Topic: Interference with Prospective Business Advantage
Introduction: Interference with another’s business is a very serious accusation
with big dollar damages. A small infringement on one’s business
or potential business can be millions of dollars. The following case explains
a typical example.
Question: Dear Mr. Cheng: I am the owner of a large factory in Riverside. One of
my top employees left my company because he was going to be paid a better
salary somewhere else. The problem is that the employee also took with
him many of our clients and secrets of our company. We were greatly injured
by his actions and are looking to sue. What can we do? Alex – Riverside
Answer: Dear Alex, employees that are leave is a very serious issue. Many times,
an employee that leaves with customer information and company information
can collapse the company they leave. I will delineate the requirements
needed to file a lawsuit against your ex-employee. To prevail in a lawsuit
regarding the above facts you need to show: 1) An existing or prospective
business relationship. 2) a duty of care between your ex-employee and
your company. 3) Wrongful Interference and 4) Damages to the business.
To show a duty of care you need to show a special relationship. I have
recommended in my previous articles and I do so again here that you need
to have a contract that delineates your relationship. In addition, your
contract should state that your relationship will encompass trade secrets.
Having this contract creates the special relationship and the duty of
care needed to actions like what happened with your employee. If you have
the contract that delineates the relationship showing wrongful interference
is much easier. One exception to wrongful interference; mere competition
is not interference. As such, not only do you need to show a special relationship
but you need to show that the interference was not just business competition.
If you are able to show all the points stated above you will damages which
include lost profits. In addition, before the case is over you can also
get injunctive relief. Injunctive relief allows the judge early in the
case to prevent the person from disclosing your secrets to his new employer.
Alex, I wish you the best, good luck!