South-Western Legal Studies in Business

Injunction Against Competition by Former Employee Requires Evidence of Irreparable Injury
Description Alabama high court held that when a company requests a preliminary injunction against a former employee, who is alleged to be in violation of a covenant not to compete, the employer must show that there is a possibility of imminent and irreparable injury.
Topic Court Procedure
Key Words Preliminary Injunction; Remedy at Law; Covenant Not to Compete
C A S E   S U M M A R Y
Facts Johns worked for Ormco, selling orthodontic equipment in Alabama and parts of two other states to a majority of the orthodontists in his territory. He had signed a covenant not to compete for one year after leaving Ormco, but ignored that when he went to work for a competitor supplier of orthodontic equipment. Ormco moved for a preliminary injunction against Johns to prevent him from working for a competitor in violation of the covenant. The trial court denied the request, holding that there were adequate remedies at law should it be found that Johns violated the covenant. Ormco appealed.

Reversed. “A plaintiff seeking a preliminary injunction has the burden of demonstrating 1) that without the injunction the plaintiff would suffer immediate and irreparable injury; 2) that the plaintiff has no adequate remedy at law; 3) that the plaintiff has at least a reasonable chance of success on the ultimate merits of his case; and 4) that the hardship imposed on the defendant by the injunction would not unreasonably outweigh the benefit accruing to the plaintiff.” Courts will not use the extraordinary power of injunctive relief merely to allay an apprehension of a possible injury; the injury must be imminent and irreparable in a court at law. Here there is a rebuttable inference of irreparable injury because Johns is in direct contact with Ormco’s customers. Johns must overcome that inference by producing evidence that competition will not irreparably injure Ormco.

Citation Ormco Corp. v. Johns, --- So.2d --- (2003 WL 2007816, Sup. Ct., Ala., 2003)

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