4/18/2018. Jennifer Platzkere Snyder DILWORTH PAXSON LLP. A court order requiring a person to do or cease doing a specific action.

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1 Jennifer Platzkere Snyder DILWORTH PAXSON LLP A court order requiring a person to do or cease doing a specific action. Extraordinary remedy ONLY granted when legal damages are not available or not sufficient FRCP 65 PA R. Civ. P The black hole case Injunction sought to halt a multi-billion dollar particle-physics experiment that could create a black hole which would devour the planet 1

limit discounter from selling more than his

criminal I mean, innocent until proven guilty

case NJ Supreme Court sustains injunction

comic because it brought disrepute to the

2 The rebel potato grower case Injunction granted to potato marketing association to limit discounter from selling more than his official quarterly quota of potatoes So, this criminal I mean, innocent until proven guilty guywalked into a courtroom The judicial comic case NJ Supreme Court sustains injunction issued to stop judge from moonlighting as a comic because it brought disrepute to the bench Competition Solicitation of customers/clients Solicitation of employees/contractors Use/disclosure of confidential information Disparagement 2

3 Irreparable injury Monetary damages inadequate Balance of hardships favors equitable remedy Public interest not disserved Temporary Restraining Order (TRO) Preliminary Injunction Permanent Injunction Temporary Restraining Order (TRO) Can be ex parte Must prove - Immediate and irreparable harm Certification why notice could not be given (or efforts made) Likelihood of success on merits Post bond Preliminary Injunction Notice required Following expedited discovery and evidentiary hearing Must prove likelihood of success on merits Post bond pending permanent injunction Agreement to maintain status quo PermanentInjunction Notice required Following full discovery and evidentiary hearing Must prove actual success on merits 3

Contents Persons Bound Reasons why issued Specific terms

required CANNOT MERELY REFER TO PLEADINGS FOR SCOPE Parties Their

persons in active concert or participation ONLY BOUND IF RECEIVED

breach any of the covenants, Company shall be entitled to

4 Contents Persons Bound Reasons why issued Specific terms Reasonably detailed description of the act(s) restrained or required CANNOT MERELY REFER TO PLEADINGS FOR SCOPE Parties Their officers, agents, servants, employees, and attorneys Other persons in active concert or participation ONLY BOUND IF RECEIVED ACTUAL NOTICE In the event Employee breaches or threatens to breach any of the covenants, Company shall be entitled to injunctive relief, enjoining or restraining such breach or threatened breach. Employee acknowledges that Company s remedy at law is inadequate and that Company will suffer irreparable injury if such conduct is not prohibited. 4

5 Employee and Company agree that, because of the difficulty of ascertaining the amount of damages in the event of Employee s breach, Company shall be entitled to recover, at its option, as liquidated damages and not as a penalty, a sum equal to $. The parties further agree that the existence of this remedy will not preclude Company from seeking or receiving injunctive relief. Employee further agrees that the covenants shall be construed as separate and independent of other provisions of this Agreement and the existence of any claim by Employee against Company shall not constitute a defense to the enforcement by Company. Many parties put them in contracts Including ME! BUT text of contract is not dispositive Just because a contract declares money damages inadequate does not make it so Just because an employee agrees that a breach will cause immediate and irreparable harm does not make it so Judges want to do their own analysis! 5

Showing inadequacy of remedy at law ($$$) is predicate for injunction

Injury is not remote or speculative Injury is actual and imminent

conjunction with other facts In irreparable harm analysis, court

Admissions Court ignored acknowledgment, refusing to enter TRO or

Substantial likelihood of success on merits Legitimacy of irreparable

6 Showing inadequacy of remedy at law ($$$) is predicate for injunction BUT, need to show more for irreparable harm! Injury is not remote or speculative Injury is actual and imminent Contractual acknowledgement not binding, but persuasive in conjunction with other facts In irreparable harm analysis, court considered: Loss of clients Trade secrets Status as a unique employee Admissions Court ignored acknowledgment, refusing to enter TRO or preliminary injunction following hearing RATHER, court asked about: Substantial likelihood of success on merits Legitimacy of irreparable injury Balance of harms Public interest Interest of third parties Adequate remedy Practicalities related to enforcement 6

Consider this clause: I expressly agree that my exclusive remedies for violation of the terms,

earned from the date of any discharge until the date of any decision.

not limited to reinstatement and/or injunctive relief.

contextfocused clause that addresses injunctive relief Details matter!

