Once an employer becomes suspicious that former employees are acting wrongfully, employers often consider seeking injunctive relief ex parte or prior to providing notice to the employee. Significant hurdles must be overcome, however, before a party can obtain a temporary restraining order ex parte. Under the Colorado and federal rules, a court may issue a temporary restraining order only if the applicant can show that immediate and irreparable injury will result to the applicant before the adverse party can be heard in opposition. In addition, the applicant must certify any effort made to give notice to the adverse party and the reasons why notice should not be required.
Together, these requirements often doom any application for a temporary restraining order. In the Gustafson case which we discussed last February, for example, Judge Krieger found that the plaintiff had failed to show that it would incur irreparable injury absent the injunction. As a result, she denied the employer’s application for a temporary restraining order.
In the July 17, 2009 decision in Statera v. Henrickson, Judge Blackburn on the federal district court in Colorado granted an employer’s application for a temporary restraining order against former employees even though the employer did not certify its efforts to give notice to the former employees. The order did not, however, compel the former employees to comply with their contractual or statutory duties to their former employer. Instead, the order “enjoined and restrained” the former employees from (1) deleting or destroying any of the employer’s trade secrets, confidential information and the like in their possession”; (2) taking any action to delete any information related to the former employer in their hard drive or other computer storage media; (3) making any copies of the employer’s confidential information; (4) making any use of the computers in their possession; and (5) deleting any email messages in certain accounts.
In the documents filed in support of the temporary restraining order, the employer presented evidence that the former employees had been employed as Vice Presidents and had had access to confidential information and trade secrets. The employees had signed agreements which barred them from using the employer’s trade secrets. After the employees left, the employer discovered that they were engaged in competitive activities. The employer hired a forensic computer expert who was able to determine that the employees had downloaded confidential files and had used the computers to organize their competitive enterprise. In addition, the expert discovered that the employees had attempted to use an “anti-forensics software shredder” program to disguise their activity on the computers.
Based on this record, Judge Blackburn declined to compel the employer to give notice of the temporary restraining order to the former employees. Judge Blackburn reasoned that notice should not be required because of the risk that the employees would, after receiving notice, again take action to alter, erase, or destroy evidence in their possession.
There are a number of lessons in the case for employees. Employees need to recognize that employers often will spend the time and money necessary to enforce confidentiality and non-compete agreements. Employers will examine a former employee’s computer to find out whether the employee has engaged in wrongful or suspicious behavior prior to leaving the company. Employers will find out if the employee has attempted to run an erasure program on his computer prior to leaving. The decision also provides yet more evidence that courts may be eager to grant relief, ex parte or otherwise, to employers when the employer is able to show that a former employee has engaged in intentional conduct to disguise potentially wrongful conduct.