When litigating employment non-competition covenants, issuance by the court of a preliminary injunction may be more important than the ultimate outcome of the litigation. Depending on the circumstances, the injunction can prevent a former employee from working for a competitor for an extended period of time, sometimes beyond the duration of the noncompete in question. Conversely, denial of the motion for an injunction allows the former employee to continue working in the position that prompted the lawsuit in the first place. Last month, the North Carolina Court of Appeals reminded litigants of the limited circumstances under which it will intervene in the trial court’s determination over the injunction request.

In Mecklenburg Roofing Inc. v. Antall, the plaintiff sued a former employee and his new employer for alleged breach of a non-competition agreement. Following the trial court’s denial of its motion for a preliminary injunction, the former employer appealed this decision to the North Carolina Court of Appeals. Called an interlocutory appeal, the plaintiff requested review of the decision on the injunction prior to conclusion of the underlying litigation.

The Court of Appeals denied this request, noting the limited grounds for granting interlocutory relief. Under North Carolina law, the party appealing the injunction determination must demonstrate violation of a “substantial right” prior to the end of the litigation. In this case, the former employer only cited case law noting the legal standard and did not allege any specific substantial right that would be adversely affected by failure of the appellate court to intervene in the matter.

While this may sound like legalese, it can be difficult for employers to articulate specific and substantial harm that results from failure to enjoin a former employee from violating a non-competition agreement. In many cases, there is no calculable financial harm at the point the lawsuit is filed. The suit is intended to prevent the former employee from soliciting those former customer relationships. The practical effect of this decision is to raise the stakes for the initial injunction request even higher. If the employer has limited chances for an immediate appeal of denial of the injunction, that initial decision by the trial court may functionally serve as the end of the litigation.

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