Business litigation frequently begins with contract issues. Organizations that negotiate contracts expect the other parties who sign written agreements to uphold them. Contracts generally outline the exact expectations and obligations of each party to ensure clarity and prevent conflict.
Many companies add restrictive covenants to employment contracts. These clauses prohibit certain actions, such as disclosing private information or directly competing against an employer after leaving a job. Organizations may also add restrictive covenants to agreements with vendors and service providers to protect their trade secrets and prevent unfair competition.
Discovering that an employee or another business has violated a restrictive covenant can be frustrating. Business leaders may need to pursue commercial litigation to enforce a restrictive covenant.
How can the courts help?
Provided that the contract is valid and there is documentation affirming a violation of the restrictive covenant it contains, businesses can ask the courts for support. There are several ways for the courts to assist a business dealing with a breach of contract scenario.
When another company or a former employee has violated a restrictive covenant, the courts can issue an injunction forbidding any future violations of the restrictive covenant. A judge could also choose to enforce any penalty clauses included in the original contract. In cases where the violation of a restrictive covenant has caused clear financial harm, the business affected by the breach of contract might also be able to request damages.
Gathering evidence of infringing activity is often the first step toward justice after the violation of a restrictive covenant. Commercial litigation can generate consequences for the party in breach of the contract and serve as a deterrent to others who are subject to similar contract terms.
