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HNRK Wins Rare Temporary Injunction From An Arbitrator

After a financial services salesperson resigned and took a chunk of his employer’s database with him, HNRK successfully argued to an arbitrator acting under the American Arbitration Association’s Optional Rules for Emergency Measures of Protection, that he should award injunctive relief against the use and disclosure of our client’s trade secrets even though the underlying employment agreement only provided for monetary relief.

The agreement required mandatory arbitration of all disputes. It contained a six-month non-competition and non-solicitation clause and further stated that injunctive relief may be warranted to preclude harm arising from the misappropriation and disclosure of trade secrets. But, dueto poor drafting (no, not by us) the agreement only allowed the arbitrator to issue an award of monetary damages. To give effect to the entire agreement, HNRK argued and convinced the arbitrator that any limitation on his power pertained to the issuance of a final award and did not preclude him from issuing a preliminary injunction pending the full arbitration and his ultimate decision on the merits.

The arbitrator issued this interim award after an efficient four hour telephonic hearing, in which there was both direct and cross examination of the defendant and other witnesses. The emergency measures procedure turned out to be a successful, cost-effective and timely mechanism to obtain relief for the client, albeit one that is rarely utilized.

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