An injunction relief is a judicial order given in a civil trial or suit. This court order restrains people, entities, and organizations from pursuing a certain activity.
An example of an injunction or an injunctive relief is prohibiting the expansion of a business premise or pursuing business transactions that are considered harmful or could impair damage to the business or the plaintiff.
Failure to Comply
When an injunction is not implemented or followed by the parties, the result should show signs of irreparable damage. Anyone who fails to comply with an injunction relief may be charged with contempt of court, leading to hefty fines and even imprisonment in some cases.
In other words, an injunction relief is the only plausible binding between the plaintiff and the financial harm of a company.
Forms of Injunction Relief
There are three forms of injunction relief:
Temporary Restraining Order (TRO)
All three types of injunctions are implemented differently and are implemented over different timelines. For instance, a TRO is the initial defense that can be granted soon for anyone seeking injunction relief. It is applied to preserve the status quo.
An example of a TRO can be preserving wildlife from getting harmed, damaged, or destroyed in the process of constructing a business park, theme park, or some other commercial property.
A preliminary injunction is the second defense stage after the TRO has been settled. This is the chance for the parties involved to resolve it before a trial begins.
A permanent injunction is an abiding injunction, as the term implies.
Six Examples of Injunction Relief
To settle a constitutional dispute, injunction relief can be used in the following scenarios.
1. Infringement Of Intellectual Property
Any intellectual property infringement is a costly expense for property owners, making TROs an effective tool for patent owners to enforce shutting down a competitor for selling their products or using their trademark wrongfully.
Intellectual property infringement could also indicate plagiarizing another person’s company logo, packaging, model, etc.
A full-proof intellectual property infringement could result in a permanent injunction.
2. Poaching Clients or Employees
Former employees can often find the idea of bringing clients or employees from their old employees with them to their new company. As the ex-employer, you can use injunction relief to get a legal remedy.
If there was an enforceable non-compete agreement (NCA) paired with proof of poaching, you could pursue injunction relief to protect your company. However, there are criteria involved which need to be met. It depends on the degree of engagement with clients and if their business or professional practice is located near you, impacting your business in a negative way.
In such cases, a TRO is suitable to prohibit them from hampering your business.
3. Minority Shareholder Freezeouts
For companies with private stockholders, it is common for majority stockholders to “freeze out” minority stockholders, including termination of position in the organization. This is when a TRO can be implied to stop shareholders from freezing out the minority stockholders. This harms minority stockholders from earning a living, which is considered irreparable harm.
4. Breaches Of Fiduciary Duties
Injunction reliefs are helpful when those in charge of an organization are on the verge of destroying a business in any shape or form.
If an owner starts to sell company assets without the consent of other partners, it is considered a breach of fiduciary duty. An injunction relief can refrain them from such activities to keep the company afloat.
However, this breach needs to be proved by the plaintiff, showcasing that the defendant is taking actions to hamper the business. Records of monetary transactions are an effective way to prove the plaintiff’s case and vice versa.
5. Breach of Contract
Breach of contracts is taken very seriously in every industry. A written agreement between two parties, stating terms and conditions, is crucial to claim any breach of contract. It can include missed payments, lack of compliance, failure to fulfill requirements outlined in the contract, etc.
Any damages incurred from a breach of contract can be resolved with award money from the court. However, an injunction can also be a useful legal remedy to prevent further harm.
Declaring bankruptcy for any company means they transfer the rights to the court to liquidate their assets and pay off their debts.
Depending on the nature of bankruptcy, a company can decide how to dissolve its assets and to what extent. However, an injunction relief in bankruptcy is known as a stay of action, preventing creditors from claiming any money during the procedure.
A bankruptcy injunction, therefore, buys more time for the plaintiff and allows the court to make a fair decision.