Employees seriously underestimate how often businesses make applications to the courts for injunctions to restrain the activities of former directors and employees. This occurs on a daily basis and to become involved in such a process is extremely expensive and time consuming.
A recent case may be of interest. A company obtained an interim injunction preventing former directors and employees from using confidential information and intellectual property.
Former directors had contracted to provide a system similar to that of their ex-employers on substantially the same terms to the same party with whom the employer had previously contracted. The ex-directors denied any wrongdoing and asserted they should be free to fulfil the contract. The judge stated that it was plain that the basic idea between the two systems were the same.
The decision demonstrates the use of injunction to restrain a breach of contract. The main points of interest are:
(a) The judge rejected the ex-director’s submissions that he should take into account the merits of the employers’ case because the injunction would effectively decide the dispute. The judge found that he had to follow the principle in American Cyanamid. This test has been around for many years. In short the court will grant an injunction where the danger of further damage to the business of the employer is outweighed by the potential for an award of damages at a later date. The judge decided in this case not to depart from that principle but decided that the trial of the injunction would be expedited.
(b) Delay in applying for injunctive relief can affect the court’s assessment of the status quo. Where there has been a delay a new status quo may be held to have developed in the intervening period from when the alleged breaches first took place.
(c) The injunction permitted the ex-directors on certain conditions to carry out certain business pending the expedited trial.
Local legal advice about injunctions
If you have a question about injunctions, contact one of our specialist employment law solicitors. Bray & Bray have three main offices across Leicestershire, feel free to phone or pop in to talk to our solicitors.