Legal Question in Business Law in California

Without access to all the details of your sweat equity arrangement and without knowing whether the sublease goes beyond a sublease in its terms, I can't be entirely sure. However, in most cases, a sublease of business property wouldn't cause a termination of a pre-existing sweat equity agreement. Obviously, however, there could be an impact -- positive or negative -- on the ultimate market value of X% of equity from such a sublease (just as there could be an impact on the value of equity from any other major business event or transaction). As to starting your own business, unless there was some provision in your sweat-equity agreement that you had to stay with the company for some definite period in order for your sweat equity to vest (i.e., become yours), you shouldn't lose what you've already earned. However, if you aren't around to observe and participate in the business, funny things can happen. As far as the legality of going into competition with your previous employer, California favors competition and it is generally legal to jump ship and start your own business, but don't steal any of your employer's trade secrets.

There is absolutely no way anyone can answer your question beyond "it depends." So while I generally agree with my colleague here, I think it would be grossly premature to opine without the benefit of reviewing the agreement you have along with all the facts and circumstances.

Regards to using the "brand" in a new endeavor, it will depend on who has a prior right to the trademark(s) at issue.

I strongly suggest that you consult a lawyer in private before you commit to anything here. If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Kind regards,

Frank

www.LanternLegal.com

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DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.