On January 12, 2026, the U.S. Court of Appeals for the Eighth Circuit vacated a preliminary injunction in Choreo, LLC v. Kevin Lors et al., reinforcing the high threshold for injunctive relief in restrictive covenant disputes. The Court found that Choreo’s alleged losses, client departures and revenue, were quantifiable and compensable through monetary damages, rejecting claims of irreparable harm. It also noted that most harm had already occurred before the injunction was issued, further undermining the basis for equitable relief.
Key Takeaways for Employers
This decision underscores several key points:
- Injunctive relief requires clear, non-speculative evidence of imminent, irreparable harm, not just financial loss.
- Employers should document specific impacts, such as loss of goodwill or client relationships and explain why monetary damages cannot adequately address the harm.
- Restrictive covenants should be tailored and reviewed regularly to ensure enforceability.
Action Steps Employers Should Take
To reduce risk and strengthen protections, employers should:
- Audit existing employment agreements for compliance and enforceability.
- Develop protocols for advisor departures and client retention.
- Prepare detailed evidence when pursuing injunctive relief.
Impact of This Decision
This ruling underscores the importance of proactive planning and strong documentation when protecting client relationships. Firms should not rely solely on preliminary injunctions but instead implement comprehensive strategies to mitigate risk.
