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A preliminary injunction, as a general rule, will issue only 1) if a plaintiff is able to show likelihood of success on the merits of his case and 2) if a plaintiff is likely to sustain irreparable loss unless the injunction is issued, or if, in the opinion of the court, issuance is necessary for the protection of a plaintiff's rights during the course of litigation.
Plaintiff Masterclean of North Carolina Inc., employed defendant John Guy as a laborer. Plaintiff was engaged in the business of asbestos abatement, containment and removal. When plaintiff employed defendant, the parties entered into an employment agreement with a covenant not to compete and a covenant not to disclose confidential information and trade secrets. Defendant agreed that for five years following his employment, he would not engage in asbestos removal anywhere in the United States where plaintiff operated or intended to operate. In October 1985, plaintiff terminated defendant's employment. Defendant held the position of project manager at that time. A month later, defendant was employed by an asbestos abatement contractor. Thus, plaintiff filed its complaint and motion for a preliminary injunction against defendant, averring that it was entitled to a preliminary injunction and permanent injunction issued to defendant to enforce a non-competition agreement. The court granted plaintiff's motion for a preliminary injunction. Hence, defendant was enjoined for one year or until trial from competing with plaintiff through the use of knowledge acquired during his employment with plaintiff. The court specifically restrained defendant from any employment on projects that were bid or negotiated between plaintiff and defendant's present employer or successor employer within North Carolina, South Carolina, Virginia, Georgia, and Alabama. Defendant employee appealed.
Was the issuance of the preliminary injunction proper?
The court ruled that the appeal of the interlocutory order was proper; absent review prior to a final determination, the defendant would be deprived of his right to work and earn a living. The court held that injunctive relief was inappropriate. Likewise, the scope of the injunction was too broad. The court further found that plaintiff employer failed to show a likelihood of success on the merits as it did not establish a need for patently unreasonable restrictions that embraced the entire United States. The court thus determined that the trial court was without power to reform the contract as it did by reducing the restricted territory to five states. Also, plaintiff did not show a reasonable apprehension of irreparable injury. Since the court found that most of the defendant’s experience was the actual removal of asbestos, and only a small percentage of his time involved customer contacts. Furthermore, plaintiff’s procedures were neither patented nor secret, schools conducted courses in asbestos removal, numerous manuals were available, and competitors could visit each other's job sites. Accordingly, the court vacated the preliminary injunction.