A permanent injunction order will restrict the business practices of a former Life Time Fitness vice president who was accused of stealing company information to open a rival business, a federal judge ruled Sept. 20.
U.S. District Judge Nancy F. Atlas has prohibited former Regional Vice President Kyle Bauer and his wife Monica from opening or operating any new locations of their Houston-based ReNew You MD and ReNew You Medi Day Spa brands through September 2017. Through September 2018, they also are prohibited from opening gyms within a seven-mile radius of any of Life Time’s 123 existing locations, as well as employing or attempting to employ any current or former Life Time employees.
Within 20 days of the court order, the Bauers are additionally required to return or destroy all Life Time documents and information still in their possession. After no more than 25 days, they must provide the court with a declaration confirming that all sensitive data has been secured. Finally, between 20 and 90 days after the ruling, a forensic computer specialist “shall have the right to inspect and audit any computer systems of Kyle Bauer, Monica Bauer, [business associate] Dr. Yarish, and the ReNew You Entities to ensure that any and all Life Time information has been destroyed or permanently deleted,” according to the order.
This January, Life Time accused the Bauers of stealing proprietary business information in order to develop ReNew You. According to the initial suit, Life Time hired Bauer in 2010 after the company purchased for more than $5 million a competing club that Bauer owned. Bauer had been in charge of 25 Life Time properties across Alabama, Georgia and Texas before he was fired on Jan. 4 of this year after colleagues learned of his alleged activities setting up ReNew You. Bauer had allegedly signed a three-year non-compete contract with Life Time.
Monica Bauer was most recently regional LifeSpa manager for Life Time’s Houston market before leaving the company in December 2014.
Life Time’s initial motion called for ReNew You to cease and desist all operations, accusing the Bauers of breach of contract, breach of fiduciary duties, misappropriation of trade secrets, violation of the Computer Fraud and Abuse Act, violation of the Texas Uniform Trade Secrets Act, tortious interference with prospective contracts, tortious interference with existing contracts, conspiracy and aiding and abetting breach of fiduciary duties.
According to the court order, the Bauers “denied and deny Life Time’s allegations,” while both parties “now wish to end this lawsuit (including all actual and potential claims/counterclaims).”
The parties reached a separate and undisclosed “Compromise and Settlement Agreement,” the order said.
Life Time Fitness ranked No. 3 on Club Industry’s Top 100 Health Clubs of 2016, just behind 24 Hour Fitness and LA Fitness. Club Industry estimated Life Time's 2015 revenue at $1.354 billion.