Any regular observer of the daily courthouse filings in Ohio will see the frequent description of new actions:
Acme Products, Inc. v. Wile E. Coyote, Complaint for TRO and Injunctive Relief, Contract and misappropriation of Trade Secrets, Coyote accepted position with direct competitor of Acme and took confidential information with him in violation of employment contract.
Most, if not the vast majority of such cases, seek the ex parte relief of a Temporary Restraining Order under Ohio R. Civ. P. 65(A); but, rarely is such relief appropriate. Of course, there are business-specific instances, such as strong inevitable disclosure evidence and immediate action by the movant, where exceptions arise. But, in the vast majority of these cases, TRO relief is not warranted.
The temporary restraining order is, as its name implies, a temporary measure available ex parte–.i.e., without notice to the opposing party–to serve as a precursor to the preliminary injunction. If the matter proceeds ex parte, then the relief requested must be considered a temporary restraining order. City of Cincinnati ex rel. Cosgrove v. Grogan, 141 Ohio App. 3d 733, 753 N.E.2d 256 (2001). Conversely, if the motion does not proceed ex parte, then the court should consider the relief requested to be a preliminary injunction rather than a temporary restraining order. See, Meade v. Beverly Enterprises-Ohio, Inc., 154 Ohio App. 3d 521, 797 N.E.2d 1040, 1042 (2003) (even though trial court captioned entry as “Temporary Restraining Order”, appellate court found the order was for a preliminary injunction); Turnoff v. Stefanac, 16 Ohio App. 3d 227, 16 O.B.R. 243, 475 N.E.2d 189 (Cuyahoga Cty. 1984) (even though movant brought motion for temporary restraining order, where all parties had notice of, were present at, and participated in hearing, it should be considered as motion for preliminary injunction).
This distinction is exceedingly important. Quite often, even the most skilled judges have policies that they will not grant a temporary restraining order without notice to the party whose conduct is being enjoined. This eliminates a fundamental portion of the remedy. The temporary restraining order must be available without notice to the opposing party and, therefore, must only be issued as a stop gap measure when the risk of giving notice to the enjoined party will run the risk of itself altering the status quo.
This fundamental difference specifies that a temporary restraining order is obtained without notice and automatically expires unless renewed for good cause, 14 days after it is entered (hence the stop gap nature of the relief). State ex rel. Tone v. Grey, 2004 Ohio 885, 6th Dist., 2004 Ohio App. LEXIS 818 at *6 (Feb. 20, 2004). If renewed, then the temporary restraining order expires no more than 28 days after the original issuance. Although the parties can consent to the second 14-day extension, the Rule provides no measure for the parties to consent to TRO relief beyond that time frame. Id. If desired, then the parties can consent to a preliminary injunction that would expire, not upon the entry of a permanent injunction, but as of the date of a reasonably scheduled preliminary injunction hearing.
In City of Cincinnati ex rel. Cosgrove v. Grogan, the First Appellate District followed the Ohio Supreme Court’s important distinction between temporary restraining orders and preliminary injunctions. The court applied Ohio Rev. Code §3767.04 and stated that, under both the statute and Rule 65, the temporary restraining order and preliminary injunction are two entirely different forms of relief. Cosgrove, 141 Ohio App. 3d at 742 (citing State ex rel. Pizza v. Rayford, 62 Ohio St. 3d 382, 582 N.E.2d (1992)). See also, State ex rel. Fisher v. Reno Hotel, 95 Ohio App.3d 67, 70-71, 641 N.E.2d 1155 (1994). The difference between the two lies in the fact that a temporary restraining order is ex parte. Although it is not necessary to obtain a temporary restraining order before moving for a preliminary injunction, the filing of an application for preliminary injunction is, in most cases, a necessary prerequisite to obtaining a temporary restraining order. Cosgrove, at 742-743. When a party files for temporary restraining order and preliminary injunction, but consents to providing notice to the opposition, then the matter should no longer be considered as a temporary restraining order and must proceed as a preliminary injunction.
It only makes logical sense that TRO relief is inappropriate in non-compete and trade secret cases. The very essential purpose of the TRO is to preserve the status quo, on an emergency basis, because any notice to the defendant of the relief sought could allow the defendant to take some action, before the hearing on the relief sought, which would permanently alter that status quo to the point where the plaintiff has no remedy at all. Once the employee leaves to join the competitor, the status quo is that she no longer works for the plaintiff; thus, ex parte emergency relief would actually alter that status quo instead of preserving it.
Ohio R. Civ. P. 65(A)(2) requires the party seeking the TRO to have its attorney certify to the court “in writing the efforts, if any, which have been made to give notice (of the hearing) and the reasons supporting his claim that notice should not be required.” If the attorney certifies that notice has been effectively given, then the matter cannot proceed as a TRO, as discussed above. On the other hand, the attorney in non-compete and trade secret cases cannot likely justify that no notice should be given. If, for example, the attorney has had any pre-suit discussions with the defendant, and no specific life-altering actions have been taken, then there can be no “emergency” justifying the ex parte relief, because such actions would have already occurred.
This is not to suggest that the hearing on the preliminary injunction should not be conducted immediately and on an urgent basis in these types of cases. The purpose of the preliminary injunction in non-compete and trade secret cases is to allow the Plaintiff to return the parties to the “status quo ante” (the positions the parties occupied before the improper conduct occurred). In other words, the status quo ante is that the employee worked for the Plaintiff, without disclosure of trade secrets and under a contractual obligation not to compete. This can be achieved through a well-crafted Order of Preliminary Injunction granting the prohibitive relief against the employee until the full trial on the merits, but after the Plaintiff has met its burden of proof through the preliminary injunction evidentiary hearing. For guidance on properly seeking such urgent relief against a rogue employee, click here.
In the myriad cases like the fictional description provided at the beginning of this article, the trial court should journalize the denial of the improperly sought TRO, but schedule the preliminary injunction in the same, urgent time frame of 14 days, as if the TRO were granted.