If you are an employee thinking of departing your employment to start your own competing business, you need to be aware of the scope of your rights and responsibilities under California's trade secret and unfair competition laws - lest you find yourself a defendant in a lawsuit by your former employer. A company may sue if it believes that employees with access to confidential company information have used the information to start up their own business and compete with their former employer. Using unfair competition laws, often the former employer will rush into court and seek a temporary restraining order, an injunction, as well as monetary relief.
A trade secret is information, including a formula, pattern, compilation, device, method, technique or process that:
Some customer lists are trade secrets and some are not - depending on how they were compiled and maintained. Theft of trade secrets can carry serious, expensive consequences.
California law regarding non-competition agreements and trade secrets is complex and evolving. Unlike other states, California disfavors agreements not to compete, except where associated with the sale of a business or the dissolution of a partnership or limited liability company.
Generally, a company cannot rely on a simple "covenant not to compete" or Confidentiality Agreement to prevent its former employees from working for competitors or starting a competing business.
The lawyers at Kelley•Semmel, LLP can provide you with advice on the parameters of what you can and cannot do in light of trade secrets and unfair competition laws to minimize the risk of getting sued. We counsel and represent individuals and companies in the full gamut of disputes involving unfair competition, trade secrets, improper intellectual property disclosure, covenants not to compete, and non-disclosure agreements. Contact a trade secrets and unfair competition lawyer at Kelley•Semmel, LLP today.