Non-compete injunctions: If you’re an employee in South Carolina and you’ve ever signed a non-compete or non-solicitation agreement, then chances are that agreement also contains language regarding a non-compete injunction, which sounds like a variation of the following language:
Remedies and Enforcement. Employee acknowledges and agrees that a breach by Employee of the non-compete and non-solicitation provisions in this Agreement will cause serious and irreparable damage to the Company that may be difficult to quantify and for which monetary damages alone will not be adequate. Accordingly, Employee agrees that if the Company should bring an action to enforce its rights under this Agreement, the Company shall be entitled to: (a) temporary and/or permanent injunctive relief without the need for posting a bond; (b) money damages caused by the breach; and (c) reasonable attorney’s fees incurred by the Company in bringing and prosecuting any action for breach.
In a non-compete litigation context, “temporary injunctive relief” can often be the beginning and the end of the entire matter, and it is essential for South Carolina employees who are fighting a non-compete lawsuit to understand exactly what that means. So…
What is a preliminary injunction?
In essence, an injunction is a written command or order by a judge that prevents an employee from doing a certain thing or that forces an employee to take certain, affirmative steps. Generally, in order to get such an order, the employer must allege that the employee is a nefarious SOB who will utterly destroy the employer’s business while the lawsuit is going on, and these acts of devilry will cause such heinous permanent damage to the company’s reputation and ability to continue as an ongoing business that the ONLY POSSIBLE remedy is for the court to issue an injunction. Tears may be shed, clothes may be torn in anguish, and so on. Typically in a non-compete lawsuit, if the judge agrees with the tearful attorney for the company and decides to issue an injunction against the employee, then the employee will be ordered to comply with the terms of the non-compete or non-solicit agreement while the lawsuit continues.
When are non-compete preliminary injunctions typically issued in a lawsuit?
The employer’s request for preliminary injunction against an employee comes at the beginning of the lawsuit, typically right after the lawsuit itself is filed with the court. Employers must move quickly to seek an injunction, because if they delay, then it makes it much harder to argue at trial that an injunction–which the courts agree is a drastic and potentially devastating remedy–is truly necessary to protect an immediate harm from occurring.
What are the effects of a non-compete injunction when it gets issued?
Of course, issuing a non-compete injunction before the employer has proved a single, solitary fact at trial can be devastating to an employee, who may wind up being prevented from working altogether while the case is being litigated over the next 12-18 months. An employee’s ability to fight a lawsuit depends on his ability to pay a competent non-compete lawyer to defend the case, and an injunction can completely choke off that employee’s wages, which effectively kneecaps any defense at the start.
Lawyer secret: That’s generally why companies seek injunctions in the first place. Shhh, don’t tell anyone!
Good judges recognize this as a hardball litigation tactic, and they are generally careful to avoid issuing injunctions except in cases of extreme need or in cases of particularly bad behavior by an employee (theft of trade secrets, for example).
An employee’s potential loss of income to pay for an attorney is just one reason injunctions can have such serious impact on the case. The other reason is that an employee’s willful disobedience of the order results in the court finding the employee in contempt of court, which can result in monetary fines and even jail time. The contempt possibility is what gives the injunction its sharpest teeth.
What steps should a South Carolina employee take if facing a hearing on a non-compete injunction?
Once the employer requests a non-compete preliminary injunction be issued, the court will set a hearing to decide the matter. Some county courts are more efficient than others. If the case is filed in Greenville County, for instance, a hearing can be set as soon as two weeks after the lawsuit is filed and the lawsuit has been served on the employee/defendant.
That means an employee cannot delay. You should seek out immediate legal counsel from attorneys who have years of experience fighting non-compete agreements on behalf of employees. Bring your copy of the lawsuit and motion for injunction with you to the first meeting with your attorney. Also bring copies of relevant documents, such as the non-compete agreement, employee handbook, cease and desist letters you may have received, emails, or other documents that may prove useful to your attorney in crafting a defense and preparing for the hearing.
In my next post, I’ll talk a little more specifically about how to defend against an injunction at the hearing. In the meantime, if you have general questions about non-compete agreements, head over to our sister blog, Beat Your Non-Compete, and get yourself educated.