Question: I was a sales rep for a welding supply distributor. I quit my old job and I came to this new job. I never signed any non-compete agreement. A customer of my old job contacted me asking for a quote on argon, something both my old employer and my new employer sell. That quote went well, and now we have their argon business.
Then my former employer sued me and my new employer for a breach of contract for $50,000. Since then, to settle the suit, my new employer and my old employer agreed – without me being involved – that I would not work for my new employer for 24 months.
Now I am unemployed. Can I sue my old employer for interference?
Answer: Dear Dan: Your situation is becoming more and more common. Here is the relevant analysis to follow to get the answer to your question:
1. If you did not sign a non-compete agreement, you are entirely free to go to work for a competitor of your former employer. The freedom to work for whom you want to is a very basic and fundamental freedom, and an important part of the free-market, free enterprise system. If you did not sign a non-compete agreement, then you cannot be “legally” sued for violating it. That said, some employers use threats of litigation, and actual litigation, as improper “weapons” to get what they want. And, sadly, sometimes it works.
2. However, your former employer may have alleged that you violated a different kind of “agreement” that is implied in the law: the implied agreement (i) not to be disloyal while still employed there, (ii) not to steal customer lists, and/or (iii) not to steal pricing information. While you may not have signed an agreement not to compete after you left, the law says that every employee must honor an “implied” contract not to (i) tell customers to come along with you before you leave the old employer, (ii) take client lists with you, or (iii) take pricing information with you. It is possible you violated one or more of these “implied” agreements, or that your former employer believes you did.
3. If you did not violate either (a) a written non-compete agreement, or (b) one of the “implied” agreements noted above, then you may just have a good case of “interference” to sue for. A growing area of employment law is what employment lawyers call “unjustified interference,” or “tortious interference” by a former employer with an employee’s new work relation. It is just what it sounds like: interfering with someone’s employment without a justifiable reason. Sadly, more and more employers seem to be engaging in such wrongful behavior in an attempt to hold on to their business when their employees leave them.
4. In order to win such a “tortious interference” case in most states, you would need to establish the four elements: (i) an existing employment (or business) relation, (ii) interference with that employment (or business) relation, (iii) for the sole purpose of harming that employment (or business) relation, and (iv) harm to the relation. As lawyers, we try to make sure that we can establish the necessary “elements” of a case before we start the case. In your facts, it seems clear that (i) you began a new business relation (that is, employment) with your new employer, (ii) your former employer interfered, and (iii) your employment was damaged, that is, you were fired. There is one element I’m not sure about, and it is the most important element in any of these cases: Did your former employer have any good, proper and justifiable reason to do what they did, or did they act simply to hurt you and your new job? That is almost always the “missing element.”
If your former employer can show that they had some reasonable information that (a) while you worked for your former employer, you told their customers to leave with you, or (b) you took with you and used their secret customer lists, or (c) you took with you and used their secret pricing information, then they have a good, proper and justifiable reason to take steps to protect themselves. On the other hand, if they did not have such a good reason, then they can be sued successfully for “tortious interference with business relations.”
Dan, you know the facts here. If you seem to have the four necessary elements of a lawsuit for tortious interference, I suggest you consider consulting with an experienced employment attorney in your area.
If you would like a list of experienced employment attorneys in your area, which seems close to Chicago, simply [click here].
Thanks for writing in. I hope this is helpful. Good luck in your upcoming job search.
P.S.: To obtain 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.]
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