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  1. #1
    Join Date
    Jan 2011
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    4

    Default Competing While Still Employed

    My question involves business law in the state of: California

    What is the risk involved with launching a product that competes with my current employer's products? I'm not using any of the company's property (phones, emails, computer). However, this sounds dumb but I am taking some time during the work day to go and see vendor's, take phone calls, answer emails on my blackberry to help get my product going.

    Should I quit immediately?

  2. #2
    Join Date
    Sep 2005
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    Default Re: Competing While Still Employed

    The risk would be that they fire you and, if they believe you have misappropriated their intellectual property, sue you.

  3. #3
    Join Date
    Jan 2011
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    4

    Default Business Start Up While Still Employed

    My question involves business law in the state of: California

    What is the risk involved with launching a product that competes with my current employer's product portfolio? I'm not using any of the company's property (phones, emails, computer). However, this sounds dumb, but I am taking some time during the work day to go and see vendor's, take phone calls, answer emails on my blackberry to help get my product going.

    I was planning on quitting once I got an order since I can't afford not to work. But I'm concerned about the legal ramifications. Are there any?

    Should I quit to avoid this conflict or is what I'm doing legally ok?

  4. #4
    Join Date
    Dec 2007
    Posts
    2,360

    Default Re: Business Start Up While Still Employed

    I'd fire you immediately if I discovered you were working on your own business on MY time. And you certainly won't get unemployment if you are fired for that, especially since your business is intended to compete with your current employer.

    If you didn't sign a noncompete or conflict of interest agreement, you're safer, but you're STILL running the risk that the employer will sue you for restraint of trade.

  5. #5
    Join Date
    Jan 2011
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    4

    Default Re: Business Start Up While Still Employed

    Yes, I'd agree with you. I'd certainly fire an employee if they were using company time to benefit themselves. Being in California I was under the impression that non compete contracts were illegal. So technically, what could I get sued for? There's got to be more risk that just restraint of trade, right?

  6. #6
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    Sep 2005
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    Default Re: Business Start Up While Still Employed

    In California, a noncompete clause in a contract of employment that, once your employment ends, restricts your ability to work for another employer is not enforceable. (An out-of-state noncompete clause may be enforceable, depending upon the full factual context.) However, confidentiality clauses are enforceable, and it is perfectly permissible for your employer to fire you for competing with it or for working for another company during your term of employment. Again, if your employer is left with the impression that you have misappropriated their intellectual property, they may sue you. (Consider, e.g., the lawsuit Mattel prosecuted against the designer of Bratz dolls, which he claimed to have developed on his own time during his employment with Mattel before taking the idea to a rival firm.)

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