H. F. GARCIA, United States District Judge.
On this date the Court Considered Plaintiff's motion for a temporary restraining order, filed May 6, 1999, in the above-numbered and styled cause. After careful consideration, the Court will deny the motion.
Plaintiff, Merrill Lynch, seeks injunctive relief against Defendant, Born, a former employee of Merrill Lynch, complaining that Born breached his employment agreement with Lynch; converted trade secrets, customer lists, and confidential business information; breached his fiduciary duty; and engaged in unfair business competition. Specifically, Merrill Lynch asks this Court to enter a temporary restraining order pursuant to Federal Rule of Civil Procedure 65, enjoining Born from soliciting business from any client of Merrill Lynch whom Born served or whose name became known to Defendant while in the employ of Merrill Lynch; from accepting any business or account transfers from any such customers; and from using, disclosing, or transmitting for any purpose the information contained in Merrill Lynch's records. Merrill Lynch also requests that Born be ordered to return any and all information pertaining to Merrill Lynch customers. Merrill Lynch supports its motion for relief with a verified complaint and with the affidavit of company vice president Janet M. Krug. Krug's affidavit details at length the importance and worth of the information allegedly at Born's disposal. In addition, Krug's affidavit states, "Several Merrill Lynch clients Defendant serviced . . . have informed us that Born has solicited them by telephone to transfer their business." See Krug affidavit at 3.
Federal Rule of Civil Procedure 65 permits the granting of injunctive relief only where the applicant has demonstrated (1) a substantial likelihood of success on the merits; (2) a substantial threat of immediate and irreparable harm that cannot be compensated by damages; (3) that greater injury will result from denial of the injunction than from it being granted; and (4) that an injunction will not disserve the public interest. Mississippi Power Light Co. v. United Gas Pipeline, 760 F.2d 618, 621 (5th Cir. 1985). The Court finds that Merrill Lynch cannot satisfy the first or second requirements. Clearly, the only allegation that Born is, in fact, engaged in the complained-of conduct is Krug's statement, which is wholly hearsay. This evidence is insufficient to demonstrate either a substantial likelihood of success on the merits or the immediate threat of irreparable harm.
Preliminary injunction proceedings are not bound by the strict evidentiary rules of trial. See Federal Savings Loan Ins. Corp. v. Dixon, 835 F.2d 554, 558 (5th Cir. 1987). The Fifth Circuit has cited with approval First Circuit law that allows a district court to consider hearsay contained in affidavits when ruling on motions for injunctive relief. Id.; Asseo v. Pan American Grain Co., Inc., 805 F.2d 23, 26 (1st Cir. 1986). However, in Dixon, the Fifth Circuit noted that the dispositive question in such cases must be "whether, weighing all the attendant factors, including the need for expedition, this type of [hearsay] evidence was appropriate given the character and objectives of the injunctive proceeding." Dixon, 835 F.2d at 558 (quoting Asseo, 805 F.2d at 26).
In Dixon, the Court noted that the granting of injunctive relief by the trial court in that case had been based on "extensive evidence in the form of affidavits, several thousand pages of documents, business records of earnings, sworn statements, admissions of defendants and their answer to the complaint, and defendants' apparent efforts to block discovery." Id. In addition, the court noted that the district court had relied only on "some" hearsay evidence. Id.
Here, Merrill Lynch has submitted nothing but hearsay evidence going directly to the question of whether this defendant is engaging in the alleged misconduct. The only other "evidence" provided by Merrill Lynch comes in the form of favorable rulings in other courts on motions for injunctions against other defendants. The Court does not believe this is the situation, envisioned by Dixon, where "some" hearsay evidence might be considered. Nor does the Court find that the need for expedition in this matter outweighs the value of a showing of a substantial likelihood on the merits. The Court has adjusted its docket to accommodate an early hearing on the motion for a preliminary injunction.
ACCORDINGLY, the motion for a temporary restraining order is DENIED. It is further ORDERED that a hearing on the motion for a preliminary injunction shall be held on Monday, May 10, at 9 a.m., in Courtroom 5 of the John H. Wood, Jr., Federal Courthouse.