State: Utah
My friend's been working in a particular tech-oriented customer service field for some time under three separate companies, and been pretty sick of working under others. He decided to get me and a couple of other people involved in starting a similar company, and we've been going through our business plan, getting domains registered, getting approved with a merchant services provider (to which we're probably ready for service in a few days), and buying a few initial ads to do some research of which channels seem to pull people in. We haven't actually started taking any customers yet, and haven't had any sales. He was planning on giving his two weeks' notice, then beginning to take calls and sales once all of our infrastructure was in place.
Today my friend got fired at his current employer for starting another company while working for them, in violation of his noncompete contract. Now we'd already done some research on whether the noncompete was going to be a problem, and we know that noncompetes are rarely enforced in our state (Utah, a right to work state) unless there's some evidence of the use of trade secrets, customer or employee poaching, or a specific geographic overlap. We've taken none of those things from any other company, and service the continental United States (the same scope as the other companies but too broad a region to be considered a real overlap).
What we're wondering is: Is there a chance of some sort of legal action in this case? We know that his employer sued a former employee once before for starting another company, but that the lawsuit apparently folded because that business went under. From what I've read online, preparing to compete is fine while you're working somewhere, as nobody expects people to quit their job until they have something else lined up, whether it's a new venture or another line of work. But could the company make the case that we were already competing with them, if we've processed precisely $0 in transactions, having had absolutely no sales with customers or financial transactions whatsoever? The only real communication we've had with the public so far is our website, some social network accounts with no posts, and a few ads (mainly for research purposes, as we don't have the PBX calling system or merchant solutions account to provide these services for a few days, and wouldn't have been using them until shortly after he quit). My friend had no plans to begin working for our LLC doing actual work with customers until all of our service partnerships and services were ready, and we're being careful not to emulate any aspect of the business plan, trade secrets, or assets of his former company/companies, or poach any customers or employees along the way. I figured I'd ask here first as he's talking about selling us his ownership and leaving so that the rest of us don't get into trouble, and I want to be able to reassure him that such a drastic action isn't necessary.
My friend's been working in a particular tech-oriented customer service field for some time under three separate companies, and been pretty sick of working under others. He decided to get me and a couple of other people involved in starting a similar company, and we've been going through our business plan, getting domains registered, getting approved with a merchant services provider (to which we're probably ready for service in a few days), and buying a few initial ads to do some research of which channels seem to pull people in. We haven't actually started taking any customers yet, and haven't had any sales. He was planning on giving his two weeks' notice, then beginning to take calls and sales once all of our infrastructure was in place.
Today my friend got fired at his current employer for starting another company while working for them, in violation of his noncompete contract. Now we'd already done some research on whether the noncompete was going to be a problem, and we know that noncompetes are rarely enforced in our state (Utah, a right to work state) unless there's some evidence of the use of trade secrets, customer or employee poaching, or a specific geographic overlap. We've taken none of those things from any other company, and service the continental United States (the same scope as the other companies but too broad a region to be considered a real overlap).
What we're wondering is: Is there a chance of some sort of legal action in this case? We know that his employer sued a former employee once before for starting another company, but that the lawsuit apparently folded because that business went under. From what I've read online, preparing to compete is fine while you're working somewhere, as nobody expects people to quit their job until they have something else lined up, whether it's a new venture or another line of work. But could the company make the case that we were already competing with them, if we've processed precisely $0 in transactions, having had absolutely no sales with customers or financial transactions whatsoever? The only real communication we've had with the public so far is our website, some social network accounts with no posts, and a few ads (mainly for research purposes, as we don't have the PBX calling system or merchant solutions account to provide these services for a few days, and wouldn't have been using them until shortly after he quit). My friend had no plans to begin working for our LLC doing actual work with customers until all of our service partnerships and services were ready, and we're being careful not to emulate any aspect of the business plan, trade secrets, or assets of his former company/companies, or poach any customers or employees along the way. I figured I'd ask here first as he's talking about selling us his ownership and leaving so that the rest of us don't get into trouble, and I want to be able to reassure him that such a drastic action isn't necessary.
