Stopping a Disloyal Employee: Temporary Restraining Orders and Injunctions

Introduction

Construction businesses rely on employee trust, but disloyal insiders can misuse confidential information to cause significant harm. When this happens, immediate action is crucial. This alert explains how contractors can use Temporary Restraining Orders (TROs) and Preliminary Injunctions to prevent further damage.

Obtaining a TRO and Preliminary Injunction

While lawsuits typically take time, TROs and Preliminary Injunctions provide swift relief by temporarily halting harmful actions. To secure this relief, courts require the following:

1. Likelihood of Success: Strong evidence supporting your claims.

2. Irreparable Harm: Damage beyond monetary loss, such as harm to reputation or trade secrets.

3. Balance of Hardships: The harm to you outweighs the harm to the defendant.

4. Public Policy: No broader societal harm results from the relief.

A TRO freezes harmful actions until a hearing, where the court decides on issuing a Preliminary Injunction. If granted, this remains in place until the lawsuit is resolved, potentially becoming permanent.

A Real-World Case

A construction manager discovered a project manager colluding with a subcontractor to manipulate bids. Evidence included suspiciously similar errors in competing bids and sudden email deletions by the project manager. The manager demonstrated irreparable harm, including potential reputational damage and liability for price-fixing. The court granted a TRO and later a Preliminary Injunction, stopping further misuse of insider information. The case resolved with a Permanent Injunction, avoiding prolonged litigation.

Best Practices

Confidentiality agreements can strengthen your case, as they simplify proving breaches of sensitive information. Contractors should consult experienced legal counsel to address such issues promptly and effectively.

 

If you would like more information regarding this topic please contact Austin S. Brown at abrown@wbgllp.com or call (914) 607-6435