Employers love preliminary injunctions in restrictive covenant cases. And courts are supposed to grant them only in extraordinary circumstances.
The 8th Circuit just reminded everyone what “extraordinary” actually means.
In Choreo, LLC v. Lors, a private-equity-owned financial advisory firm watched its office implode. Four senior advisors resigned and joined a competitor; weeks later eight of the nine remaining advisors followed them. Clients fled. Roughly $400 million in assets under management walked out the door.
Choreo did what employers do in these situations. It sued. It alleged noncompete and nonsolicitation violations, employee raiding, trade secret theft, and tortious interference. The district court responded with a nuclear option—a broad preliminary injunction barring the former advisors from servicing clients, communicating about their new jobs, or recruiting employees, and barring the new firm from basically touching anything related to Choreo.
The 8th Circuit just vacated it all. Why? One word: irreparable harm.
Yes, Choreo lost clients. Yes, it lost goodwill. Yes, its branch was effectively gutted. But none of that, the court held, justified emergency injunctive relief.
Client losses are calculable. This is the financial services industry. Fees are percentage-based. Assets are known. Lost revenues can be estimated and awarded as damages. Calling the harm “goodwill” doesn’t magically make it intangible and incalculable.
As to the claim of branch destruction, it came too late. By the time the injunction issued, the damage was already done. Injunctions prevent future harm; they don’t rewind the clock.
The court’s message was blunt: economic harm—even massive economic harm—is not irreparable if money can fix it. And conclusory declarations saying “this can’t be calculated” don’t cut it when the numbers are sitting right there in the record.
Just because a preliminary injunction doesn’t issue doesn’t mean a restrictive covenant is unenforceable. Choreo may still win on the merits. But preliminary injunctions are not automatic in employee-defection cases—far from it. The bar is high. And if you want one, you’d better prove, with clear evidence, that money damages won’t do the job.
