Legal Question in Employment Law in California
Soliciting former employer's clients
I worked for a California registered investment advisory firm as an equity analyst. I have left the employ of said firm and will continue to manage my own investment advisory business. Here are the facts:
1) There is NO non-compete, non-solicit, or employment agreement of any kind in place. There is not even any kind of verbal agreement that I will not compete or solicit clients.
2) I was paid as an independent contractor, though I was a ''regular'' employee of the firm.
3) I developed strong relationships with many of my former firm's clients. I met all of these clients and gained access to their contact information while working for my former employer (though their contact information is readily available via Internet searches).
4) My former firm made no effort whatsoever to protect client lists as trade secrets.
5) The clients of my former firm receive very standard investment management services (i.e., there is nothing unique about the needs of these clients).
Is there anything to prohibit my soliciting these clients now that I have left my former firm? What chances would my former employer have in obtaining a restraining order in a court of law?
Thank you in advance.
2 Answers from Attorneys
Re: Soliciting former employer's clients
Regardless of whether you signed a non-competition (which is unenforceable in California) or non-solicitation agreement, you cannot use information which is truly a trade secret you obtained from your former employer against them. To do so would violate the Uniform Trade Secrets Act.
However, based upon the information you provided, it does not appear as though you obtained trade secrets if the critical information is accessible to anyone and the employer made no effort to keep the information a secret.
The burden is upon the employer to convince a court that you are using true trade secrets against them. This may be difficult to do.
Re: Soliciting former employer's clients
'Anyone can sue anyone else, for anything'. That being said, to win they would have to show unfair competition that violates the law or a contractual term. If you fairly and 'professionally' solicit business from lists that happen to also have that company's clients, not a big problem. If you xerox the client list and target market to only them, problem. You should consult with competent counsel for advice on the content and scope of your marketing and sales efforts towards the old clients. It will be very cost effective in the long run. Contact me if interested.
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