Coney Island Auto Parts Unlimited, Inc. v. Burton

Coney Island Auto Parts Unlimited, Inc., a New York-based auto parts distributor, filed a lawsuit against its former senior sales manager, Thomas Burton, on January 20, 2026. The company alleged that Burton violated the non-compete and confidentiality clauses of his employment agreement by joining a direct competitor and soliciting Coney Island's clients. The plaintiff sought a preliminary injunction to halt these activities, claiming imminent and irreparable harm to its business relationships and proprietary customer data. The case was heard in the United States Court of Appeals for the Federal Circuit on jurisdictional grounds related to trade secret claims.

The appellate court affirmed the lower court's decision to grant the preliminary injunction. It held that Coney Island Auto Parts demonstrated a likelihood of success on the merits of its contract and trade secret claims, finding the restrictive covenants to be narrowly tailored to protect the company's legitimate business interests without imposing an undue hardship on Burton.

The central dispute revolved around whether the non-compete and non-solicitation covenants in Burton's employment contract were reasonable in geographic scope and duration under New York law, and whether the information he possessed rose to the level of a protectable trade secret warranting emergency injunctive relief.

The ruling reinforced the enforceability of carefully drafted restrictive covenants in employment contracts for companies relying on close customer relationships, emphasizing that the protection of proprietary business information extends to meticulously curated customer lists when they derive independent economic value from secrecy. It served as a cautionary guide for sales professionals considering moves to competitors.