Legal Question in Business Law in California
Confidentiality AGREEMENTS
Recently resigned from company. Was very unhappy with work enviornment and broken promises from employer. Gave notice, ask if i could keep some accounts and receive commission as indepentdent contractor. Company said yes. Company drafted letter that included several accounts that i was to not sell to . Others assigned to me ok to sell. Only a few on list were mine. Many other accounts left off list ok for me to sell. Due to many other reasons did not sign. Now im being threatened with legal action for confidential information disclousure.Most of my customers i found on my on with out help from former company. After hire date,signed a vague confidentiality agreement with a company the company i went to work for was affliated with.I asked themfor a copy. They would not give it to me. Years after the signing, the affilation ended.The company i just left claims the agreement is valid even though their name is not on it. The customers are common knowledge in the industry. I knew of several before i worked there. Many of these customers are asking me to sell them. I do not need any info from former company to sell them . I am building new files from public domain information. What should i do? Thanks
4 Answers from Attorneys
Re: Confidentiality AGREEMENTS
You must retain an attorney...who will represent your interest. Without reviewing the Confidentiality Agreement and terms and conditiions in it.....hard to give you any other solid advice!!!
Re: Confidentiality AGREEMENTS
My colleague is correct. You need to have an attorney review the agreements you mention. Also, it is important for your legal counsel to know what industry/business you are in, where you are geographically located and where you are selling (geographically), as well as what sales techniques and tactics you are using. Then your attorney can help you formulate a plan to avoid problems in the future, as well as deal with the current situation. Contact local counsel right away.
Re: Confidentiality AGREEMENTS
You have several issues involved only one of which is the confidentiality agreement, as well as whether your immediately former employer has any rights in relation to that confidentiality agreement.
There are also issues of what is called "unfair competition" that your former employer is sure to bring up of which you should be aware. The former employer is likely to contend that the customers that you are now servicing are their customers and that you are violating california's fair competition law by contacting them and benefiting from your former employer's relationship with them.
I would definitely speak with an attorney in detail about this matter as well as reviewing any documentation including the documents that made up the negotiations after employment.
J. Caleb Donner
DONNER & DONNER
LEGAL WARRIORS (R)
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Re: Confidentiality AGREEMENTS
Salespersons changing employment are frequently the target of post-departure threats. Some of these develop into lawsuits, some go nowhere beyond the initial threatening letter, and some are settled and/or dropped at intermediate stages.
If the threats and accusations are addressed to you by the former employer's attorney, you really must consult an attorney and have her or him respond quickly, in appropriate legalese, if for no other reason than to show that you will defend your rights. If the accusations come from the employer, use of an attorney is recommended but optional.
In these situations, two sometimes-conflicting legal principles come into play. The first is that everyone has a right to change jobs and to pursue his or her occupation. The second is that trade secrets including non-public information about customers and their preferences and requirements are protected against misappropriation.
A large body of case law gives lawyers, judges, employers and employees some guidance on what is permissible and what is not. Unfortunately, the rules of law are almost as numerous as the cases from which they arose, and do not fit all new situations neatly, at least at first glance.
In addition, there are many rules and principles governing restrictive covenants and non-disclosure clauses in employment agreements. Many such clauses are not enforceable, or have only limited enforceability.
It shouldn't cost you much to show the documents to an employment-law specialist, get an opinion, and have a letter sent to the former employer. This is the recommended course of action for you.
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