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Can I get sued as former employee for starting my own similar business?

Basically, the situation would be like someone who works as a carpenter/woodworker for a local shop and one day decides to start his own shop. His business model will unavoidably be the same to that of his former employer's as well as many other shops who are in the same industry simply because of the work and logistics required in that industry.

There would be no violation or infringement of trademarks, patents, no use of their client list, etc. Thanks.

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Attorney answers (3)

Reputation Level 20
Unless you signed a written contract containing a covenant not to compete (which are usually enforceable only in connection with the sale of a business), you are free to start an identical business. If you do not use trade secrets, customer lists, etc. you will have no liability to your former employer. Good luck. Remember to incorporate your new business to save liability and gain tax benefits.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.

Reputation Level 14
Your question essentially asks if by the sheer act of once working for someone else, that former employee is barred from opening a similar and competing business. Generally speaking, the law frowns on such blanket restrictions. Furthermore, also as a general matter, a barrier to entry like that is essentially a non-competition covenant which almost universally has to be in a written contract. Finally, in CA, non-competes are now generally unenforceable from the get-go, even if in writing. That being said, you may want to consult with an attorney to help you setup your business in the first place (entity formation, contracts, etc.) and have that attorney look into whether there would be some other barrier (trademarks, etc.), even though you believe that you are clear on that front.

I hope this helps and good luck with your venture.

Disclaimer: This answer is for informational purposes only and does not constitute general or specific legal advice, nor create an attorney client relationship.

Reputation Level 20
CA law generally protects the right of a worker to compete in their own business, as long as trade secrets aren't involved, and as long as this isn't in the context of a business that you're purchasing.

Where you have to tread lightly is in soliciting the other employees and/or existing customers of this shop. Consult a business litigator lawyer before you take any such action, and also get some advice on the right way to structure and organize your new business.

Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

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