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  1. #1
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    Oct 2014
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    Default Re: Employer Interfering with My Business

    Quote Quoting jk
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    I know a business owner in my area that paid over $1,000,000 to his former employer for trying to sign his former employers customers. It isn't quite as simple as he can sign the customers if there was no non-compete.
    In order to be liable to the former employer for soliciting the former employer's customers the employee must have entered into some agreement that prevented him from doing that. It is often not a true non compete agreement as those tend to be disfavored in the law. Instead, those often done through more limited restrictions on contacting customers for some period time, trade secret agreements in which the customer list is included as a trade secret, or other agreements that restrict the right of the employee to contact former customers, take customers lists, etc., but otherwise do not prohibit the employee from competing. But whatever the name of the agreement, there had to be some agreement that prohibited the employee from soliciting the customers. There is no law that prohbits a former employee from soliciting his former employer’s customers after all. That’s the very reason why employers seek these kinds of agreements in the first place. Thus, it's a pretty good bet that the company in your area that obtained that million dollar payment had an agreement of some sort with the employee that the employee violated.

  2. #2
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    Jan 2006
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    Default Re: Employer Interfering with My Business

    There are tortious interference matters that may be applicable (which you did not touch on at all) as well as unlawful appropriation of business information (such as taking a former enployers customer list which is the only thing the guy I know was found liable for). There was no non-compete agreement or any other agreement in place. It was based solely on him taking the clientele list from his employer. He even argued he took no "list" but the customers he had contacted were customers of his former employer who he knew of his employment with the former employer, and that was the kicker. So, in other words; unlawfully appropriated business information.

  3. #3
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    Default Re: Employer Interfering with My Business

    And I know of a case where BOTH business owners were barred from talking to each other's clients. So what?

    In the absence of any non-compete agreement, both business owners are free to compete for the same clients until or unless a court says otherwise.

  4. #4
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    Default Re: Former Employer is Telling Employee's Customers that He is Violating a Non-Compet

    Quote Quoting cbg
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    If you did not have any kind of non-compete, you are free to try to sign his customers. However, he is also free to try to protect his business and keep them. If he tells them you have a non-compete, you tell them that you don't.
    He is not free to lie to a competitor's clients in order to try to take away the competitor's business -- that can rise to the level of tortious interference with contract.
    Quote Quoting Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74 (Tex. 2000).
    We have identified the elements of tortious interference with an existing contract as: (1) an existing contract subject to interference, (2) a willful and intentional act of interference with the contract, (3) that proximately caused the plaintiff's injury, and (4) caused actual damages or loss.
    Quote Quoting cbg
    Any attempt for you to use the law to stop him from doing what he's doing, is just as likely to end up requiring that you stop doing what you're doing.
    Absent additional facts, I'm not willing to join that generalization.
    Quote Quoting Taxing Matters
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    In order to be liable to the former employer for soliciting the former employer's customers the employee must have entered into some agreement that prevented him from doing that.
    You don't need a written contract to protect trade secrets -- an employee who steals trade secrets can be successfully sued even if he has not signed anything with the former employer.
    Quote Quoting Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 463 (Tex.App.-Austin 2004)
    Misappropriation of trade secrets is a common-law tort cause of action. The elements of misappropriation are: (1) existence of a trade secret; (2) breach of a confidential relationship or improper discovery of a trade secret; (3) use of the trade secret; and (4) damages.
    However, in the absence of an agreement, the employer must establish that the customer list was a trade secret,
    Quote Quoting Numed, Inc. v. McNutt, 724 S.W.2d 432 (Tex. App.-Fort Worth 1987, no writ)
    To be accorded the court's protection, proprietary information must be more than merely of a kind and character encompassed by the definition.... It must be information that is not publicly available or readily ascertainable by independent investigation.
    For an obvious example of a customer list that is not a trade secret, take a look at a typical building supply company's website and you will often find a search feature for its distributors and retailers.

    It's not necessary that a misappropriated customer list be an actual document or electronic file, but it must actually qualify as a trade secret before a former employer can successfully sue over its misappropriation.

    As the former employer under discussion is making false claims of having a non-compete, not having his lawyer send a cease-and-desist letter based upon misappropriation of trade secrets, there's a good chance that the customer list is not a trade secret. (It could also be that the former employer doesn't understand his actual legal rights.)

  5. #5
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    Oct 2014
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    Default Re: Former Employer is Telling Employee's Customers that He is Violating a Non-Compet

    Quote Quoting Mr. Knowitall
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    You don't need a written contract to protect trade secrets -- an employee who steals trade secrets can be successfully sued even if he has not signed anything with the former employer.
    Well, I agree that it need not necessarily be written. The Texas case you cited states as one element of the claim that there must be a “breach of a confidential relationship or improper discovery of the trade secret.” A federal appeals court interpreting Texas trade secret law stated: “The owner of the secret must do something to protect himself. He will lose his secret by its disclosure unless it is done in some manner by which he creates a duty and places it on the other party not to further disclose or use it in violation of that duty.” Taco Cabana International, Inc. v. Two Pesos Inc., 932 F.2d 1113 (5th Cir. 1991). So, to be liable for misappropriation of a trade secret where the employer has shared with the employee his customer list the owner must have taken steps when disclosing that alleged trade secret to protect it, i.e. place a duty on the employee not to disclose it. That would require an agreement (though not necessarily written) between the two that the employee will not disclose the trade secret. That agreement would be the basis for the confidential relationship required for the tort. Simply being an employee does not a confidential relationship make. An employer cannot simply claim after the employee is dismissed that the customer list is now a trade secret that the employee is not allowed to use or disclose if the employer took no action when he disclosed the information to the employee to ensure that the employee had no duty to protect it.

  6. #6
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    Default Re: Former Employer is Telling Employee's Customers that He is Violating a Non-Compet

    Quote Quoting Taxing Matters
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    The Texas case you cited states as one element of the claim that there must be a “breach of a confidential relationship or improper discovery of the trade secret.”
    As in, an employment relationship.
    Quote Quoting T-N-T Motorsports v. Hennessey Motorsports, 965 S.W.2d 18 (Tex.App.-Houston (1st Dist.) 1998, pet. dism'd).
    Certain duties, apart from any written contract, arise upon the formation of an employment relationship. Miller Paper Co. v. Roberts Paper Co., 901 S.W.2d 593, 600 (Tex.App.-Amarillo 1995, no writ). One of those duties forbids an employee from using confidential or proprietary information acquired during the relationship in a manner adverse to the employer. Id. This obligation survives termination of employment. Id. Although this duty does not bar use of general knowledge, skill, and experience, it prevents the former employee's use of confidential information or trade secrets acquired during the course of employment.
    As you can see, all that is required to create a duty on the part of the employee is the employment relationship.
    Quote Quoting Taxing Matters
    A federal appeals court interpreting Texas trade secret law stated: “The owner of the secret must do something to protect himself. He will lose his secret by its disclosure unless it is done in some manner by which he creates a duty and places it on the other party not to further disclose or use it in violation of that duty.”
    If an employer maintains a confidential customer list, available only to employees, then it is doing something to protect itself -- it is maintaining its list and is sharing it only with people with whom it has a confidential relationship. You don't have to additionally tell employees, "You're not allowed to steal our trade secrets" for them to remain trade secrets or to have a cause of action against former employees who misappropriate trade secrets.

  7. #7
    Join Date
    Jul 2015
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    8

    Default Re: Former Employer is Telling Employee's Customers that He is Violating a Non-Compet

    I do not think the customers I contacted after leaving my employer is confidential information. It was openly disclosed to potential customers as reference and even published on written publications even when I was an employee.

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