Business disputes are common in today’s competitive marketplace. Unfortunately, the behavior of other parties, including business partners and former employees, can bring permanent harm to a business. You may need to request an injunction to protect the company when this happens.
An injunction is a court order prohibiting another party from taking a specific action. In the court system, injunctive relief is enacted to prevent immediate and irreparable harm to a business. While it isn’t used lightly, some situations warrant these measures. It’s vital for any business owner to know what those situations are and how to build a viable case for injunctive relief to stop someone else from harming what you have worked so hard to build.
Situations That May Warrant an Injunction
Breach of Contract
When you have a contractual agreement with another party and they fail to hold up their end of the bargain due to a business dispute, it can cause lost revenue and introduce financial instability for your business. This is especially true if you cannot fulfill orders or you have made business decisions and investments based on the assumption that the other party would follow through with their promises. In this case, filing for an injunction to protect your business can prevent further damage by forcing the other party to honor the terms of the agreement.
Trade Secret Theft
Trade secrets are any form of confidential information that gives your business a competitive edge in your market. For example, you may have a proprietary formula or design for a product, or you may have invented a process that allows you to create a high-quality product using fewer resources. Trade secret theft, governed by 18 U.S. Code § 1832, can involve copying, duplicating, buying, misappropriating, or even deceptively obtaining this information. If other companies could get hold of and use this information, it could ultimately lead to a weakening of the business and a loss of revenue.
The federal government takes trade secret theft very seriously — even attempting to commit it is a federal crime punishable by up to 10 years in prison and millions of dollars in fines.
Non-Compete Breaches
Although non-compete agreements are controversial, they have proven critical for fair business practices because they prevent former employees and business partners from taking knowledge, trade secrets, and intellectual property from your company and using them to benefit a competing business. These agreements protect the investment you have made in employee training and can also reduce turnover. When someone violates a non-compete agreement, it can cause financial losses for your business, especially if that person steals clients or tarnishes your brand image.
Client Solicitation
Your business can lose out on current revenue streams and future potential income when former employees or partners solicit your clients to use their products and services. Additionally, this can cause others to perceive your business differently and assume that the company cannot maintain strong client relationships. Over time, this can deter new clients from doing business with you, leading to even more significant profit loss.
Asset Misuse
Asset misuse happens when a business partner or former employee uses company resources for personal gain. This can harm your business in untold ways, including:
- Leading to direct financial losses via theft or unauthorized purchases
- Reducing cash flow, making it difficult to pay bills or make payroll
- Hindering investment in growth, expansion, and innovation opportunities
- Damaging reputation and trust with customers, investors, and other stakeholders
- Losing revenue and market share due to customers buying from competitors.
It can also lead to reduced productivity and a culture of mistrust, impacting your business internally.
Trademark Infringement
Trademark infringement occurs when someone uses a trademark without permission from your business. This can confuse your customers, making it difficult for them to distinguish between your brand and the one that is infringing on your trademark. In turn, this can dilute the distinctiveness of your brand, ultimately damaging its value and causing an erosion of trust and loyalty with current and potential customers. If another company uses your trademark to sell low-quality or inferior products or enact scams, it can lead to serious consequences for your business and harm your brand in ways you may not be able to bounce back from.
Do you need help filing for injunctive relief? Our team at Weisblatt Law Firm can help you understand your options for protecting your business. Call (713) 666-1981 to get a free phone consultation from an experienced business attorney.
Types of Injunctions You Can Obtain
Temporary Restraining Orders
Sometimes, a judge recognizes that something must be done immediately to prevent harm while a full investigation is conducted. They may issue a temporary restraining order (TRO) against the person perpetrating the harmful behavior. This orders them to stop until a ruling can be made based on more complete information. These orders are short-term for emergencies and may last only a few days or weeks.
Preliminary Injunctions
A preliminary injunction is often issued on a longer-term basis than a temporary restraining order. It seeks to stop the other party from causing immediate and irreparable harm to your business until a full hearing can be held and a final decision made. For example, a judge’s preliminary injunction may prevent a competitor from launching a new product or stop a former employee from starting work with a different company.
Permanent Injunctions
A permanent injunction may be issued after a judge makes a final ruling on your case. This order prevents the other party from engaging in the behavior deemed harmful to your business at any time, now or in the future. It represents the ultimate form of injunctive relief for your business.
What Proof Is Necessary to Obtain an Injunction?
Imminent and Irreparable Harm to the Business
You must be able to prove to the court that the behavior the defendant is engaging in is likely to produce harm to your business. You must also show that this harm isn’t expected to be easily fixed with a monetary award.
Little Harm to the Public Interest or the Other Party
Before granting an injunction, the judge must weigh the cost of issuing it. You should be able to prove that an injunction would not cause harm to the public interest (such as withholding a critical medical treatment). It’s also vital to show that it would not cause undue hardship to the other party if the request for injunction is granted.
Likelihood of Success
A judge may be more likely to issue an injunction if you show them you have a strong case. If you are unlikely to win the lawsuit, the court may think twice about issuing it.
Consult With an Experienced Attorney to Ensure Protection and Fair Treatment
Though you may believe that you have a viable case for an injunction, you must be able to effectively present your evidence to the court in a way that clearly demonstrates the irreparable harm you may suffer without it. An experienced business attorney can help you achieve that goal. Your lawyer will be able to walk you through the filing process and help you understand your rights and legal options every step of the way.
Worried about someone else’s actions causing harm to your business? Our team at Weisblatt Law Firm can help. Call (713) 666-1981 to get a free phone consultation from an experienced business attorney.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
