2024,
Perficient sent letters reminding Craft of his ongoing contractual obligations to Perficient.
(Compl. ¶ 58, 65-66.)
On June 12, 2024, Craft met Jason Hopkins, a professional acquaintance whom
Craft has known for years, for lunch. (Id. ¶ 69; Craft Decl. ¶ 6.) Hopkins works for a
company called BeiGene. (Compl. ¶ 69.) Craft recalls that Perficient was trying to

prospect work “to provide . . . software support” to BeiGene in the fall of 2023, but
BeiGene was “non-committal.” (Craft Decl. ¶¶ 3, 7.) When Craft resigned from
Perficient, he believed that BeiGene was not a customer of Perficient and that BeiGene
was uninterested in doing business with Perficient. (Id.) At the June lunch, Craft
explained his new role at Clientek and Clientek’s business of building custom

applications; Hopkins informed Craft that Clientek already has partners for the services
that Clientek offers but offered to introduce Craft to other individuals in the industry. (Id.
¶ 7, 10.) Shortly thereafter, Hopkins sent an email to Craft’s old Perficient email address,
stating, “Tom, thanks for lunch on Wednesday. I did get your new contact info and will
talk with a few people next week . . . to see if we can make a connection. Was great

catching up with you, sounds like you have a great opportunity in front of you with
Clientek.” (Compl. ¶ 70; id. Ex. G.).
Two days after the lunch, Craft learned from a former colleague at Perficient that
Hopkins’ email was sent to Craft’s old email address, and that Perficient had submitted
another pitch to BeiGene. (Craft Decl. ¶ 12.) Craft immediately sent a LinkedIn message
to Hopkins informing him that they could not discuss business due to Craft’s agreements

with Perficient, and Craft ceased all further communication with Hopkins. (Id. ¶ 12; id.
Ex. B at 6.) Perficient did not receive any business from BeiGene. (Id. ¶ 73.)
This lawsuit followed. Perficient brings claims for breach of contract;
misappropriation of confidential, proprietary, and trade secret information; breach of duty
of loyalty; unjust enrichment; and for preliminary and permanent injunctive relief. For
the purposes of this Motion, Perficient seeks to enforce Craft’s non-solicitation, non-

disclosure, and confidentiality obligations; Perficient is not pursuing any injunctive relief
related to its allegations in the Complaint that Craft breached his obligations not to
compete. (Pl.’s Mem. in Supp. (Docket No. 4) at 12.)
DISCUSSION
As an initial matter, the parties disagree as to the number of agreements at issue,

the governing law as to one of the agreements, and whether that agreement is valid. Craft
argues that the 2024 Stock Award is unenforceable, because it was entered into after

Minn. Stat. § 181.988

 took effect on July 1, 2023, preventing employees who primarily 
live and work in Minnesota from adjudicating disputes related to employment disputes 
for claims arising in Minnesota in another state.  (Def.’s Mem. in Opp’n (Docket No. 15) 

at 15.)  While Craft does not mention the Confidentiality Agreement in his memorandum, 
the Stock Awards contain essentially identical confidentiality obligations to those in that 
agreement.  The Confidentiality Agreement is governed by Minnesota law.  The parties 
ostensibly agree on the validity of the 2023 Stock Award, which is governed by Missouri 
law.  In any event, for the purposes of this Motion, the Court need not determine whether 
the 2024 Stock Award is valid or which state’s laws govern because all three agreements 

contain substantially the same confidentiality and non-solicitation obligations.  Moreover, 
neither party mentions any meaningful difference between the agreements’ obligations or 
the laws of either Minnesota or Missouri, and the Court did not find any consequential 
difference in its own research.                                           
Injunctive relief is “an extraordinary remedy that may only be awarded upon a 
clear showing that the plaintiff is entitled to such relief.”  Winter v. Natural Res. Def. 

