Dennis BeaverNovember 18, 2022 • By Dennis Beaver

“Wanting to learn the ropes from our employer and go out on our own is something that many employees consider,” observes Southern California Business attorney Glen Dickinson.

Dickinson adds, “And if you go about it the right way, a new, exciting and successful chapter can open in your life. That is the beauty of our American system of competition. But you’ve got to be aware of what not to do.”

And that’s our focus in today’s story – leaving an employer, going out on your own, and the consequences of doing it all wrong.

I asked Dickinson to list and explain the things that can result in a lawsuit. So, if you or someone you know is considering leaving your current employer and setting up your own shop, his advice will reduce the chances of winding up on the wrong side of a lawsuit.

(1) Be Sneaky! Before informing your employer that you are leaving, tell your customers and ask them to give you their next order because, “”I’ll give you a much better price.”

Employees owe a duty of loyalty to their employer, so if you are sneaky and customers follow you now, you’ve got a legal problem as this is not only a breach of that duty, but can be seen as theft.

However, you can leave and not be sneaky by respecting the correct sequence of who you tell, beginning with your employer. Then, you can tell customers and fellow employees.

There is no particular order to follow, but in your business life, you’ve got to start with the employer.

(2) Aggressively go after and target customers of your former employer, solicit their business, and think of them as “your” customers rather than of your former employer.

This is false reasoning as the customer isn’t yours, rather, has a legal relationship with your former employer.

The rule in many states is that you are free to send an announcement of your new employment but you cannot send a solicitation. An announcement is bare bones – as of (date) this is my new contact information. However, a solicitation is anything that invites placing an order.

However, if your new employer has a pre-existing mailing list that is independent of any information they acquired from you, they can send out a solicitation to anyone on their data base, as well as an announcement that you are now working for them. If the customer list happens to include customers of your former employer, that’s ok.

(3) Take stuff with you when you leave! “The empty pockets rule.”

You want to empty out everything you obtained from your former employer, whether it is physical paper, emails, contacts on your phone, files or folders on your computer or laptop. You need to sterilize yourself of any information you have received.

You must purge your employer’s information on your own phone. You must be sure that you do not carry information that belongs to the former employer with you.

(4) Look Suspicions – Not Transparent.

One of the great drivers of litigation is the unknown. If your former employer suspects that you are up to no good – doing unlawful things – and they can’t find out what you are really doing, then they are more likely to file a lawsuit because they are suspicious.

So, be transparent: If you get a demand letter, or a cease and desist letter, it gives you the opportunity to respond in a professional, thorough and transparent way. This is where hiring a lawyer can be extremely important.

When you get one of these nasty grams from a former employer and you hire a lawyer to respond, it sends two very clear messages: First, “I am taking this seriously.” Second, it tells them you have informed yourself on the requirements of the law.

This is a specialty area of the law with its own unique features and highly particular rules.

So a general business attorney is not the best person to speak to. You need a litigator experienced in trade secrets and intellectual property.

Getting a letter from lawyer who knows what they are talking about, says that the former employee is getting good advice.

An Ounce of Prevention

Dickinson concluded our interview by recommending something that can be tremendously valuable if problems arise, and that is “Before leaving, meeting with a business lawyer familiar with these areas of the law and walking through the does and don’ts.

“It’s not guaranteed to keep you out of a lawsuit, but it makes one more defensible, as you can say, ‘I sought legal counsel, I tried to do it the right way.’ These lawsuits tend to end quickly on reasonable terms.”

After 30 years as a litigator, Dickinson’s focus, “Is to keep people out of court, and I often tell clients: ‘The secret of happiness is not winning lawsuits! The secret of happiness is staying out of lawsuits!’”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.