Legal Question in Business Law in California
Opened a gold panning business with a partner this year. Business partner formerly worked for a gold panning business teaching gold panning lessons. Plan on expanding business to another location with a third party. We received a letter, as well as our future business partner (third party) stating that we are in violation of a "non-compete" agreement, misappropriation of trade secrets, and our company will be sued and the third party may be sued. Enclosed was a misleading non-compete agreement, with only illegible signatures of other parties (names were not printed), not business partner. This caused third party to believe that somehow my business partner was in fact in violation of a non-compete agreement and frightened out of doing future business because of the threat of a lawsuit. Beside the fact that a non-compete agreement is not valid in the state of California except for a few exceptions which we do not fall under and my business partner never signed one. We also know that the other company threatening to sue us is only speculating that we are using their "trade secrets". We in fact are not using their "trade secrets". They were very vague in the letter, making unfounded allegations stating information, techniques, and trade secrets were being used. They requested that we shut down our business immediately or a lawsuit would be brought toward us and possibly the third party. They are in fact purposely trying to interfere with our business relationship with the third party (third party has a creek and a train running through property which would really kick their butts competetively) us and are harrassing us. Third party was so frightened, they shut down their own website.
Could this possibly be intentional interference with prospective business relations, libel, defamation, slander, fraud, harassment?
3 Answers from Attorneys
It could be many things. Without more facts it is a bit difficult to say. I would be happy to discuss this with all of you.
It certainly sounds like interference with prospective business advantage and possibly defamation, but I would need more facts. It was an interesting trick sending the letter to you, rather than the third party. There is a lot in the narrative before your question that isn't exactly clear. So I cannot say for sure if I think you have grounds to sue, but it certainly sounds worth discussing with an attorney.
A general principle of suing someone is, while you're at it, allege as many theories of recovery and as many causes of action as you can reasonably argue to a judge or jury. You may have some losers, but you only need one winning theory.
It is hard to imagine that there are any trade secrets in the gold-panning industry. Maybe the complaining outfit has discovered the Lost Dutchman mine. Possibly a list of prospective clients could be a trade secret, but it seems that a list of prospects would change weekly.
An aspect of your case worth considering before you launch a legal attack is what kind of relief you're goint to ask for.......can you prove money damages? Civil juries can't award damages like fines, for bad behavior -- you almost always have to plead and prove actual financial harm, and that can be difficult for a start-up business. Alternatively (or additionally), you might ask for a TRO and injunction against continued interference with your business.
Related Questions & Answers
-
I have won a small claims judgment against a defendant in California court. 30 Days... Asked 12/01/09, 11:33 am in United States California Business Law
-
Hi I own one subway store. I took over the store about five months. I have been a... Asked 11/30/09, 5:49 pm in United States California Business Law
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
