## Facts

- Clorox and S.C. Johnson & Son, Inc. (SCJ) compete in consumer products, including “natural” cleaning lines (Clorox’s GreenWorks and SCJ’s Nature’s Source).
- Timothy Bailey worked at Clorox from 1996 and became Vice President of Product Supply in 2005, overseeing Clorox’s global supply chain.
- Bailey served on senior governance teams and had access to detailed financial data and strategic plans, including initiatives involving GreenWorks.
- Bailey resigned from Clorox on April 14, 2009 and soon began working for SCJ in a comparable executive position.
- Clorox alleged Bailey possessed trade-secret information (product, marketing, and supply-chain strategies) and that SCJ threatened to misappropriate, or already misappropriated, those trade secrets through Bailey.
- Clorox sued under Wisconsin’s Uniform Trade Secrets Act and sought emergency injunctive relief, relying heavily on an “inevitable disclosure” theory (that Bailey would necessarily use or reveal trade secrets in his new role even absent proof of actual use or disclosure).
- SCJ challenged federal jurisdiction, arguing the amount in controversy was not adequately shown and that Bailey was an indispensable party whose joinder would destroy complete diversity; Bailey moved to intervene.

## Issues

1. Whether diversity jurisdiction existed given challenges to the amount in controversy and the claim that Bailey was an indispensable party under Federal Rule of Civil Procedure 19.
2. Whether Clorox satisfied the requirements for a TRO/preliminary injunction on a trade-secret misappropriation claim where the governing law did not recognize inevitable disclosure.

## Decision

- The court held diversity jurisdiction existed: the amount in controversy was legally sufficient, and Bailey was not an indispensable party.
- The court applied California law to the trade-secrets dispute.
- The court denied Clorox’s motion for a TRO and preliminary injunction for failure to show a likelihood of success on the merits.

## Legal Principles

- Diversity jurisdiction is not defeated by the absence of an alleged individual “conduit” of information where complete relief can be awarded among existing parties and the absentee’s interests are adequately represented; such a person is not “indispensable” under Rule 19.
- The amount in controversy may be satisfied based on the claimed value of trade secrets and requested equitable relief when it is legally possible the threshold is exceeded.
- A TRO or preliminary injunction requires, at minimum, a showing of a reasonable likelihood of success on the merits under Rule 65.
- Under California trade-secrets law, inevitable disclosure is not a recognized basis, standing alone, to restrain competitive employment or to establish threatened misappropriation.

## Conclusion

The court kept the case in federal court under diversity jurisdiction but refused emergency injunctive relief because Clorox’s showing of threatened misappropriation depended largely on inevitable disclosure, a theory unavailable under the governing California trade-secrets standard.


Clorox Co. v. S.C. Johnson & Son, Inc., 627 F. Supp. 2d 954 (E.D. Wis. 2009)