How Do Temporary Restraining Orders Help in Business Disputes?

May 27, 2016
« Next Previous »

Whether the company needs to prevent assets from being moved out of state or keep an aggrieved employee from disclosing proprietary business data, temporary restraining orders (TRO) are often the best course of action.

Many small business owners are unaware that restraining orders are not limited to domestic matters. Rather, businesses can also ask the court to grant immediate emergency relief. With the assistance of counsel, businesses can seek a TRO when filing their initial complaint with the court. Once granted, a TRO prohibits the defendant from taking certain actions until the return date of the Court’s Order to Show Cause. 

Temporary Restraining Orders

The plaintiff can seek to continue the court order via a preliminary injunction, which may be granted after the parties have both had an opportunity to submit affidavits, documents and other evidence to the court in support of their respective positions. If issued, the preliminary injunction will often remain in place until final judgment.

Pre-reqs for Granting Temporary Restraining Orders

Under New Jersey law, courts will take a number of factors into consideration when determining whether to grant a temporary restraining order. They include:

  • Irreparable harm: The court will not issue a TRO unless the plaintiff can show that an injunction necessary to prevent irreparable harm. Thus, in cases where monetary damages will make the plaintiff whole, the court is unlikely to grant the restraining order.
  • Likelihood of success: The plaintiff must also show that there is a reasonable probability it will succeed on the merits. This requires demonstrating that the legal principles and material facts underlying the claims are well-settled.
  • Balance of hardships: The court will also weigh the relative hardships to the parties. Accordingly, plaintiffs must show that they will suffer serious harm if an injunction does not issue, and, conversely, that the requested relief will have little or no effect upon the defendant.
  • Public interest: Where relevant, the court may also consider the public’s interest in determining whether an injunction should issue.

Benefits of Temporary Restraining Orders

Given that many New Jersey business lawsuits take years to go to trial, temporary restraining orders can be invaluable in preventing further harm.

In environmental litigation, TROs can be used to prevent further contamination of a property. With regards to safeguarding intellectual property, a TRO can restrain the defendant from further infringing a trademark or copyright. In an employment lawsuit, a TRO can be used to enforce the terms of a nondisclosure or non-compete agreement.

In any case, it is imperative to act quickly. In addition to protecting your legal rights, pursuing a TRO as soon as possible shows the court that the situation truly warrants “emergency” relief.