Break away Company - Dispute

D

dmcb73

Guest
I've been an employee of a company for a number of years. I finally decided to breakaway and setup my own company last year. I stayed with the old company for a number of months after it was setup until I got established and then left.

My old company is naturally upset, and is now threatening legal action, on the grounds that you cannot be a director of one company and be the employee of another.

Do they have any case ?
 
There is nothing under companies legislation preventing any person from being both an employee and a director of different companies.

However your contract of employment may have had some restrictive clause in it. What does it say there?
 
An employee has various duties to his employer. By way of general observation only, these include - whether specifically mentioned in the employment contract or not:

1. Not working against the employer's interests while still an employee.
2. Not using customer lists, or any information obtained in course of employment, for your own personal gain.

If you were in any way diverting work or business opportunities from your old employer to your new company while still an employee, then I think you definitely have a difficulty. The situation would be worse if you were a director with your old employer, but even so, there is still a definite problem if you were acting as outlined .

Consult a solicitor.
 
Good advice from MOB, you are on thin ice dmcb73.

dmcb73 said:
My old company is naturally upset, and is now threatening legal action, on the grounds that you cannot be a director of one company and be the employee of another.
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If you had worked for me I'd do everything I could to put you out of business. Even if the court case failed I'd target your customers and even if it cost me money I'd undercut you. I'd also target your employees (if you had any) and try to poach them. I would be very surprised if your former employer feels any differently.
 
dmcb73: did you old employer have any dodgy business practices? For example, did they use pirate software?
 
Because they will stop threatening legal action if he reminds them of this.
 
Flax said:
Because they will stop threatening legal action if he reminds them of this.
Click to expand...

How can you be sure of this?

Can the OP afford to "up the ante" and risk an irretrievable breakdown in his relationship with his former employer? Can he afford the defence of a defamation case, or other costly legal proceedings? Who has the most to lose?
 
Well, I was in a similar situation. I left the (web) company I was working for and started a similar website as a hobby.

They sent very aggressive solicitors letters with crazy accusations.

I reminded them of all the laws they broke when I worked there.

I never heard from them again...

The company I worked for was a well known Irish website. I guess they felt they had more to lose by pursuing me further.

EDIT: I am not telling the OP to do this. It's just a suggestion.
 
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