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  1. #1
    Join Date
    Aug 2007
    Posts
    4

    Default Threatened Lawsuit After Taking A Job With Former Employer's Client

    Hi,
    I am also in the same situation. But I am in California.
    I resigned from my old employer about 2weeks ago and when I was working for old employer end client was XYZ. XYZ Client contacted me directly and asked me if I can work on their project for one more year. I accepted it.
    Now I am working for New company and new company gets bill paid by prefered vendor "ABC" of client XYZ.
    XYZ pays to prefered vendor ABC and ABC pays to my new employer.

    My old employer called me and told me he will sue me for 50,000$ bcos I breached his contract. Its just 2 weeks i am working for their client, Can he realy sue me for 50,000$ ?

    Here is the non solitation agreemenet i have signed with my old employer.

    Prohibition on Solicitation of Clients –
    A. You acknowledge that, because of the nature of your work for the Company, your solicitation or serving of certain Company clients after the termination of your employment inevitably would involve the unauthorized use or disclosure of Confidential Information, and impair the protectible relationships and goodwill of the Company. Accordingly, you agree that, for 1 (One) year following your departure form the Company for any reason, you will not directly or indirectly solicit, accept as a client or perform services of any type that the Company can render (“Services”), or assist others to do the same, for any person or entity: (1) for which you provided services as an employee of the Company or that received the benefits such services during 1 (One) year prior to your departure; (2) that was a client in the metropolitan area of your resident office during 1 (One) year prior to your departure; or (3) that becomes a client of the Company during the year following your departure and for which you participated in a proposal to provide services. It shall not be relevant that a client desires or prefers that someone other than the Company render services or that the client is already served by you or any person or entity with which you become associated. This is not applicable for permanent Employees and is only applicable to part time, temporary, individual consulting or by forming a partnership or corporation.

    B. Remedies – If you breach this restriction on solicitation of clients, in addition to any other legal and equitable remedies the Company may have, you agree to pay to the Company an amount equal to 30% of the gross fees paid for services rendered in violation of this provision. Such percentage shall be paid with respect to all such services rendered during a period of two years from the date such person or entity is accepted as client. You must make the payment to the Company within 30 days after such payment of fees has been made by the client.

  2. #2
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: Threatened Lawsuit After Taking A Job With Former Employer's Client

    You will need to get yourself an attorney & also have them review the agreement.

    Ca. re non-compete agreements: (many times unenforceable)
    Ca. - Restrictive convenants that prohibit an individual from pursuing an "entire business, trade, or profession..." are invalid. The general rule in Ca. is that noncompetes are unenforceable. State law has narrowly drawn exceptions for noncompetes made pursuant to a sale of a business, sale of a shareholder's stock, or dissolution of a partnership. Otherwise, agreements that limit an employee's ability to obtain work will be enforced only when the employer can show a strong interest that needs to be protected. Ca. courts generally don't give force to geographical & temporal restrictions, but the courts have consistently upheld an employee's convenant not to solicit the former employer's customers for terms from one to five years after employment ends. Ca. courts won't reform a noncompete that's void & illegal even when the agree. contains a savings clause expressly providing that the parties agree that the court may narrow the agree. as written if it's found to be unfair or commercially unreasonable.
    This is how courts seem to handle noncompetes in Ca. They are not always completely unenforceable or banned.

  3. #3
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Threatened Lawsuit After Taking A Job With Former Employer's Client

    However, California courts will enforce contractual provisions to protect trade secrets and client lists, and if this is an interstate issue (e.g., prior employment and noncompete were signed in New York, with the work performed in that state) it may be possible for the former employer to take legal action in that other state then seek enforcement of any judgment or injunction in California.

    It is very sensible to take the suggestion of having the actual contract(s) reviewed by a lawyer.

  4. #4
    Join Date
    Aug 2007
    Posts
    4

    Default Re: Threatened Lawsuit After Taking A Job With Former Employer's Client

    Hi Aaron and Betty,
    Thanks for your inputs.
    I have signed contract only in California.
    I am computer programmer. The programs I develop are owned by client. They were not belongs to my old employer. Old employer is just a consulting company.
    If I stop working for client immidiately can he still sue for for 50,000 ?
    Remedies section says that I have to pay 30% of Gross fees paid by client which will be less that 4000$ for these two weeks.

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