Defending against an injunction application
Gannons defended an injunction application for breach of restrictive covenants and against allegations of misappropriation.
Our client was preparing to leave her professional services firm. She was aware that she was possibly subject to restrictive covenants which might prevent her from competing with the firm and taking clients with her. She was aware that her employers would attempt to serve her with an injunction. Before she resigned, she wanted to get clarity of her position.
Anticipating an interim injunction
An interim injunction pending a full trial is usually an emergency procedure brought at short notice. The accused then has to scramble to try and catch up.
The application was made after our client resigned and left the firm. As we anticipated the application, we were able to defend the application in much more detail than the employer had expected. This put us in a strong negotiating position. As such we negotiated a very favourable settlement for our client with her employers.
Restrictive contract terms
We advised our client on the specific wording of the covenants in her employment contract. Based on our analysis, we established to what degree the post termination restrictions were legally enforceable. Whilst it seemed unlikely, we could not guarantee that the firm would not succeed in getting an injunction against our client to stop her from leaving and taking her clients. We also advised on the possible costs and consequences for our client. Our client was able to make an informed decision about the risks she was taking thanks to our analysis.
Owing to the legal analysis we had done, we had been able to ask our client to gather all of the necessary evidence we would need to argue against the injunction. This was done before she resigned. Often the defendant employee is not ready at the first injunction hearing and the injunction is then granted for a brief period, enabling the employee to prepare. This makes the employee feel weaker tactically, as it puts them on the back foot with an injunction already having been made.
Refusal of the injunction application
The case that we put together was successful and the injunction was refused. Our client was able to join her new firm and continue to work for her clients.
After the injunction
That was not the end of the matter. The firm still had a claim against our client despite the refusal of their interim injunction. There was still a threat the case could go to a full trial. At this stage they could still seek damages or an injunction. Having beaten off the interim injunction application, our client had secured a costs award in her favour. We used this and our client’s superior tactical position to negotiate an end to the case via mediation on terms that were very satisfactory to our client.
General points for resisting injunctions
Injunctions move quickly and preparation is essential. The more time that we have to prepare, then the better the outcome is likely to be. It is possible in some circumstances to seek an indemnity from a prospective employer to cover the risk of defending injunction proceedings, and any damages claim. However, sometimes this is counterproductive. It may encourage the former employer to bring a claim when it would not have otherwise done so. This is in the belief that it has a good prospect of recovering damages or costs from the prospective employer.
The whole team at Gannons were so prepared for this it was phenomenal. They absolutely blew this case away.