Independent Contractor to Business Owner - Can I carry Accounts over??

[LdiJ]

Thank you for all the responses. I would like to clear a few things up.

The customers I would be taking with me would be accounts I developed as new accounts myself. Meaning they were not customers of ours until I came to the company.
Accounts = customers.

Now I wish to leave and create my own start up taking these accounts with me. Again I am a 1099 employee who has not signed any sort of non compete. It is in the advertising industry, meaning I provide promotional products to my customers. These products are available to the entire industry (ASI).

You are not a 1099 employee because there is no such thing as a 1099 employee. You are a self employed independent contractor. However, I really wish that you would clear up the issue of whether you want to take these customers away from the company you currently rep for, or whether you want to sell different or similar products to these same customers, whether they continue to buy from the current company or not. It honestly does make a difference.

 

[quincy]

You are not a 1099 employee because there is no such thing as a 1099 employee. You are a self employed independent contractor. However, I really wish that you would clear up the issue of whether you want to take these customers away from the company you currently rep for, or whether you want to sell different or similar products to these same customers, whether they continue to buy from the current company or not. It honestly does make a difference.

LdiJ, what Icyymike does with customer accounts he takes from his former employer is NOT what makes a difference, except in the types of legal actions that could be taken against him.

What needs to be determined is if he is entitled to take the customer accounts at all.

To determine this, he needs to have his employment contract and the facts of his employment personally reviewed.

 

[LdiJ]

LdiJ, what Icyymike does with customer accounts he takes from his former employer is NOT what makes a difference, except in the types of legal actions that could be taken against him.

What needs to be determined is if he is entitled to take the customer accounts at all.

To determine this, he needs to have his employment contract and the facts of his employment personally reviewed.

He is NOT an employee. He is an independent contractor.

And yes, what he wants to do with the customers DOES matter. There is a huge difference between "taking accounts" and selling a different product to the same customers, particularly if the specific product does not actually compete.

 

[quincy]

He is NOT an employee. He is an independent contractor.

And yes, what he wants to do with the customers DOES matter. There is a huge difference between "taking accounts" and selling a different product to the same customers, particularly if the specific product does not actually compete.

Oh, for heaven's sake, LdiJ. You seriously need to start supporting what you say with legal cites because your postings on this forum mislead and misinform on a regular basis.

The legal issue is NOT what product is being sold. In fact, Icyymike has already said that the products he will be marketing are available to everyone in the industry.

The legal issue comes with the ownership of the customer list or accounts, which is primarily an IP issue (although other state and federal laws can become an issue, as well).

PLEASE read the information provided in the following links. PLEASE try to understand what you are reading.

NOLO Texas Trade Secret Law: http://www.nolo.com/legal-encyclopedia/texas-trade-secret-law.html

National Law Review: http://www.natlawreview.com/article/california-court-considers-customer-lists-linkedin-contacts-trade-secrets-case

Findlaw: http://corporate.findlaw.com/intellectual-property/an-introduction-to-california-trade-secrets-law.html

JUX law firm (I have no connection to this firm but the information is on point): http://jux.law/did-an-ex-employee-steal-your-clients-data-ip-or-trade-secrets/

Now, if you want to provide some LAW that argues the above, please do. If all you have to provide is more made-up scenarios and guesses, please don't.

 

[LdiJ]

Oh, for heaven's sake, LdiJ. You seriously need to start supporting what you say with legal cites because your postings on this forum mislead and misinform on a regular basis.

The legal issue is NOT what product is being sold. In fact, Icyymike has already said that the products he will be marketing are available to everyone in the industry.

The legal issue comes with the ownership of the customer list or accounts, which is primarily an IP issue (although other state and federal laws can become an issue, as well).

PLEASE read the information provided in the following links. PLEASE try to understand what you are reading.

