A court of proper jurisdiction might grant or fail to grant injunctive relief based on the prong of irreparable harm to the plaintiff’s business. In this case, the employer is required to show the court that it would be in danger of severe and irreparable harm to the interests of its business, for which monetary damages would not remedy if the employee’s conduct remains unchecked. Accordingly, this underscores the need for employers to make sure that every employee acknowledges, during the signing of a restrictive covenant agreement, that they understand the employer would suffer irreparable harm in the case of a threat of breach or a breach itself.
As a continuation of our discussion, we have hammered on the “Likelihood of Success on the Merits” as another factor that determines the success or failure of being granted injunctive relief in this blog post.
The Likelihood of Success on the Merits in Seeking Injunctive Relief
Whether the agreement at issue is enforceable determines the likelihood of success on the merits of a breach of a restrictive covenant claim. In the U.S., the enforceability of restrictive agreements is usually enforced under each state’s common or statutory law. For instance, in New York, restrictive agreements enforced by courts include those that (1) are not injurious to the public, (2) do not impose an undue hardship on the employee, (3) protect legitimate interest(s) of the employer, and (4) are reasonable in space and time.
In the same line and with regard to confidential information or trade secret misappropriation claims, an employer may show a likelihood of success by, among other issues:
- Showing how the employee has already used or may use such information to harm the business
- Showing the steps the company took to preserve the confidentiality of such information-and-
- Advising the court about the nature of the information that an employee has wrongfully retained.
With that, we have concluded the three factors that determine the success or failure of being granted injunctive relief by a court. In the next blog post titled “Standing on Success in a TRO (Temporary Restraining Order) Application” and Part XIX of this series, we will hammer on “Standing on Success,” which is an important potential outcome and implication of seeking injunctive relief.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer & Author.