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Mallet & Co., Inc. v. Lacayo

Behind the breads, cakes, and other treats on our grocery store shelves, there is a ferociously competitive market for baking supplies, and that is the setting for this trade secret and unfair competition case.

In 2019, Mallet and Company Inc. (“Mallet”) learned that Russell T. Bundy Associates, Inc., doing business as Bundy Baking Solutions (“Bundy”), was becoming its newest competitor in the sale of baking release agents. Release agents are lubricants that allow baked goods to readily separate from the containers in which they are made. Bundy was already well-known for other products it offered to the commercial baking industry when it decided to launch a new subsidiary,

Synova LLC (“Synova”), to sell baking release agents. Synova hired two of Mallet’s employees, both of whom had substantial access to Mallet’s proprietary information. Taking some of that information with them from Mallet to Synova, they helped Synova rapidly develop, market, and sell release agents to Mallet’s customers. Mallet sued, saying such progress would have taken years to accomplish but for the misappropriation of its trade secrets. Agreeing with Mallet, the District Court issued the preliminary injunction now challenged on appeal, restraining Bundy, Synova, and those employees (collectively, “the Defendants”) from competing with Mallet.

While we appreciate the challenges inherent in disputes involving trade secrets and requests for preliminary relief, the injunction at issue is flawed and must be vacated. For the reasons that follow, we will remand for further consideration of what, if any, equitable relief is warranted and what sum Mallet should be required to post in a bond as “security … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c).

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