Council, Inc.,

555 U.S. 7, 22

 (2008).  When deciding whether to issue a preliminary 
injunction, courts consider four factors: (1) the threat of irreparable harm to the movant; 
(2) the balance of harm the injunction would have on the movant and the opposing party; 
(3) the probability that movant will succeed on the merits; and (4) the public interest.  
Dataphase Sys., Inc. v. CL Sys., Inc.,

640 F.2d 109, 113

 (8th Cir. 1981).  While no factor 

is dispositive, “the absence of a likelihood of success on the merits strongly suggests that 
preliminary injunctive relief should be denied.”  Barrett v. Claycomb,

705 F.3d 315, 320

 
(8th Cir. 2013).                                                          
Perficient argues that Craft should be temporarily enjoined from solicitation of its 
clients  and  prospective  clients  and  be  ordered  to  comply  with  the  terms  of  the 

Agreements  and  not  to  use,  disclose,  or  misappropriate  any  Perficient  confidential, 
proprietary, or trade secret information.                                 
A.   Irreparable Harm                                                     
“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).    “[T]o 
demonstrate irreparable harm, a party must show that the harm is certain and great and of 
such  imminence  that  there is  a  clear  and  present  need  for  equitable  relief.”   Novus 
Franchising, Inc. v. Dawson,

725 F.3d 885, 895

 (8th Cir. 2013) (quoting Iowa Utils. Bd. 
v. Fed. Commc’ns Comm’n,

109 F.3d 418

, 425 (8th Cir. 1996)).  “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).   
Perficient fails to submit evidence that Craft’s actions caused irreparable harm.  
Perficient  presents  no  evidence  that  Craft  retained  any  Perficient  confidential 
information, trade secrets, or other customer information after he left Perficient, and there 

is  no  evidence  of  threatened  misappropriation  or  inevitable  disclosure  of  any  such 
information.    Likewise,  Perficient  fails  to  provide  evidence  that  Craft  solicited  a 
Prospective  Customer  for  Prospective  Products  or  Services  or  that  he  provided  any 
Competitive Products or Services, in violation of his obligations to Perficient.  Perficient 
fails to allege any monetary loss, merely explaining a hypothetical loss of BeiGene’s 

business  and  potential  loss  of  other  business  if  Craft  violates  the  non-solicitation 
provision in the future.  Moreover, Perficient presents no evidence showing that Craft had 
any knowledge of Perficient pursuing BeiGene for additional business.  “It is also well 
settled that economic loss does not, in and of itself, constitute irreparable harm . . ..  
Recoverable monetary loss may constitute irreparable harm only where the loss threatens 
the very existence of the [plaintiff]’s business.”  Packard Elevator v. I.C.C.,

782 F.2d 112

,  115  (8th  Cir.  1986).    Perficient  cites  no  evidence  of  any  damage  to  customer 
goodwill,  only  providing  conclusory  allegations.    See  Novus  Franchising,  Inc.  v. 
Dawson,

725 F.3d 885, 895

 (8th Cir. 2013) (citation omitted); see also Midwest Sign & 
Screen Printing Supply Co. v. Dalpe,

386 F. Supp. 3d 1037, 1055-56

 (D. Minn. 2019) 
(Tostrud, J.) (citation omitted).                                         
Perficient argues that the Court can infer irreparable harm, but the threat of such 

harm is insufficient in federal court.  While “inferring irreparable harm from the breach 
of a valid restrictive covenant is a Minnesota procedural doctrine developed and applied 
by Minnesota courts in deciding whether to grant injunctive relief under the Minnesota 
Rules of Civil Procedure,” such is not the case under the Federal Rules and case law.  
Moeschler v. Honkamp Krueger Fin. Servs., Inc., Civ. No. 21-0416,

2021 WL 4273481

, 

at *9 (D. Minn. Sept. 21, 2021) (Schiltz, J.) (emphasis in original) (citation omitted).  
“The Court will not use an injunction ‘simply to eliminate a possibility of a remote future 
injury, or a future invasion of rights’ or to allay [a former employer’s] fears and anxieties 
about [its former employee] working for [a competitor].”  Katch, LLC v. Sweetser,

143 F. Supp. 3d 854, 873

 (D. Minn. 2015) (Nelson, J.) (quoting Int’l Bus. Mach. Corp. v. 

Seagate Tech., Inc.,

941 F. Supp. 98, 101

 (D. Minn. 1992)).               
Perficient contends that, in any event, it need not show irreparable harm because 
Craft stipulated as much in the Confidentiality Agreement.  (Compl. ¶ 38;

id.