Note if both parties were represented by counsel Do not overreach If overbroad, could be deemed

7 Consider this clause: I expressly agree that my exclusive remedies for violation of the terms, conditions or covenants of employment shall be limited to a sum equal to the wages I would have earned from the date of any discharge until the date of any decision. I understand that I shall not be entitled to any other remedy, at law or in equity, including but not limited to reinstatement and/or injunctive relief. Court rejected enforcement as against public policy Have a well-crafted, specific and contextfocused clause that addresses injunctive relief Details matter! Include recitals, representations, facts Explain business justification for clause in industry Note if both parties were represented by counsel Do not overreach If overbroad, could be deemed unenforceable and jeopardize right to any injunctive relief May seem generic Tailoring important Anticipate the What Ifs Definitions Cure period Notice Obligations prior to cure Ensure consistency with overall contract 7

Lots of freedom to decide scope of remedies UCC may supply terms if commercial contract for goods Rest (2d) Contracts 378: party can choose among

enforcement Waiver Estoppel Clause permits nonbreaching party to choose when and how to enforce rights without losing out in future One party may

objective reasonableness Clause gives more protection to intent of parties than mere reliance on implied covenant of good faith and fair dealing

8 Lots of freedom to decide scope of remedies UCC may supply terms if commercial contract for goods Rest (2d) Contracts 378: party can choose among multiple remedies unless Remedy selected is bar to different remedy OR Material reliance by other party on chosen remedy Beware defenses absent enforcement Waiver Estoppel Clause permits nonbreaching party to choose when and how to enforce rights without losing out in future One party may declare satisfaction/dissatisfaction with the performance or goods provided of the other party. Sole judgment" test vs. objective reasonableness Clause gives more protection to intent of parties than mere reliance on implied covenant of good faith and fair dealing Contract can be enforced even if one term fails Attempt by parties to enable a court to save the contract but for the offensive part What is essential purpose of agreement 8

Won t save unconscionable or illegal agreement

Elements: Valid contract Party who is ready,

Can be one way Beware contradictory provisions

Can t force an individual to perform contracted

9 Won t save unconscionable or illegal agreement Statute may override Remedy compelling a party to perform rather than pay $ damages Discretionary and extraordinary remedy in equity Elements: Valid contract Party who is ready, willing and able to perform Balance of equities Can be one way Beware contradictory provisions when drafting 13 th Amendment So what can you do? Can t force an individual to perform contracted services Can stop individual from performing other activities. 9

American Rule No attorneys fees unless by agreement, statute or by way of sanctions.

is important What is covered Attorneys fees Costs Witness/expert fees Is REASONABLENESS an issue?

If breach alleged Once breach proven ( prevailing party ) WHAT IF SETTLEMENT IS REACHED PRIOR TO

10 American Rule No attorneys fees unless by agreement, statute or by way of sanctions. Purpose of clause is to protect and indemnify parties for abiding by obligations Scope of clause is important What is covered Attorneys fees Costs Witness/expert fees Is REASONABLENESS an issue? When covered? If breach alleged Once breach proven ( prevailing party ) WHAT IF SETTLEMENT IS REACHED PRIOR TO FINAL RULING? 7 th Amendment Preserves right to jury trial for common law claims only Enforceability factors Knowing Voluntary Public policy Unconscionability Alternative Dispute Resolution? 10

11 Jennifer Platzkere Snyder DILWORTH PAXSON LLP (215)

Preliminary Injunctive Relief to Protect Trade Secrets and Enforce Non-Competes:

1 Preliminary Injunctive Relief to Protect Trade Secrets and Enforce Non-Competes: Is It Possible To Put The Toothpaste Back In The Tube? Attorney Advertising Prior results do not guarantee a similar outcome