NOLO Texas Trade Secret Law: http://www.nolo.com/legal-encyclopedia/texas-trade-secret-law.html

National Law Review: http://www.natlawreview.com/article/california-court-considers-customer-lists-linkedin-contacts-trade-secrets-case

Findlaw: http://corporate.findlaw.com/intellectual-property/an-introduction-to-california-trade-secrets-law.html

JUX law firm (I have no connection to this firm but the information is on point): http://jux.law/did-an-ex-employee-steal-your-clients-data-ip-or-trade-secrets/

Now, if you want to provide some LAW that argues the above, please do. If all you have to provide is more made-up scenarios and guesses, please don't.

I do not need to provide law that argues the above. The OP does not need case law to determine whether or not he can sell to those customers. Whether or not he can sell to those customers without a potential lawsuit (which is all that matters at this point as there is no non-compete) depends entirely on details that he has not provided.

I was the CFO for a distribution company for 15 years. We had independent sales representatives all over the country. The independent reps knew the potential customers in the area better than we did. Our contracts had non-competes, but they only applied to actually competing products and the customer list could NOT be considered to be our intellectual property. All someone had to do was open the yellow pages for the area and for the type of businesses, and every customer we sold to would be on those pages...and we sold to most of the companies on those pages.

However, now that I have been doing tax full time for the last 15 years, OUR customer lists are more "property" because someone could not easily produce the same list with all of the relevant information by themselves.

The types of products sold matters, the industry matters, the type of customers matter.

You know absolutely nothing about the true details of the situation and THEY matter! That is all that I have been trying to say. The OP seems to not want to reveal the actual details of the matter so all that I can suggest at this point is that they ignore BOTH of us and get a consult with a local attorney.

 

[justalayman]

I do not need to provide law that argues the above. The OP does not need case law to determine whether or not he can sell to those customers. Whether or not he can sell to those customers without a potential lawsuit (which is all that matters at this point as there is no non-compete) depends entirely on details that he has not provided.

I was the CFO for a distribution company for 15 years. We had independent sales representatives all over the country. The independent reps knew the potential customers in the area better than we did. Our contracts had non-competes, but they only applied to actually competing products and the customer list could NOT be considered to be our intellectual property. All someone had to do was open the yellow pages for the area and for the type of businesses, and every customer we sold to would be on those pages...and we sold to most of the companies on those pages.

However, now that I have been doing tax full time for the last 15 years, OUR customer lists are more "property" because someone could not easily produce the same list with all of the relevant information by themselves.

The types of products sold matters, the industry matters, the type of customers matter.

You know absolutely nothing about the true details of the situation and THEY matter! That is all that I have been trying to say. The OP seems to not want to reveal the actual details of the matter so all that I can suggest at this point is that they ignore BOTH of us and get a consult with a local attorney.

LdiJ. You are incorrect. There does not need to be a non-compete for a client list to be protected property and it doesn't even require the products be competing.


Read this;


http://www.natlawreview.com/article/customer-lists-trade-secrets

Arguing a customer list is nothing more than what you find when you open the yellow pages is the same as saying Kentucky fried chicken's recipe is easily found by walking down the slice aisle in the grocery store. All the needed stuff is there but there is more to a recipe than guessing which spices are used. A client list is more than a list culled from a phone book.

 

[quincy]

I do not need to provide law that argues the above ...

Yes, LdiJ. You really DO need to provide law. The fact that you don't think you do, on a legal forum no less, sort of boggles the mind.

To support everything that I said in this thread, I provided links to legitimate, reliable legal sources (Texas case law, Texas law, National Law Review, FindLaw, NOLO ...). To support what you said, you provided ... um ... nothing.

If you read any of the information provided by either me or by justalayman, all supported by legal sources conveniently linked to for easy access, you should know now why what you wrote is incorrect.

I agree with you that Icyymike should ignore all that you wrote. I agree with you that Icyymike will want to speak to an attorney in his area of Texas.

Icyymike will want to have his contract and terms of employment personally reviewed, this prior to thoughts of taking and using his former employer's customer lists/accounts - and he will want to do this because of what has been provided him in the way of legal information that shows the legal risks he faces if he takes and uses his former employer's customer lists/accounts without authorization from his former employer.