Legal Question in Business Law in California
I'm a project developer in the commercial solar industry. I have recently been part of a mass company layoff. I had a salary plus a draw against commission. When they let me go I had about $35,000 worth of draw that was not paid back from my commission yet. Since the let me go can they come after the money?
Also, I was working on a few projects at the time that I was employed and I'm continuing to pursue closing those projects. I'm working as a consultant for another competing company. I did not have any Letters of Intent or contracts signed at the time that I was employed. Are there legal ramifications that can come up from my old company if I close the business and give it to my new company?
2 Answers from Attorneys
As to your first question, I'd say that many companies have rather detailed and complex agreements with their commissioned employees regarding their payment and the handling of draws against commission.......you should first review any contracts you had with your old employer, looking for anything that states a policy, or constitutes a contractual agreement, on this topic. In general, I'd think the answer would be "yes," the employer can come after you for advances, but only to the extent that the advances exceeded the company's liability to you for earned but unpaid commissions. If the former employer is in bankruptcy, you might be able to ascertain the trustee's intentions by reviewing the asset list filed with the vourt.
As to any knowledge you take from your old job and apply at a new job, there are two somewhat conflicting legal principles: #1, California law encourages complete mobility of employment, see, e.g., Business and Professions Code section 16600; but #2, recognizes an employer's property rights in "trade secrets" and authorizes them to go after ex-employees and others who "misappropriate" trade secrets to which they've had access, whether permitted or unpermitted access. See Civil Code sections 3426 through 3426.11, California's version of the Uniform Trade Secrets Act.
Finally, I'm not sure what you mean by "close the business" and give it to my new company.
You'd better get some solid and specific legal advice quick.
As to the draw, they probably can not 'go after you' for that. But, as to the wildly 'unfair competition' you are doing, it could get you sued.
If serious about consulting for an education on what you can and can not do, feel free to contact me.
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