The current kiss and tell cases of the celebrities whose names no-one is allowed to mention has put injunctions right back in the spotlight. But what do employers need to know about injunctions?
If you want to stop an employee, ex-employee or other third party from harming your business in breach of their legal obligations – by, for example, misusing confidential information in breach of contract or joining a competitor in breach of restrictive covenants – the threat is often immediate. As a result, you will normally need to apply for an urgent injunction to stop them either before, or at the same time as, you bring the full proceedings to enforce your legal rights (known as an ‘interim injunction’). Here, we highlight key hurdles you will need to overcome to obtain an interim injunction.
What you need to show
The courts have a wide amount of discretion and there are no fixed rules. But, as you would expect, courts will not grant an interim injunction lightly and you will need to satisfy them of the following points as a minimum:
You must have a real prospect of success at the final trial
You must be able to show that your business’ legal rights are being breached or threatened. For example, to successfully injunct an ex-employee from misusing confidential information, you must have good evidence to show what their confidentiality obligations are and how you say they have been breached. This might include: their signed contract showing the confidentiality obligations; emails/documents showing that they have disclosed confidential information; and witness statements supporting your case.
You would suffer the most prejudice
The court will look at which side will suffer the most prejudice if they go on to win the case at the final hearing: you, if you are not granted the interim injunction and you later win at the final hearing, or the other side if the injunction is imposed on them and they later win. To decide this, the court will look at:
Will damages protect you? You will have to show that damages will not be enough to compensate you if you are not given the injunction and you later win at the final trial. For example, to prove this, you might argue that if you win, the employee could not afford to pay the business’ damages anyway, so damages would be useless. Or, in a team move case, that if you win you wouldn’t be properly compensated because it would be too difficult to prove that the team move directly caused your business financial loss.
Will damages protect the other side? If you are given the injunction but, after the full trial, it is found that the injunction should never have been granted would damages be enough to compensate the other side? If not then you are less likely to be granted the injunction.
Special factors and merits: The court will consider all relevant factors. For example, has the employee already started work for the new employer? If so, the court may be less likely to want to reverse what has already been done (this is another reason to get your application in swiftly).
The application hearing is not a mini-trial. But, if one side’s case is especially strong/weak this is something the court can take into account when considering your application.
Additionally, if granting the injunction will in practice decide the whole claim (for example, if the injunction is to enforce a 3 month restrictive covenant that is due to end before the claim can be heard) the court will look even more closely at the merits.
If after looking at all of these points everything is still evenly balanced the court will retain the status quo until the final hearing. This is normally whatever the position was before the alleged breaches (i.e. the theft of confidential information).
Of course, you should make any application as soon as possible to stop the third party from gaining any unfair advantage or causing the business any more damage. As well as this, the court is unlikely to grant you an injunction if you unreasonably delay making the application.
But evidence is king
However, evidence is key to any injunction action: before making an application you must have enough evidence to show that the business’ legal rights are being breached or threatened and that damages would not be enough to compensate it if you ultimately win at trial. Otherwise your application will fail. As well as this, since you may well have to promise, or ‘undertake’, that you will pay the other side’s costs if you lose at the final hearing, you will want to have enough evidence to be confident in the merits of your case. Therefore the key to a successful injunction is recognising that this evidence is as essential as the need for speed.