 Ex. A at 4.)  
This argument is unavailing because stipulations avowing irreparable harm neither bind a 
federal court nor relieve a party of its duty to demonstrate “actual irreparable harm.”  
Moeschler,

2021 WL 4273481

, at *13 (emphasis in original).                

Thus, the Court finds that Perficient has not demonstrated irreparable harm, and 
the Motion may be denied on that basis alone.                             
C.   Likelihood of Success on the Merits                                  
To demonstrate a likelihood of success on the merits, Perficient must establish that 
it has a “fair chance of prevailing” on a claim.  Planned Parenthood of Minn., N. Dak., S. 
Dak. v. Rounds,

530 F.3d 724, 732

 (8th Cir. 2008) (en banc).  This standard does not 

require “the party seeking relief [to] show ‘a greater than fifty percent likelihood that [it] 
will prevail on the merits.’”

Id.

 at 731 (quoting Dataphase,

640 F.2d at 113

).  
Perficient has not submitted sufficient evidence to show that it will likely prevail 
on its breach-of-contract claim under either Minnesota or Missouri law.  Conclusory 
allegations about potential confidential information or trade secrets that Craft may have 

or  could  reveal  in  the  future  are  insufficient  to  justify  injunctive  relief.    Perficient 
likewise  fails  to  describe  anything  more  than  a  hypothetical  breach  of  Craft’s  non-
solicitation obligations.  Indeed, as Craft contends, before seeking any information from 
Craft, Perficient constructed a federal lawsuit out of one lunch.  Had Perficient contacted 
Craft, it would have learned that he, on his own volition, ceased all communications with 

Hopkins.                                                                  
B.   Balance of Harms and Public Interest                                 
Perficient has not demonstrated that the balance of harms or public interest weigh 
in  favor  of  issuing  an  injunction.    As  described  above,  Perficient  presents  only 
speculative harm that Craft would violate his non-disclosure, confidentiality, or non-
solicitation  obligations  in  the  future.    Craft,  however,  explains  that  he  would  be 

“effectively . . . thrown  out  of  work”  because  Perficient’s  broad  definition  of 
“Prospective Client” includes organizations about which Craft had no knowledge while 
working at Perficient.  (Def.’s Mem. in Opp’n at 20.)  Perficient has not demonstrated 
that maintaining the status quo would harm it, while Craft would be harmed by the 
issuance of an injunction.  Finally, the Court finds that the public interest weighs in favor 
of Craft earning a living in his chosen profession.  Katch,

143 F. Supp. 3d at 876

 (“[A] 

person’s right to labor in any occupation in which he is fit to engage is a valuable right, 
[and] should not be taken from him, or limited, by injunction, except in a clear case 
showing the justice and necessity therefor.”).  The Court will not issue injunctive relief 
merely requiring that Craft abide by his contractual duties.              
CONCLUSION                                                                

Accordingly,  IT  IS  HEREBY  ORDERED  that  Plaintiff’s  Motion  for  a 
Preliminary Injunction (Docket No. 2) is DENIED.                          
LET JUDGMENT BE ENTERED ACCORDINGLY.                                      

Dated:                                                                    
                         Paul A. Magnuson                            
                         United States District Court Judge

Trial Court Opinion

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Perficient, Inc., Civ. No. 24-2425 (PAM/DJM)

Plaintiff,

v. MEMORANDUM AND ORDER

Thomas Craft,

Defendant.

the governing law as to one of the agreements, and whether that agreement is valid. Craft
argues that the 2024 Stock Award is unenforceable, because it was entered into after

Minn. Stat. § 181.988

 took effect on July 1, 2023, preventing employees who primarily 
live and work in Minnesota from adjudicating disputes related to employment disputes 
for claims arising in Minnesota in another state.  (Def.’s Mem. in Opp’n (Docket No. 15) 

at 15.)  While Craft does not mention the Confidentiality Agreement in his memorandum, 
the Stock Awards contain essentially identical confidentiality obligations to those in that 
agreement.  The Confidentiality Agreement is governed by Minnesota law.  The parties 
ostensibly agree on the validity of the 2023 Stock Award, which is governed by Missouri 
law.  In any event, for the purposes of this Motion, the Court need not determine whether 
the 2024 Stock Award is valid or which state’s laws govern because all three agreements 

contain substantially the same confidentiality and non-solicitation obligations.  Moreover, 
neither party mentions any meaningful difference between the agreements’ obligations or 
the laws of either Minnesota or Missouri, and the Court did not find any consequential 
difference in its own research.                                           
Injunctive relief is “an extraordinary remedy that may only be awarded upon a 
clear showing that the plaintiff is entitled to such relief.”  Winter v. Natural Res. Def. 

