Starting a business to compete with current employer. What to watch out for?

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

Myself and 2 other employees will shortly be starting our own business in the same trade. None of us have contracts/non-compete clauses etc....

My concerns are that, myself and the two others that are leaving ARE the business. We are the director, assistant director, and account manager (for the most profitable account), for the most profitable department (by far).

We will not be taking any "trade secrets" (as there are none). And will not be stealing "client lists" etc.... We will not be taking the "most profitable account", as it is under contract with our employers.

But from the day we "open our doors" we plan approaching past clients, at least to make them aware of where we are now. Which none have contracts with our current employer.

A "client list" is not needed for us to know who the clients are, if that makes sense. A lot of our clients, we have been working with for years. And in our industry where we service other businesses, a client list is a phone book/google/convention center upcoming events calendar/etc....

As long as there is no non-compete between any of us and our current employer, and as long as we don't "steal" an actual client list, is everything fair game?

One last bit. Two of our cellphone plans (monthly bills) were paid for by the company, but we own the actual phone, the account managers was not, even though he was required to have and use it for the job. A lot of our clients are in our cell phones. Should we all wipe our phones after/before leaving to just be safe?

A "client list" is not needed for us to know who the clients are, if that makes sense.

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a client list does not have to be some physical recordation of past or current clients. What you carry in your head is a client list.

And in our industry where we service other businesses, a client list is a phone book/google/convention center upcoming events calendar/etc....

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Um, no, it's not. That, at best, would be a prospective client list. A client list is the people with whom the company had done business with.

As long as there is no non-compete between any of us and our current employer, and as long as we don't "steal" an actual client list, is everything fair game?

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as I stated; a client list does not have to be a physical manifestation of past or current clients of the company. If you interfere with the business relationship between the current employer and any of their clients, be prepared to prove they are not active clients. Also, without knowing what you are doing, it is hard to suggest possible problems but be cautious of copying anything that may be protected intellectual property such as trade secrets (I know you said there are none but there are often trade secrets that people do not realize are trade secrets until they steal them and get sued for doing such)

Should we all wipe our phones after/before leaving to just be safe?

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that would be a good start. That is a physical manifestation of a client list and can be very damning should the former employer take issue with your new company.

Mind you, I know a person who the former employer claimed he created a client base for them over the years and when he left to start his own business, was promptly sued for servicing those clients, even though he claims to not have actively sought out their business; he lost over $1M in the suit (plus at least his legal expenses)

Here's another thing - My then-employer once had a couple of employees do that (and, believe it or not, it was in your state). The newly created employer made several attempts to hire away employees from the old employee. Some were successful, some were not, but enough were so that the old employer (who was actually the sweetest guy in the world) went to court and successfully got an injunction prohibiting the new employer from soliciting his employees to come work for them.

cbg said:

Here's another thing - My then-employer once had a couple of employees do that (and, believe it or not, it was in your state). The newly created employer made several attempts to hire away employees from the old employee. Some were successful, some were not, but enough were so that the old employer (who was actually the sweetest guy in the world) went to court and successfully got an injunction prohibiting the new employer from soliciting his employees to come work for them.

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**A: don't you mean old employer? Anyway, there was a case that similar to the one you mentioned in my state also.

HomeGuru said:

**A: don't you mean old employer? Anyway, there was a case that similar to the one you mentioned in my state also.

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How do you know his age? Maybe he was a young employer in an old man's world.

justalayman said:

How do you know his age? Maybe he was a young employer in an old man's world.

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**A: hahaha, too funny.

Well I am a bit confused. The clients we want to target do not have a contract with our current employer. Also our industry does not "sell a product".

It is a audio/video equipment rental company for corporate clients. They call us when they need service.

So what do we do in this situation? When looking at the "perspective" client list, it will have quite a few clients that have used my past employer. Do we just ignore those? Is illegal for us to inform past clients of our new business (after we have left of course).

Oh and we will not be hiring old employees (at least not for a good long while).

So after a bunch of research, I THINK I have the basic idea of what we can and can't do.

Since none of us have any non-competes, and there are no employee handbooks/policies. We don't have too many restrictions. We cannot take any price, client lists. Now they do openly advertise thier price list. And even part of their client list.

We can let ex clients know where to find us. But should refrain from trying to "sell" them on us. I.e. They need to come to us.

Anything else I am missing?