Legal Question in Business Law in Texas

Theft of Confidential Business Information

Our company hired 3 independent contractors. They signed contracts to work exclusively for our company and in turn received weekly compensation. In July, 2007, these three individuals formed their own company in the same industry as ours while still under contract with our company. They had a non-compete clause in their contract. They proceeded to take marketing leads we paid for and gave them expecting them to sell our equipment, and used them to sell their own company's equipment for their own personal gain. They even did this with a current customer. They in turn continued to collect compensation from us and told us these leads were dead. Now, I have proof that several deals were closed that were our leads and therefore potential clients. I can only imagine how many leads they stole and attempted to sell to that we don't know about...they had access to all of them. Is this considered embezzlement, fraud, theft or a combination of the above? What can they be charged with and what are the penalties for these crimes? It sickens me because 2 of the 3 are family members and they learned everything from us then used this knowledge along with our confidential information for their own gain.


Asked on 12/21/08, 12:27 am

1 Answer from Attorneys
Doug McCullough Phillips & Reiter

Re: Theft of Confidential Business Information

In a situation like you described, if the non-compete is properly written, it might be possible to get a restraining order to enforce the non-compete. Taking leads may be a violation of the non-compete. If so, there might be a claim for taking business opportunities. We'd need more facts to actually be able to advise you.

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Answered on 12/21/08, 9:18 am


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