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The Legal Landscape - July 2018

lesson learned Jun 21, 2018

by Philip E. Goss, Jr., ESQ.

You train your students to physically defend themselves in as an efficient manner as possible. The shorter the unpleasant “transaction” lasts, the better. Sometimes, involvement in the legal system is necessary and truncating the process, as in a fight, is always in your best interests.

Neither I nor other attorneys operate under the assumption that legal talent is sought to draft all corporate documents. The Internet places a vast library of potential and free (but questionable) legal resources at your immediate disposal. Ninety eight percent of the time, what you find on the Internet can work for its intended purposes. However, it is the 2% that will cause you angst and added expense.

Just about everyone is familiar with the concept of a “legal injunction.” In short, an injunction is an order of the court that requires someone to either do something or refrain from doing something. Some injunctions can be obtained before the other party even knows you’re seeking an injunction. (This is known as an “ex-parte preliminary” or “temporary injunction.)

Injunctions are a very sharp arrow in your quiver. An ex-parte injunction is a powerful tool and can potentially stop a legal problem in its tracks. This avenue of relief typically becomes an option when, say, an employee seeks to solicit your students when she leaves to start a new school. A related situation is when the employee violates a noncompetition agreement and seeks to work within a precluded geographic area.

I trust that these situations are addressed in your current employment agreement. If not, they should be.

Typically, a court will entertain and enter a temporary injunction to protect your interests.

But only if you can plead:
• A plausible reason why you would win at trial.
• That you are being immediately harmed, so that the failure of notice to the defendant is excusable and that you have no adequate remedy at law.

Once entered, the rogue ex-employee will be temporarily hamstrung in her efforts to harm your interests. However, there’s big “bugaboo” involved. A court will typically require an “injunction bond” to protect the employee, should he or she be legally harmed by the entering of the injunction.

These injunction bonds are not the typical bond. There, a criminal defendant pays 10% of the judicially determined bond. An injunction bond is different. Whether you fund it in cash, or if a bonding company posts it for you (at a healthy fee), it will require that you front the funds or adequate security for the injunction to be effective. The smallest injunction bond I’ve ever seen started at a minimum of $10,000.

It’s a hollow victory to convince a judge to enter an ex-parte injunction, but then be financially unable or unwilling to front the cash bond required. Of course, I wouldn’t be devoting a column to this issue unless I had a solution. A simple one that has worked for me over the years.

In any written agreement that provides for injunctive relief, I always add a simple sentence. “The parties agree that if an injunction is sought, the parties waive the necessity of a bond, or, if a bond is required, it shall be limited to $1,000.”

While I can’t guarantee that this will work always and in every jurisdiction, it has worked for my clients in the past and certainly solves a real problem.

In martial arts parlance, the ability to obtain a low investment or bond-free ex-parte injunction is the difference between a knockout punch and a 10-round bout. It costs little and the benefits are potentially great. One simple sentence rarely carries as much potential legal upside and savings.

Of course, a temporary injunction is, by its very title, “temporary.” You will at some point be required to prove to the court why your relief should become permanent. In most situations and by that time, the legal momentum is on your side.

All the more reason not to rely upon the Internet for your legal advice!

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