(Correction: Life Time Fitness filed a motion proposing a temporary restraining order in the Southern District of Texas on Jan. 20. An earlier version of this story erroneously indicated the status of the motion.)
A proposed motion for temporary restraining order from Life Time Fitness, Chanhassen, Minnesota, against a former executive and his new fitness business awaits a judge's ruling in U.S. District Court.
The proposed motion was filed in the Southern District of Texas on Jan. 20 one day after Life Time filed a 43-page complaint naming former Life Time Regional Vice President Kyle Bauer, Monica Bauer and ReNew You LLC as defendants. The complaint alleges Kyle Bauer "elected to pilfer" proprietary business information, duplicate Life Time's business model, and use company personnel to develop and open a competing business – Houston-based ReNew You MD and ReNew You Medi Day Spa – in breach of his fiduciary and contractual duties. (Read the complaint at the bottom of this page.)
The proposed motion calls for ReNew You to cease and desist all operations, and would bar it from offering and/or providing services provided by Life Time. The court ordered the parties in the case to meet for an initial pretrial and scheduling conference on March 7.
Life Time is also seeking disgorgement of Kyle Bauer's salary while he was involved in ReNew You matters, payment by the defendants to Life Time of reasonable royalties for misappropriating confidential information and trade secrets, and other monetary damages.
Lawyers for the defendants allegedly denied Kyle Bauer engaged in any unlawful behavior, according to the complaint. Bauer allegedly said he will "100 percent stand behind what [he] signed and will NOT violate [his] signed non-compete," according to the complaint. He allegedly offered to allow Life Time to inspect ReNew You before the complaint was filed.
Life Time detailed nine counts in the complaint: violation of the Computer Fraud and Abuse Act, breach of contract, breach of fiduciary duties, misappropriation of trade secrets, 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.
Bauer served as regional vice president for more than five years after he sold Kingwood, Texas-based Family Fitness Wellness and Sports to Life Time for more than $5 million in 2010. Bauer signed a non-compete clause agreement after the sale and was in charge of the 25 Life Time Fitness clubs in Texas, Georgia and Alabama until he was fired on January 4 after his actions were discovered, according to the complaint.
Life Time alleges Bauer breached the non-compete agreement, among other agreements, "egregiously and surreptitiously" through 2015 by using Life Time's time, resources, computers, proprietary information and employees to build the medi-spa and weight-loss business. Bauer is accused of using Life Time's medi-spa financial statements to build financial pro formas for what would eventually become ReNew You, and together with his wife, Monica, assigned his personal assistant at Life Time tasks to help develop the business.
Monica Bauer was the LifeSpa Department Head at Life Time's Kingwood club for six months in 2010 before she left and later rejoined the company in 2011 as a field training specialist at Life Time's Lake Houston club. She was promoted to regional LifeSpa manager for the Houston market in September 2014 before leaving the company again in December 2014.
ReNew You MD competes with Life Time in a new office less than four miles from Life Time's Houston City Centre club, according to the complaint.