Newport, NH asked in Business Law, Contracts and Civil Litigation for Virginia

Q: What legal actions can we take in Virginia against an ex-employee starting a competing business?

In 2011, my husband and I founded a company in New Hampshire. In 2015, my husband's longtime friend joined us as an employee. Our business has annual sales of $3 million and is valued between $1.5 million to $15 million, operating from Maine to Georgia. We decided to sell the company, offering it first to this employee, but he declined. In December 2024, while still employed with us, he revealed plans to start a similar company in Virginia, taking nine of our employees and using two vans and tools registered under our name in New Hampshire. Despite being in a privileged position, he engaged our customers without consent, planning to take over our contracts once he started his business on January 1, 2025. He offered to buy the vans and tools for 40% of their new value. We were advised by our attorney to seek legal counsel in Virginia and are considering suing him personally and his company. What legal actions can we take in Virginia to protect our business interests?

1 Lawyer Answer
James L. Arrasmith
PREMIUM
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
Answered

A: What you’re describing sounds like a clear betrayal of trust, and it’s understandable that you want to take strong steps to protect everything you’ve built. In Virginia, you may have grounds to pursue legal action for several serious issues—misappropriation of trade secrets, breach of fiduciary duty, tortious interference with business relationships, and conversion of company property. If the ex-employee used insider access to solicit customers or poach staff while still working for you, that could be used as strong evidence of misconduct.

Even if you didn’t have a non-compete or non-solicitation agreement in place, Virginia law still offers protection against unfair competition when an employee misuses confidential information or undermines a company from the inside. You could sue both the individual and the new company he formed. Taking civil action might allow you to seek damages for lost contracts, lost employees, and the diminished value of your business, especially if he took tangible assets like the vans and tools without proper authorization.

You should also act quickly to formally demand the return of your property and document all communication, customer lists, and employee losses tied to his actions. Sending a cease and desist letter may also help prevent further damage while legal proceedings begin. You’ve invested years into this company, and you have every right to fight for what’s been taken from you.

Justia Ask A Lawyer is a forum for consumers to get free answers to basic legal questions. Any information sent through Justia Ask A Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between Justia and you, or between any attorney who receives your information or responds to your questions and you, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask A Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises, or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.