Council, Inc.,

555 U.S. 7, 22

 (2008).  When deciding whether to issue a preliminary 
injunction, courts consider four factors: (1) the threat of irreparable harm to the movant; 
(2) the balance of harm the injunction would have on the movant and the opposing party; 
(3) the probability that movant will succeed on the merits; and (4) the public interest.  
Dataphase Sys., Inc. v. CL Sys., Inc.,

640 F.2d 109, 113

 (8th Cir. 1981).  While no factor 

is dispositive, “the absence of a likelihood of success on the merits strongly suggests that 
preliminary injunctive relief should be denied.”  Barrett v. Claycomb,

705 F.3d 315, 320

 
(8th Cir. 2013).                                                          
Perficient argues that Craft should be temporarily enjoined from solicitation of its 
clients  and  prospective  clients  and  be  ordered  to  comply  with  the  terms  of  the 

Agreements  and  not  to  use,  disclose,  or  misappropriate  any  Perficient  confidential, 
proprietary, or trade secret information.                                 
A.   Irreparable Harm                                                     
“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).    “[T]o 
demonstrate irreparable harm, a party must show that the harm is certain and great and of 
such  imminence  that  there is  a  clear  and  present  need  for  equitable  relief.”   Novus 
Franchising, Inc. v. Dawson,

725 F.3d 885, 895

 (8th Cir. 2013) (quoting Iowa Utils. Bd. 
v. Fed. Commc’ns Comm’n,

109 F.3d 418

, 425 (8th Cir. 1996)).  “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).   
Perficient fails to submit evidence that Craft’s actions caused irreparable harm.  
Perficient  presents  no  evidence  that  Craft  retained  any  Perficient  confidential 
information, trade secrets, or other customer information after he left Perficient, and there 

is  no  evidence  of  threatened  misappropriation  or  inevitable  disclosure  of  any  such 
information.    Likewise,  Perficient  fails  to  provide  evidence  that  Craft  solicited  a 
Prospective  Customer  for  Prospective  Products  or  Services  or  that  he  provided  any 
Competitive Products or Services, in violation of his obligations to Perficient.  Perficient 
fails to allege any monetary loss, merely explaining a hypothetical loss of BeiGene’s 

business  and  potential  loss  of  other  business  if  Craft  violates  the  non-solicitation 
provision in the future.  Moreover, Perficient presents no evidence showing that Craft had 
any knowledge of Perficient pursuing BeiGene for additional business.  “It is also well 
settled that economic loss does not, in and of itself, constitute irreparable harm . . ..  
Recoverable monetary loss may constitute irreparable harm only where the loss threatens 
the very existence of the [plaintiff]’s business.”  Packard Elevator v. I.C.C.,

782 F.2d 112

,  115  (8th  Cir.  1986).    Perficient  cites  no  evidence  of  any  damage  to  customer 
goodwill,  only  providing  conclusory  allegations.    See  Novus  Franchising,  Inc.  v. 
Dawson,

725 F.3d 885, 895

 (8th Cir. 2013) (citation omitted); see also Midwest Sign & 
Screen Printing Supply Co. v. Dalpe,

386 F. Supp. 3d 1037, 1055-56

 (D. Minn. 2019) 
(Tostrud, J.) (citation omitted).                                         
Perficient argues that the Court can infer irreparable harm, but the threat of such 

harm is insufficient in federal court.  While “inferring irreparable harm from the breach 
of a valid restrictive covenant is a Minnesota procedural doctrine developed and applied 
by Minnesota courts in deciding whether to grant injunctive relief under the Minnesota 
Rules of Civil Procedure,” such is not the case under the Federal Rules and case law.  
Moeschler v. Honkamp Krueger Fin. Servs., Inc., Civ. No. 21-0416,

