Legal Question in Business Law in California

Ethics of aquiring business leads

If someone is considering leaving a design firm and a customer walks walks in off the street and asks for a quote on some work, does the employee have a legal obligation to submit the lead to their employer? Can the employer sue the former employee if they contact the lead after they leave the firm? What if the exemployee does work for the customer--is that illegal?


Asked on 1/22/02, 3:34 pm

2 Answers from Attorneys

Re: Ethics of aquiring business leads

No, it is NOT permissible for the employee to take the lead obtained while working as an employee. This would be considered a breach of the employee's duty of loyalty.

If the employee leaves thereafter and takes the lead with them and/or uses customer lists, takes other employees, other customers the former employee can be liable for unfair competition/unfair business practices. It does NOT matter that YOU generated the lead for your employer. If you did it while working as an employee, the contact is considered as owned by the employer and you do not have the right to take the employer's contact.

Make sure to be very careful of what information you take with you and how it is used or you can end up in a heap of trouble.

If you would like to discuss this I can be reached at 805-494-6557.

J. Caleb Donner

LEGAL WARRIORS (R)

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Answered on 1/22/02, 4:14 pm
Ken Koenen Koenen & Tokunaga, P.C.

Re: Ethics of aquiring business leads

There is a very simple rule in life, and usually in the law. If you ever ask the question, "Is doing such and such ethical?" the answer is usually "NO!"

That is the case here ... it is not ethical and can get you in a lot of trouble.

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Answered on 1/22/02, 8:18 pm


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