4 Common Examples of Injunctive Relief

If ever there was a super legal-sounding term for a fairly common occurrence, it would be injunctive relief, which essentially, means to get someone to stop doing something. In other words, you want to enjoin (stop) the other party from doing something and the act of getting them to not do that something is your desired outcome or relief. Most often, there must be a showing of irreparable harm if the injunction is not implemented. This means that an injunction is the only thing standing between the plaintiff and substantial (usually) financial harm.

Injunctive relief usually takes one of three forms: temporary restraining order (TRO), preliminary injunction, and permanent injunction. As their modifying terms imply, each has a different level of time commitment involved. A TRO is often the first line of defense used by a party seeking injunctive relief because it can be granted and implemented quickly. The preliminary injunction comes after the dust of the TRO has settled and the parties have a chance to hash out before the court the circumstances that lead them to this particular point. A permanent injunction is just as it sounds – permanent.

In business, there are several scenarios in which injunctive relief may play a starring role in resolving a dispute. Here are four of the most common ones.

1) Infringement of Intellectual Property

Infringement of intellectual property, even for a day, can be incredibly costly to the owner of the property. Thus, TROs are a great tool for the patent owner to shut down the competitor who is selling his product or for the trademark owner to shut down an enterprise making and selling counterfeit purses with the owner’s trademark on them. More often than not, if the owner of the intellectual property can show that there is actual infringement, the injunction will easily evolve  into a permanent injunction.

2) Theft of Clients

What do you do if a former employee starts poaching your best clients? It depends, particularly on whether the employee had an enforceable non-compete agreement and if they are in fact poaching in areas they should not be. If that is the case, again, a TRO is the fastest way to get the undesirable action to stop. And, when the dust settles and the employee stops poaching clients, the parties can figure out how to move forward.

3) Minority shareholder freeze outs

In closely held, small business corporations with private stockholders, it is not uncommon for the majority (usually family) stockholders to “freeze out” the minority (usually non-family) stockholder, including termination of that minority stockholder’s position in the company. In this case, a TRO is an excellent vehicle for stopping the shareholders from freezing the minority shareholder out – and in some cases, getting them back into the job they were fired from. The irreparable harm here usually occurs because the minority stockholder is terminated from employment and thus unable to earn a living.

4) Breaches of Fiduciary Duties

Injunctions are particularly useful in situations where a fiduciary of a company starts going down a path that is destructive to the business and thus, the beneficiaries. For example, if one partner begins to sell massive amounts of company assets without approval or agreement from the other partner, a timely injunction can put the brakes on the bleeding enough to allow the parties to figure out what is going on.

If you find your business in a situation that could use injunctive relief, your first call should be to the Trembly Law Firm. We can provide assistance with all aspects of the representation, from start to finish.