Use of Injunctions to Enforce Non-Compete Agreements
Injunctions may be used to enforce a variety of rights, including rights under a non-compete, non-disclosure, non-solicitation or similar types of agreements, particularly those related to unfair trade or business practices or involving trade secrets.
By far the most common use of an injunction in those situations is for an employer to attempt block subsequent employment by one of its current or former employees by an employer when it believes that employment violates such an agreement. However, most employees don’t realize that it is also possible for them to seek injunctions against their current or former employers to stop them from interfering with employment by a new employer in the right circumstances.
Injunction cases are very heavily fact-dependent, and injunction law varies from state to state, and those variations can be significant. Further, judges have considerable discretion in how they handle injunction cases, and two judges may approach the same case differently. The purpose section is to explain only in very broad terms what an injunction is and the basic procedures that are used in obtaining one.
An injunction is essentially designed to prevent harm from occurring which would be difficult or impossible to remedy through the payment of damages or through some other legal remedy. Injunctive relief is to prevent future wrongdoing, not to remedy past wrongs. Injunctions are considered “equitable” remedies rather than legal remedies, and therefore use different standards.
The litigation of restraining orders and injunctions can be a time-pressured process involving many of the same considerations as a trial on the merits. An injunction may either compel or prohibit a party’s future action. There are three primary phases in the injunction proceedings, though in some circumstances different phases may be combined or omitted:
- Temporary restraining order;
- Preliminary or temporary injunction; and,
- Permanent injunction.
In some states, a temporary restraining order may be issued without notice to the other side and without a hearing, while other states require a hearing before issuing a temporary restraining order. The temporary restraining order and temporary or preliminary injunctions are temporary orders, while the permanent injunction is a permanent order going forward.
Also, in some cases, it is necessary to post a bond before the temporary restraining order will be issued. In some circumstances the requirement to post a bond may be waived. The purpose of the bond is to pay damages to the party restrained or enjoined in the event it is determined that the restraining order or injunction was wrongfully issued.
The party moving for a restraining order must show that they are entitled to the relief requested, that they would be caused “irreparable” harm, and that there is no adequate remedy at law to address the injury. An applicant for a temporary or permanent injunction must generally establish that there is a substantial likelihood of prevailing on the merits. These requirements can require an extensive analysis that is beyond the scope of this section, but it would be a big mistake to simply assume that a party does, or does not, meet these requirements until that analysis is done.
The process for obtaining a restraining order or injunction is started by filing the appropriate pleading in the right court. A temporary restraining order issued without notice to the other side is called an ex parte restraining order. An ex parte restraining order may be issued by the court immediately in those instances where a hearing is not required, but courts have considerable discretion in that regard. If the court chooses not to issue an ex parte restraining order, the court will normally set a hearing very quickly. Sometimes when a hearing is held, the court will issue a temporary injunction rather than a temporary restraining order, with the difference being that temporary injunctions are ordinarily longer in duration than a temporary restraining order, and can last the duration of the case until a permanent injunction is issued or denied.
The issuance of a temporary (sometimes also called preliminary) or permanent injunction may each require a separate hearing. Each hearing held (whether it’s for a temporary restraining order, temporary injunction or permanent injunction) is essentially a mini-trial with the evidence presented or witnesses’ testimony. Discovery is conducted as with any other type of litigation, though the time frames for completing this discovery can be greatly accelerated in some circumstances.
Because of how fact-specific these cases are and because of the variations in the law between different jurisdictions, the ability to obtain a restraining order or injunction can only be determined by an attorney with knowledge and experience in this area of the law. There is considerable misinformation among the general public about temporary restraining orders and injunctions, and it should never be assumed that a party can, or cannot obtain an injunction (or defend against one) until this review has been done.
It is worth to mention that protection benefits of the Non-Compete Agreement is totally worth the hassle associated with it’s enforcement.