“Can I compete with my former employer without getting sued?”

Question: Can I be sued by a previous employer that fired me if I start my own business and contact my old clients with the previous employer?

         Mahomet, Illinois

Answer: Lonny, with a few precautions, you should be all right. Here are my thoughts:
1. We live in a very free society that prides itself on its free enterprise system. For that reason, competition in business and other affairs is encouraged. As I often say, “That is why my mother came to this country!”

2. Provided you have not signed a “non-compete” or “non-solicit” agreement, you can compete with a former employer, and that includes contacting its clients to tell them you offer a better product, at a better price, with better service. Hopefully, you will beat them at their own “game.” 

3. You cannot, however, take a list of customers from a previous employer, or use such a list. That would be a theft of confidential information. Likewise, you can’t use or divulge other secret information, such as secret recipes, or computer programs. Of course, you can try to remember who the former customers were, and you can research them in books and on the internet.

4. You can use your former employer’s vendors, suppliers and sources. Provided you have not signed a “non-solicit” agreement, you can even contact the previous employer’s employees and offer them jobs. Hopefully, you’ll be a better, kinder, more generous employer. 

5. You can even move right next door to your previous employer. You cannot, though, do anything that would confuse customers or clients, such as use a company name very similar to your previous company’s name. 

One small clarification is in order: In our society, anyone can sue anyone. What I mean is this: even if your former employer has no legal basis to sue you, some companies sue their new, young competitors just to try to drive them out of business. For that reason, I can’t say that your previous employer cannot sue you, and that it will not sue you, but that if it does it should not have a good legal basis to do so. 

This is a very free society, and one that encourages the free flow of commerce, and you should not hesitate to enjoy that freedom. I strongly encourage you to do so. Just follow these guidelines, and of course, use common sense and good judgment.

For those wanting personal attention and counsel, Al Sklover is available for Private Telephone Consultations on the subject of Non-Competition and Related  Restrictions on your working freedom. Choose 30-, 60- or 120-minutes. If interested, just [click here.]

Hope that helps. As one businessman to another, I ask you to consider recommending our “service” to one or two of your friends on Facebook, LinkedIn, or some other social media outlet. Fair deal?

Best, Al Sklover   

© 2010 Alan L. Sklover, All Rights Reserved.

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