Can a sports club sue a coach for helping to start a new non profit club?

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Can a sports club sue a coach for helping to start a new non profit club?

The coach in question was actively coaching for the old club while participating in the formation of the new one, however was never under contract and had no oral or written understanding with then regarding other clubs. The old club is for profit and the new one is non-profit. It was formed primarily because of questionable practices by the old club.

Asked on April 18, 2018 under Employment Labor Law, Oregon

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

A person may compete with his former employer--even begin his competition while still employed--unless the person had signed some non-competition agreement. The rule is that competition is allowed unless there was a contratual agreement to the contrary. If there was no non-competition agreement, the club cannot sue simply because he helped start or is now working for a new club.
That said, he could not use any information--like player lists or contact information for club members--from the old club for the new club. That information is the property of the old club, made available to him only as part of his job and not for his (or anyone else's) benefit otherwise. It is a form of theft to use a business's proprietary information, which you had access to only due to your employment, to compete with the business or to benefit a competitor.  Therefore, if the coach used information from the old club in starting or working for the new club, he could potentially be sued for that misappropriation of their information.


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