The US Court of Appeals for the Sixth Circuit has vacated a preliminary injunction in the case of UEC Holdings, Inc. v. Hatcher, which had barred a competitor from working on a contract with one of the plaintiffs’ key customers. The injunction had also directed independent forensic examiners to image and search the defendants’ electronic devices for “responsive items.”
The court gave two reasons for its decision. First, the plaintiffs did not show irreparable harm from the competitor’s contract, as it covered work that the plaintiffs could not perform and there was no evidence of lost business. Second, the forensic-examination provisions were not narrowly tailored, as they set no limits on custodians, devices, or information and did nothing to protect the defendants’ own confidential information.
Background of the Case
United Electric Company, Inc. is a Kentucky-based union contractor that provides electrical construction and utility services. Its parent company, UEC Holdings, Inc., was formed in 2019 after United Electric converted to an employee stock ownership plan structure. Steven Mark Hatcher, the defendant, started working at United Electric in 1998 and became vice president of its utility division in 2019, with access to sensitive information including confidential pricing and customer strategies.
In January 2019, Hatcher signed an employment agreement that contained a noncompete, customer and employee non-solicitation provisions, and a non-disclosure covenant. However, he was terminated in August 2025, and a forensic review of his company-issued devices revealed communications with Troy Kent, the owner of Kent Power, Inc., a Michigan-based utility contractor, in which Hatcher allegedly sent confidential pricing and rate materials.
Irreparable Harm and Forensic Examination
The Sixth Circuit stressed that irreparable harm is “indispensable” for a preliminary injunction and must be “actual and imminent” rather than “speculative or unsubstantiated.” The court found that the district court had relied on possible downstream effects of the competitor’s contract, rather than actual harm, and that there was no evidence that the plaintiffs would suffer irreparable harm if the contract were not enjoined.
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The DTSA requires that even seizure orders “provide for the narrowest seizure of property necessary,” and the Sixth Circuit held that the injunction still had to be “closely devised” to protect the defendants’ information. The court found that the order did not specify which custodians, devices, or information the examination covered, and it did not define what was “relevant” or “responsive.”
The case highlights the importance of tying relief to actual competitive harm and building a record of ongoing use of misappropriated information. Plaintiffs seeking to block a competitor’s customer contract should be prepared to show actual or imminent loss of business from that contract, or ongoing use of the trade secrets in that work. The court also emphasized the need for specifics of forensic protocols to be put in writing, including definitions of custodians, devices, search parameters, and what counts as “responsive,” as well as protective orders and clawback procedures.
In this case, the Sixth Circuit’s decision to vacate the preliminary injunction was based on the lack of evidence of irreparable harm and the overbroad nature of the forensic-examination provisions. The court’s ruling emphasizes the need for plaintiffs to provide concrete evidence of harm and to ensure that any relief sought is narrowly tailored to protect the defendants’ rights. The case is UEC Holdings, Inc. v. Hatcher, No. 25-6123, 2026 WL 2755021 (6th Cir. Sept. 17, 2026), and the judges who ruled on the case were Senior Judge Eugene E. Siler, writing for the panel, along with Circuit Judges Davis and Ritz.
The plaintiffs in the case were UEC Holdings, Inc. and United Electric Company, Inc., while the defendants were Steven Mark Hatcher, Kent Power, Inc., and Troy Kent. The case was brought under the Defend Trade Secrets Act (DTSA) and the Kentucky Uniform Trade Secrets Act (KUTSA), along with several state-law contract claims.
Implications for Future Cases
The decision in UEC Holdings, Inc. v. Hatcher provides guidance for plaintiffs seeking preliminary injunctions in trade secret cases. Speculation about future market entry is not enough to justify broad relief.
