Q: I consulted (without a K) for a tech company that's struggling. They owed me money so I quit. Can I compete w/ them?
I found a tech solution to their problems. The CEO was impressed but the Board rejected my concept. CEO later told me they didn't 'get it.' He was very angry. After I quit, the Board fired all but two guys: an engineer and the CEO The company is failing but still exists on paper. They were well financed with angel money but never got off the ground. Some blame the CTO for that (and indirectly me I guess) but at this point it seems they cannot afford or are unwilling to invest any more chasing tech solutions. After the CTO was fired, the CEO called me and apologized. He then either resigned or was fired. Several fired employees liked my idea but some had contracts with weak non competes. My idea has merit and I'd like to develop it but I have no money. I met some Board members later on and asked if they'd reconsider my idea. Instead of an answer I got a letter from their lawyer threatening to sue me if I start a company. I'm confused. Can they stop me? I cant afford a law suit.
A: Hello. Generally, non-competes should be in writing because they should express a time limit for the non-compete and what the scope of the non-compete should be. If you signed a document that includes a non-compete clause or a non-compete language, then you'd want to analyze that language and get an attorney's take on it. Some non-competes are narrow and some are broad. I understand that you didn't have a contract, but did you sign something else with the company - like on-boarding paperwork, confidentiality agreement, etc. These are all important documents and information for an attorney to know.
Additionally, as a contractor, depending on the type of work you did, the work product that you developed for the company could belong to the company (see works made for hire article here - https://www.copyright.gov/circs/circ30.pdf); thus you'd want to analyze this particular issue with your attorney as well, especially if you signed a document assigning the company your rights to the intellectual property or idea. You'd want to be careful using an idea that actually belongs to the company. A qualified attorney can help you work through these issues.
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