Legal Question in Business Law in California

Contacts of previous employment

I am starting a new importing business. A foreign supplier I worked with on my previous employment contacted me and wanted me to sell his products in US. These products are general industrial/comsumer products, can be supplied from many sources, but I know this supplier well and prefer to do business with him. Do I violate law by conducting business with this vendor and selling similar products of my previous employment to new customers? I have no employee confidentiality agreement with my previous employer, but my previous employer sent me a letter demanding not to work with his vendor.


Asked on 3/28/05, 5:22 pm

5 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

Re: Contacts of previous employment

without a non-compete agreement, you are free to 'fairly' compete. 'Unfairly' competing would risk lawsuit, meaning steatling all the old company's customers, target marketing to them, etc. You shouldn't ignore the letter, but get an attorney to respond properly so they don't continue to harass you, thinking they are scaring you. Contact me if interested.

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Answered on 3/28/05, 5:31 pm
Daniel King Law Offices of Daniel King

Re: Contacts of previous employment

hi. thank you for posting your question. it is not a question which presents a "yes" or "no" answer. if the information that you would use, in the absence of a non-compete agreement, would otherwise be available to you, (or anyone else in the same area of business), it would generally not be considered "trade secret" or an act of unfair competition under either common law or the Business and Professions Code.

you should run your factual situation by an attorney in more detail. please feel free to phone if you like. i represent businesses in all areas of the state. good luck!

daniel king

818 587-9299

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Answered on 3/29/05, 10:03 pm
Michael Olden Law Offices of Michael A. Olden

Re: Contacts of previous employment

I would need it anymore that properly advised in regard to your situation. A supply your brief statement while you are not "home free" if you do things in a proper procedure you should be free of any liability under unfair competition regulations. There are numerous, both written an unwritten rules of growth in which your fax information deals with make sure that you are free, for as free as possible, from liability from their former employer. I live to see them at first finding an attorney who has experience in this area and properly advise you.I have been practicing law in the San Francisco Bay area for approximately 35 years and expert in the area in the category in which your question is placed. I feel I can help you in this matter and if you wish to consult with me please contact me at 925-945- 6000.

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Answered on 3/28/05, 6:36 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Contacts of previous employment

Presence or absence of a non-compete agreement has very little impact.....if there were an agreement, it would be pretty much unenforceable with respect to what you're going to do; on the other hand, absence of a non-compete agreement doesn't give you a right to misappropriate trade secrets of a previous employer.

If this all seems confusing, let me try to explain. Non-compete clauses can be used in sale-of-business agreements; if for example, I sell you my shoe store, you can oblige me not to open a competing shoe store within a reasonable radius for a reasonable period of time. If, however, you worked for me as a shoe salesman, I cannot no-way, no-how, forbid you to work for my competitor down the block as a shoe salesman.

On the other hand, there are two things an ex-employee cannot do. He/she cannot misappropriate trade secrets; and he/she cannot interfere with the prior employer's contracts and business relationships.

For example, my ex-salesman cannot take a computerized list of patrons of my shoe store and use the diskette to pring address labels for his opening announcement. My customer list is entitled to protection as a trade secret, as is information about Mrs. Jones' shoe preferences and the like. Information available in phone books, well-known trade journals, etc. does not count as trade secret, however.

An example of unfair interference with contracts would be if my former shoe salesman knew I had an exclusive contract to sell Pappagallo shoes in my county, but, knowing this, approached Pappagallo and offered to sell their shoes for a lower markup, encouraging them to breach their existing contract with me.

I hope you see how these examples might apply to your situation. I'd guess that you're free to use this particular supplier UNLESS (a) you wouldn't know of its existence and usefulness to you except for not-widely-known information your previous employer had developed (or you developed while being paid by him) or (b) the supplier is under contract with the old employer and your doing business with the supplier tends to induce a breach of that contract, and you were aware of the contract or should have been aware of it.

Any further questions---call or write me.

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Answered on 3/28/05, 7:30 pm
Daniel Harrison Berger Harrison, APC

Re: Contacts of previous employment

Did your previous employer state any reasons as to why you should stop?

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Answered on 3/31/05, 1:32 pm


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