2021 WL 4273481

, 

at *9 (D. Minn. Sept. 21, 2021) (Schiltz, J.) (emphasis in original) (citation omitted).  
“The Court will not use an injunction ‘simply to eliminate a possibility of a remote future 
injury, or a future invasion of rights’ or to allay [a former employer’s] fears and anxieties 
about [its former employee] working for [a competitor].”  Katch, LLC v. Sweetser,

143 F. Supp. 3d 854, 873

 (D. Minn. 2015) (Nelson, J.) (quoting Int’l Bus. Mach. Corp. v. 

Seagate Tech., Inc.,

941 F. Supp. 98, 101

 (D. Minn. 1992)).               
Perficient contends that, in any event, it need not show irreparable harm because 
Craft stipulated as much in the Confidentiality Agreement.  (Compl. ¶ 38;

id.

 Ex. A at 4.)  
This argument is unavailing because stipulations avowing irreparable harm neither bind a 
federal court nor relieve a party of its duty to demonstrate “actual irreparable harm.”  
Moeschler,

2021 WL 4273481

, at *13 (emphasis in original).                

Thus, the Court finds that Perficient has not demonstrated irreparable harm, and 
the Motion may be denied on that basis alone.                             
C.   Likelihood of Success on the Merits                                  
To demonstrate a likelihood of success on the merits, Perficient must establish that 
it has a “fair chance of prevailing” on a claim.  Planned Parenthood of Minn., N. Dak., S. 
Dak. v. Rounds,

530 F.3d 724, 732

 (8th Cir. 2008) (en banc).  This standard does not 

require “the party seeking relief [to] show ‘a greater than fifty percent likelihood that [it] 
will prevail on the merits.’”

Id.

 at 731 (quoting Dataphase,

640 F.2d at 113

).  
Perficient has not submitted sufficient evidence to show that it will likely prevail 
on its breach-of-contract claim under either Minnesota or Missouri law.  Conclusory 
allegations about potential confidential information or trade secrets that Craft may have 

or  could  reveal  in  the  future  are  insufficient  to  justify  injunctive  relief.    Perficient 
likewise  fails  to  describe  anything  more  than  a  hypothetical  breach  of  Craft’s  non-
solicitation obligations.  Indeed, as Craft contends, before seeking any information from 
Craft, Perficient constructed a federal lawsuit out of one lunch.  Had Perficient contacted 
Craft, it would have learned that he, on his own volition, ceased all communications with 

Hopkins.                                                                  
B.   Balance of Harms and Public Interest                                 
Perficient has not demonstrated that the balance of harms or public interest weigh 
in  favor  of  issuing  an  injunction.    As  described  above,  Perficient  presents  only 
speculative harm that Craft would violate his non-disclosure, confidentiality, or non-
solicitation  obligations  in  the  future.    Craft,  however,  explains  that  he  would  be 

“effectively . . . thrown  out  of  work”  because  Perficient’s  broad  definition  of 
“Prospective Client” includes organizations about which Craft had no knowledge while 
working at Perficient.  (Def.’s Mem. in Opp’n at 20.)  Perficient has not demonstrated 
that maintaining the status quo would harm it, while Craft would be harmed by the 
issuance of an injunction.  Finally, the Court finds that the public interest weighs in favor 
of Craft earning a living in his chosen profession.  Katch,

143 F. Supp. 3d at 876

 (“[A] 

person’s right to labor in any occupation in which he is fit to engage is a valuable right, 
[and] should not be taken from him, or limited, by injunction, except in a clear case 
showing the justice and necessity therefor.”).  The Court will not issue injunctive relief 
merely requiring that Craft abide by his contractual duties.              
CONCLUSION                                                                

Accordingly,  IT  IS  HEREBY  ORDERED  that  Plaintiff’s  Motion  for  a 
Preliminary Injunction (Docket No. 2) is DENIED.                          
LET JUDGMENT BE ENTERED ACCORDINGLY.                                      

Dated:                                                                    
                         Paul A. Magnuson                            
                         United States District Court Judge

Reference

Status: Unknown