PCC Airfoils v. Daugherty — Sixth Circuit Rejects ‘Clear and Convincing’ Standard for Trade Secret Preliminary Injunctions

Background

Justin Daugherty spent 26 years as an engineer at PCC Airfoils, a manufacturer of industrial gas turbine airfoils. In 2020, PCC promoted him to director of engineering, but a corporate restructuring soon stripped him of the title and responsibilities. Frustrated by the demotion and lack of advancement, Daugherty accepted an offer to become the director of engineering at Consolidated Precision Products (“CPP”), a direct competitor. Daugherty did not have a non-compete agreement with PCC.

After Daugherty submitted his resignation, PCC investigated his printing activity and identified four documents containing confidential information about PCC’s airfoils that Daugherty had potentially queued for printing in his last two days on the job. Forensic analysts could not verify that the documents were actually printed, but when PCC did not find them among materials Daugherty left behind, it concluded he had taken them. PCC sued Daugherty and CPP under the federal Defend Trade Secrets Act (“DTSA”) and the Ohio Uniform Trade Secrets Act, and sought a preliminary injunction barring Daugherty from sharing trade secrets or working on similar products.

The district court (Judge Brennan, N.D. Ohio) denied the injunction, holding that PCC had failed to establish its case for each of the four preliminary injunction factors by “clear and convincing evidence.” PCC appealed.

The Court’s Holding

In a published opinion by Chief Judge Sutton, the Sixth Circuit reversed and remanded, holding that the district court applied the wrong legal standard.

The court explained that the four Winter factors for preliminary injunctions—likelihood of success on the merits, irreparable harm, balance of harms, and public interest—are not a checklist of elements that each must be proved by clear and convincing evidence. Instead, they form a “sliding-scale inquiry” in which a strong showing on one factor can outweigh a weaker showing on another. A court may grant a preliminary injunction when, taken together, the factors “clearly weigh in favor of granting injunctive relief.”

The court drew a critical distinction: the Supreme Court’s requirement of a “clear showing” to obtain a preliminary injunction (from Winter v. Natural Resources Defense Council) means that the balance of all four factors must clearly favor the plaintiff—not that each individual factor must be proved by a heightened quantum of evidence. Chief Judge Sutton noted that requiring clear and convincing evidence for the likelihood-of-success factor is “particularly odd” because it would force a plaintiff to meet a higher evidentiary standard than what will be required at trial, even before discovery is complete.

The court acknowledged two hard floors: a plaintiff with “no likelihood of success on the merits” or no showing of irreparable injury must lose regardless. But beyond these thresholds, the analysis is equitable and holistic.

Key Takeaways

• Clear and convincing evidence is not required for each preliminary injunction factor. The Sixth Circuit joins other circuits in treating the Winter test as a sliding-scale balancing inquiry, not a checklist where each element must be independently established by heightened proof.
• Overrules lower-court precedents. The opinion expressly retired the reasoning in Honeywell, Inc. v. Brewer-Garrett Co. (an unpublished 1998 Sixth Circuit case) and a “raft” of district court decisions that had applied the clear-and-convincing standard, especially in trade secret cases in Ohio.
• Federal procedural rules apply even to state-law claims. The court rejected the argument that Ohio’s stricter preliminary injunction standard should govern claims under the Ohio UTSA, holding that the preliminary injunction inquiry is procedural under Erie.
• Significant for trade secret plaintiffs. Trade secret cases often turn on preliminary injunctive relief because the harm—disclosure of secrets to a competitor—is difficult to undo. Lowering the evidentiary bar from “clear and convincing” to a holistic balancing test makes it meaningfully easier for plaintiffs to obtain injunctions in the Sixth Circuit.

Why It Matters

This decision matters for any company seeking emergency relief to prevent a departing employee from using trade secrets at a competitor. Under the old approach in many Sixth Circuit district courts, employers faced a near-impossible burden: prove trade secret theft by clear and convincing evidence before discovery, against an employee who may deny everything. The new sliding-scale framework allows courts to weigh strong circumstantial evidence of misappropriation (like the suspicious printing activity here) against the equities, rather than demanding dispositive proof at the preliminary injunction stage.

The ruling also has broader implications beyond trade secrets. Any plaintiff seeking a preliminary injunction in the Sixth Circuit—whether in patent, trademark, or other IP disputes—can now cite PCC Airfoils for the proposition that the Winter factors are equitable considerations to be weighed, not rigid elements requiring heightened proof.