Legal Question in Business Law in California
Is it legal for a person in the sales department of a distibution company to set up his own retail business and sell the items to himself, thereby giving himself superlow pricing, first picks at specials, and undercutting the competition?
Wouldn't it be a conflict of interest for the company to have a salesman that is also a customer?
2 Answers from Attorneys
Yes, and if you are the employer you could/should fire him.
It's a conflict of interest, but one that the employer can waive if it wants to........possibly the employer has even encouraged this arrangement for some reason.
Whether it's illegal is uncertain. California has some very broad and general laws against unfair competition and unfair business practices, see for example Business & Professions Code section 17200, but this law is usually used against false advertising, discrimination among customers, bait-and-switch sales practices, etc. and this or similar laws might outlaw this practice, but a more thorough analysis would be necessary to be sure.
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