Leaving current company and retaining customers

[FLBiz]

What is the name of your state (only U.S. law)? Florida

I'm currently working as an independent contractor on a 1099 basis in a brokerage-type business (similar to a real estate agent working under an employing company); my current clients choose to work with me personally, not necessarily with the company I work for.

I'm considering branching off and starting my own company, and plan to have my current clients cancel their current agreements with the current company, and re-sign with my new company.

I do not have ANY employment/contractor agreement, no non-compete, and no commitment to act any differently than I plan to, verbal or written.

Client commitments to the current company call for written notice of cancellation, which I plan to have them satisfy before signing new commitments with me independently.

My only concern is, I personally account for a large percentage of company business. I'm wondering if I expose myself to any risk of legal action if leaving results in a significant decrease in company revenue?

 

[quincy]

What is the name of your state (only U.S. law)? Florida

... Client commitments to the current company call for written notice of cancellation, which I plan to have them satisfy before signing new commitments with me independently.

My only concern is, I personally account for a large percentage of company business. I'm wondering if I expose myself to any risk of legal action if leaving results in a significant decrease in company revenue?

Yes, you expose yourself to legal action. Inducement of breach of contract, potentially unfair competition claims.

 

[FLBiz]

Part of the contract the customers have with the company is that they may cancel at any point with written notice. Notifying them that I'll be leaving and them submitting cancellation notice is inducing breach of contract?

Also, is there anything I should do to avoid unfair competition claims?

 

[quincy]

Part of the contract the customers have with the company is that they may cancel at any point with written notice. Notifying them that I'll be leaving and them submitting cancellation notice is inducing breach of contract?

Also, is there anything I should do to avoid unfair competition claims?

Would the customers be cancelling their contracts and leaving the company were it not for you informing them you were starting your own company?

The Restatement (Second) of Torts §766 provides that "[o]ne who intentionally and improperly interferes with the performance of a contract" is subject to tortious liability when the actor (you, in this case) has knowledge of the contract with which he is interfering.

Are you relying on the customer base built by your current employer for your own company start-up, and are you offering incentives (e.g., lower prices) for these customers to cancel their current contracts?

What I suggest you do, FLBiz, before you leave your current employ and start up your own company, is to have all of the plans you have for your new business reviewed by an attorney in your area. I can see you getting sued by your current employer. The attorney you see can tell you best how to avoid a lawsuit.

 

[Nellibelle]

What is the name of your state (only U.S. law)? Florida

I'm currently working as an independent contractor on a 1099 basis in a brokerage-type business (similar to a real estate agent working under an employing company); my current clients choose to work with me personally, not necessarily with the company I work for.

I'm considering branching off and starting my own company, and plan to have my current clients cancel their current agreements with the current company, and re-sign with my new company.

I do not have ANY employment/contractor agreement, no non-compete, and no commitment to act any differently than I plan to, verbal or written.

Client commitments to the current company call for written notice of cancellation, which I plan to have them satisfy before signing new commitments with me independently.

My only concern is, I personally account for a large percentage of company business. I'm wondering if I expose myself to any risk of legal action if leaving results in a significant decrease in company revenue?

You should, in no way, shape or form, be instumental in company clients canceling their committments to the current company you work for! It is totally up to them whether they want to cancel and follow you! They should make up their own decision to do so and then do it without any help from you!

It would be very hard for your current company to show you interfered with a contract if there is no evidence that you did so, however, your post in this forum could be used against you, since you did mention that you would help these clients "satisfy" their written notices of cancellations before committing to you.

 

[quincy]

You should, in no way, shape or form, be instumental in company clients canceling their committments to the current company you work for! It is totally up to them whether they want to cancel and follow you! They should make up their own decision to do so and then do it without any help from you!

It would be very hard for your current company to show you interfered with a contract if there is no evidence that you did so, however, your post in this forum could be used against you, since you did mention that you would help these clients "satisfy" their written notices of cancellations before committing to you.

It would not necessarily be "very hard" for the company to show interference. Why do you believe it would be, Nellibelle?

While posts on this forum have been used against posters in the past, that is when they provide personal information that can lead to the identities of those involved. There has been no identifying information provided in this thread. There is absolutely no reason to believe any one of the posts created here by FLBiz could be used against him/her.

