Spinks v. Automation Personnel Services, Inc.

Summary

The Supreme Court of Alabama reviewed a preliminary injunction against a former employee who had moved to a competing staffing company despite an arbitration agreement and restrictive employment covenants. The court held that the trial court retained jurisdiction to issue interim injunctive relief to preserve the status quo pending arbitration. However, because the trial court issued the injunction without requiring security under Alabama Rule of Civil Procedure 65(c) and made no applicable exception finding, the injunction was reversed and the matter remanded.

Holdings

1. A trial court retains jurisdiction to issue a preliminary injunction to preserve the status quo pending completion of arbitration when an arbitral award could not substantially restore the parties to that status quo.
2. Under Rule 65(c), Ala. R. Civ. P., security is mandatory before a preliminary injunction may issue unless the trial court makes a specific finding, based on competent evidence and identifying the applicable exception, that security is unnecessary or may be dispensed with.

Questions Presented

1. Whether the trial court retained jurisdiction to issue a preliminary injunction after compelling arbitration and staying the proceedings.
2. Whether the trial court could issue a preliminary injunction without requiring APS to post a bond or making a specific finding supported by competent evidence that an exception to the bond requirement applied.

Disposition

reversed_and_remanded