Legal Question in Business Law in Maryland

sales customers

I had asked a question a while ago about whether there could be problems with me starting a Service business that might take clients away from the Co. I work for now (15 yrs.). Since I have never signed a 'Non-Compete'' I was told it would be fine to persue my old customers - obviously only after I have left my existing Co.

But now I have another question: Many of the customers I may take are under annual service contracts - that I sold and know all the pricing/profit info. If I quit and approach these clients to win their Service Contract business, does the fact that they have a contract and may cancel their contract (30 day right to cancel is in all the contract terms), and I know all the financial info - does that create a different situation that allows my old Co.to legally persue me ?

Thank you for any information.


Asked on 2/15/04, 8:25 am

3 Answers from Attorneys

G. Joseph Holthaus III Law Offices of G. Joseph Holthaus

Re: sales customers

Without knowing the appropriate information, little can be said.

Generally, you may run into tortious interference with business relations.

This is a significant matter and may be resolved with properly desigining the practices of your

prospective business. Another major issue is the use of confidential or proprietary

information. It is possible that you may possess such information and thereby be

prohibited from using it to approach the indicated clients. Again, your business practices may

apply to overcome this hurdle. You should speak with an attorney with business experience. My service

is available in combination with an accountant and we can assist you with forming your business, establishing business practices and operations to protect your legal interests, setting up

accounting, and putting your idea into work to generate profits. (410) 799-9002

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Answered on 2/19/04, 2:21 pm
Robert Sher Wagshal and Sher

Re: sales customers

I believe you have a right to solicit these customers as long as you do it properly. For example, you can write a letter saying you've gone out on your own and believe you can offer better service or better pricing and would like an opportunity to compete for their business. I would not overtly encourage these customers to break their contracts with your former employer, but you can suggest that they review their contracts to determine their options. Also, be aware that MD has a trade secrets act that prohibits misappropriation and/or misuse of confidential information. I don't think your scenario fits into these definitions, but it would be useful to confer with an attorney before approaching these potential customers.

Robert Sher

301 986-4555

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Answered on 2/17/04, 12:11 pm
Daniel Press Chung & Press, P.C.

Re: sales customers

If there is an existing contract, it is possible that you could be held liable for tortiously interfering with the existing contracts. You need to have counsel carefully look at this issue and advise you in light of all of the facts.

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Answered on 2/15/04, 10:00 am


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