If I want to quit my job and devote full-time to my own businessbut itcould be seen as a direct competitor, how should I quit so I don’t get sued?

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If I want to quit my job and devote full-time to my own businessbut itcould be seen as a direct competitor, how should I quit so I don’t get sued?

I currently manage the internet division of a company many divisions. On my own time, I’ve been working on my own project that is similar to the ebusiness and now want to quit and dedicate my full attention to my own business. I haven’t sold anything through my own site yet, and I definitely wouldn’t take any customer lists away from my current business. Additionally, the last year has shown solid increases in sales each month, so I obviously haven’t been sabotaging anything. I don’t want the owner to sue me down the road. What is the best way to go about quitting so that I cover my ass?

Asked on February 20, 2012 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you did not sign a noncompetition agreement, do not solicit customers of your current employer, and do not use any proprietary information of the employer (for example, customer lists; the pricing they have negotiated with vendors), then you should not be doing anything wrong, illegal, or impermissible.

That does not, unfortunately, mean that the employer may not try to sue you, if they either believe in good faith that you stole/took/used proprietary information, or simply want to try to "punish" you or damage a competitor. What it does mean is that if you have done nothing wrong, you will have a good chance of defeating, and possibly at a very early stage, any claim or suit by them. I personally was sued twice by a former employer--since I had done nothing wrong, I easily defeated both suits, but our legal system makes it very easy to at least initiate a lawsuit.

You should resign as soon as reasonably feasible, so as to create as much of a time gap or separation between leaving and starting your new endeavor--the more time, the better things will look. Be very careful to not approach the customers, vendors, employees, etc. of your current employer. Make sure  you do not take any information of theirs, and return all work material promptly, in a way you can document it. And budget some money for a legal defense, at need.


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