Legal Question in Business Law in California

Independent contractor or employee...what are my rights to my client database?

I have built a client based-business for 5 years in a wellness center. I had a verbal disagreement with the owner and she told me not to come back. She contacted my clients and have told them they must now see another therapist. Due to the short notice, I was unable to get my client records. She claims the clients belong to the center and refuses to give the client information to me. Having been paid as an independent contractor and that she issued a 1099 each year, I have always believed the clientel to be my database. Do I have the right to sue her for the database or for its value? And if not, was I actually an employee?

Asked on 10/23/06, 8:23 pm

3 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Independent contractor or employee...what are my rights to my client database?

The ownership of the client data base is heavily fact-dependent; that is to say, there is no particular statute nor any particular body of case law that an attorney can readily cite that finally and positively disposes of the matter.

I can cautiously and tentatively say that if you developed the client information through your own efforts and at your own financial risk, and not as a paid employee whose duty to the employer was to build clientele in exchange for a salary, you are more likely than not entitled to the client list.

I haven't done any research specific to your question, but about 18 - 24 months ago, I did case-law research for a client with a somewhat similar situation.

Some of the facts that might bear on the outcome in court:

(1) Did the clients write checks to you?

(2) Did the owner have primary control over the data base while you were there?

(3) Did the owner play any part in referring or distributing incoming inquiries to you among other 1099ers?

(4) If an earthquake destroyed everyone's records, would the clients be trying to reconnect with you, or with the owner?

(5) If a client brought a lawsuit for some problem such as, let's say, malpractice, would their first thought be to sue you, or the owner?

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Answered on 10/23/06, 10:24 pm

Michael Olden Law Offices of Michael A. Olden

Re: Independent contractor or employee...what are my rights to my client database?

bryan's answer as usual is very good and informative. i have practiced law in contra costa county for over 30 years and i would of course need more facts. what you said as to the 1099 and not a w-2 form without contra facts tips the scales for me. more over her termination so abruptly needs exploring, if this is in retaliation for something then you have additional claims and damages which mount daily. this should hopefully be settlable but not to the point of you going back there and being "employed" there unless you want to. good luck and get an attorney immediaatly to help, advise you and aid in getting rid of this dispute.

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Answered on 10/23/06, 11:41 pm

Re: Independent contractor or employee...what are my rights to my client database?

A written agreement between you (the purported independent contractor) and the "owner" would be ideal, as it might define the terms of your relationship and shed light on ownership of the list.

Without such an agreement, the courts would look at the course of dealing in your relationship, written communications between you two, and other evidence that might provide indicia of ownership.

I would need additional facts to determine how a court might rule.

You may have other potential causes of action against the "owner" of the center, including interference with prospective economic advantage, conversion, breach of contract, among others.

For additional assistance, please feel free to contact us, and one of our attorneys can provide further guidance.

Good luck.

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Answered on 10/24/06, 12:26 am

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