Legal Question in Business Law in California

Re: ex employee's right to solicit company's clients on his own

An ex-employee may solicit his former employer's clients provided that in doing so he does not do so unfairly. Use of confidential information of the former employer is a common example of an unfair practice.

Therefore, the answer depends upon what information the ex-employee has about the clients and how that information was obtained. If he is working from thick files xerocopied from the former employer's files at midnight on his last day of employment, he is clearly using proprietary information unfairly. At the other extreme, if the ex-employee merely opens the yellow pages and gets the name and number of a business that happens to be a client of the former employer, that's clearly fair and lawful.

In between lies a vast gray area. Law and conscience should be your friend's guides. The law favors competition and allowing folks to earn a living plying their trades. The law disfavors taking confidential or even semi-confidential information from an ex-employer.

The friend should develop a relationship with a business attorney who can assist him in defining what's fair and what's not based upon the case law in this area, as well as providing legal assistance in the many other areas of setting up and running a new business.

Re: ex employee's right to solicit company's clients on his own

Any clients that the ex-employee got while working for the company are the property of the company. He worked for the company and he was therefore an agent for the company. This means that when he leaves he cannot take the clients with him unless it is in the terms of his contract. The clients that he brought with him could be considered to be his or the companys. If he contacts the clients he considers to be his the company may sue him and win. He might want to take this into consideration before contacting them.

Good luck.

John Hayes, Esq.