Legal Question in Business Law in California

Re: trade secret? need help.

Can he sue you? Of course - anybody can sue anybody for anything.

Can he win? Depends on all the facts, evidence, defenses, etc.

The sooner you hire counsel to deal with this, the better your chances of avoiding huge legal bills and huge judgment. Feel free to contact me if the case will be in SoCal courts.

Re: trade secret? need help.

Hello.

As you probably know, anyone can sue anyone. However, in this case it sounds like your former employer wouldn't be wise to do it. First of all, even if you had a non-compete agreement it wouldn't prevent you from running your own business as most of such agreements are found to be invalid and unenforceable by CA courts anyway. Thus, unless you violate a trade secret or a confidentiality agreement that you entered into while being employed there (looking into your contractor agreement should answer this question). You shouldn't be too worried. Of course, if he sues you, you will have to hire an attorney to defend you but... I can't see how he would win.

Thanks,

Re: trade secret? need help.

The former employer has no realistic chance to win a dime of damages from you based upon the facts you've related. There is, of course, an outside chance that he would pay the $300 or so filing fee to commence a suit against you (and probably more than an couple grand as a retainer to his attorney) to try to shake you down for an out-of-court settlement). In my experience, there are about ten threats or cease-and-desist letters written for every "unfair competition" lawsuit actually filed.

The gist of such suits is often misappropriation of trade secrets, somewhat less often breach of a covenant not to compete or tortious interference with contract and/or prospective business advantage, and rarely, some other form of unfair competition. Again, based on hearing from you only, and then only an abbreviated set of facts, I'd guess your chances of being sued are one in three or less, and your chances of winning if you stick it out and don't cave in to an early settlement demand are 95% plus.

On the other hand, I've not heard his side of the story.

The key law is perhaps Business and Professions Code section 16600, stating that the law and policy of California is that contracts attempting to restrain anyone from engaging in any lawful business, trade or occupation are void as contrary to public policy. Another important law (carefully balanced by the courts against B&P 16600) is the Uniform Trade Secrets Act, making it unlawful to misappropriate someone's trade secrets such as secret recipes or carefully-developed customer lists (Civil Code 3426 to 3426.11). A way of doing business probably isn't a protected trade secret under the Act.