The U.S. District Court for the Eastern District of Virginia (Richmond) recently handed down an important decision in Western Insulation, LP v. Hal Moore and Melanie Moore (January 22, 2008). The case arose out of the defendants’ sale of an insulation business to the plaintiff. In connection with the sale, the defendants entered into a non-competition agreement with the plaintiff. Subsequent to the sale, the plaintiff filed suit alleging, among other things, the defendants violated the non-compete provision of the sale agreement and asked the court to award it damages and to permanently enjoin the defendants from further violations of the non-compete.
The decision is important in Virginia for a number of reasons but, for this article, we will discuss the plaintiff’s request for an order permanently enjoining and preventing the defendants from future violations of the non-compete.
In the opinion, Judge James Spencer stated that to obtain a permanent injunction in Virginia a party must show:
(1). it has suffered an irreparable injury;
(2). remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
(3). that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4). the public interest would not be disserved by a permanent injunction.
This is a difficult test for most plaintiffs to pass and Judge Spencer deemed the imposition of a permanent injunction too harsh and severe under the facts of the case. Ultimately, the court imposed a temporary injunction preventing the defendants from violating the non-compete for an additional term equal to the length of time the court determined the defendants had been in breach of the non-compete.