 

[FLBiz]

I would not say that they are customers built by my current employer, Many of the customers are personal friends, referrals to me from prior customers, or people I've sought out and built relationships with. I'm not in a situation where customers seek out the company and work with me as a result, it's really the other way around.

I'm also curious if my restrictions as an independent contractor are different than they would be if I was an employee of the current company.

I'll also mention that some are working with the current company under no contractual obligation at all, would it be safe to assume there's not as much concern with these situations if they were to shift over to contractual commitment to my new company where there was none prior?

 

[Just Blue]

I would not say that they are customers built by my current employer, Many of the customers are personal friends, referrals to me from prior customers, or people I've sought out and built relationships with. I'm not in a situation where customers seek out the company and work with me as a result, it's really the other way around.

I'm also curious if my restrictions as an independent contractor are different than they would be if I was an employee of the current company.

I'll also mention that some are working with the current company under no contractual obligation at all, would it be safe to assume there's not as much concern with these situations if they were to shift over to contractual commitment to my new company where there was none prior?

As advised, you should seek an attorney regarding this. There was good advice offered on this thread by quincy...But only an attorney who knows THE FULL situation can really assist.

 

[Silverplum]

I would not say that they are customers built by my current employer, Many of the customers are personal friends, referrals to me from prior customers, or people I've sought out and built relationships with. I'm not in a situation where customers seek out the company and work with me as a result, it's really the other way around.

I'm also curious if my restrictions as an independent contractor are different than they would be if I was an employee of the current company.

I'll also mention that some are working with the current company under no contractual obligation at all, would it be safe to assume there's not as much concern with these situations if they were to shift over to contractual commitment to my new company where there was none prior?

I'm sure you plan to do just as you please.

 

[quincy]

I would not say that they are customers built by my current employer, Many of the customers are personal friends, referrals to me from prior customers, or people I've sought out and built relationships with. I'm not in a situation where customers seek out the company and work with me as a result, it's really the other way around.

I'm also curious if my restrictions as an independent contractor are different than they would be if I was an employee of the current company.

I'll also mention that some are working with the current company under no contractual obligation at all, would it be safe to assume there's not as much concern with these situations if they were to shift over to contractual commitment to my new company where there was none prior?

If those who are connected with your current company leave the company and head over to yours, there is a better than even chance that the current company will file suit against you and your new company. You are starting a competing business and you apparently are intending to build your company using the customers of your current employer.

You do not want to start off any new company with a lawsuit. The money you must spend defending your business and its practices against legal claims could end your company before it really starts.

For that reason, I again recommend you go over with an attorney in your area your new business plans, your working relationship with your current employer, the contracts the customers have with your current employer, and all of the other various and assorted facts and specifics that might be relevant, prior to starting your new business.

Good luck.

 

[Just Blue]

If those who are connected with your current company leave the company and head over to yours, there is a better than even chance that the current company will file suit against you and your new company. You are starting a competing business and you apparently are intending to build your company using the customers of your current employer.

You do not want to start off any new company with a lawsuit. The money you must spend defending your business and its practices against legal claims could end your company before it really starts.

For that reason, I again recommend you go over with an attorney in your area your new business plans, your working relationship with your current employer, the contracts the customers have with your current employer, and all of the other various and assorted facts and specifics that might be relevant, prior to starting your new business.

Good luck.

^^^ VERY GOOD ADVICE!!

 

[quincy]

^^^ VERY GOOD ADVICE!!

Thank you, Blue.

 

[FLBiz]

I definitely do not intend to just do as I please, I came here for good advice and thank you for giving me that. I plan to take your recommendation and have an appointment with a local attorney next week.

Thanks for the information everyone.

 

[quincy]

I definitely do not intend to just do as I please, I came here for good advice and thank you for giving me that. I plan to take your recommendation and have an appointment with a local attorney next week.

Thanks for the information everyone.

There are enough legal risks with your plans as you have outlined them here that having a personal review and assessment by an attorney in your area is smart.

Thank you for the thanks.

Good luck with your new company.

 

[Just Blue]

Thank you, Blue.

No...Thank YOU for all that your do here!!