CUSTOMER LISTS AND NON-COMPETE AGREEMENTS
I was on a corporate law firm website today. The firm represents employers and companies in employment litigation.
They advertise that the first step when an employee leaves and there is the threat they will breach their non-compete agreement, is to “write a firm cease and desist letter” “demanding the return of all company information including customer lists.”
Yes employees, this is exactly what your ex-employer Virginia Company Inc., LLC will do when you leave. They will attempt to scare you into submission.
Then they will ask customers if you have tried to solicit their business. They will also ask when you started soliciting business.
If you quit on Nov. 23, 2009, but sent an email to customers on Nov. 17, 2009 telling them about your great new business starting Nov. 24, 2009, you may be facing a multi-count lawsuit.
Employer will send a cease and desist letter, and if you don’t fall in line and close your new business, they will file suit alleging the following:
(1) Breach of contract – you competed after you signed an agreement stating you wouldn’t;
(2) Trade Secret Act – you used confidential information, ie, customer lists, without permission of the company which deems such information to be trade secret and proprietary.
(3) Breach of fiduciary duty – you attempted to divert business from Virginia Company Inc., LLC while still an employee.
(4) Tortious interference of contract – you attempted to have a third party break their contract with Virginia Company Inc., LLC, and send the business somewhere else.
Yikes. Now what. How should you respond to the Cease and Desist letter?
Are customer lists really proprietary and protected under Virginia Trade Secret Act?
Could Virginia Company Inc. LLC really sue you for 4 business torts when you have only been trying to get business for 1 week?
They have attorneys on their side advising what to do, say and how to proceed – you should too.