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ScottyMacEsq, Lawyer
Category: Employment Law
Satisfied Customers: 16242
Experience:  Licensed Texas General Practice Attorney
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Im being sued because I was a part owner in a business that

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I'm being sued because I was a part owner in a business that worked for my full time job. Even though my boss knew about the ownership. They are sueing myself along with 4 other coworkers for over 1 million dollars. They claim that we conspired against them and that the services my part time company did could have been done in house. Even though other districts out sourced these same services. Do they have a strong case?

ScottyMacEsq :

Thank you for using JustAnswer. I am researching your issue and will respond shortly.

ScottyMacEsq :

I'm sorry to hear about your situation. Can you tell me what "cause(s) of action" they have pleaded in the papers that you were served?

Customer: The reason I believe that this is happening is because back in march my boss, myself and 3 other coworkers left to go to work for another company who is a competitor of the old company. The new company I work for is also being sued for trade secrets and other things.
ScottyMacEsq :

Understood. Can you tell me what "cause(s) of action" they pleaded in the pleadings?

Customer: Breach of contract, breach of fiduciary duty, and misappropriations of trade secret and conspiracy.
ScottyMacEsq :

can you tell me whether or not you actually worked on projects or in a role where you would have a conflict of interest as a part owner of the company as well as an employee of the other company?

Customer: I had someone else handle the day to day running of the business. I did however call him when work needed to be done.
ScottyMacEsq :

aside from other districts that outsource these same services, you have a defense to the claims, even that the claims were just patently wrong?

Customer: So I do have a defense.
ScottyMacEsq :

No, that was a question...

ScottyMacEsq :

That is, "do you have a defense...?"

Customer: The only defense I have is that my boss knew about what was going on. And that my primary job was more important.
ScottyMacEsq :

It's entirely possible that they're trying to get at the "deep pockets" of the new company that you're working at, but taking a "shotgun" approach to the whole matter, (shooting legal pleadings like a shotgun and seeing what they can hit). Understand that in a lawsuit, they are going to be sending out all sorts of discovery requests, such as requests for admission, requests for production, interrogatories, as well as depositions. They might just be pleading these causes of action in the hopes that they actually do turn up evidence of collusion, conspiracy, etc. that does not mean that they actually will, and in a lawsuit they would have the burden of proof to show all of these causes of action actually happened.

ScottyMacEsq :

again, it is quite possible that they are trying to get to the deeper pockets of your new employer and prevent any trade secret misappropriation, rather than trying to get to you personally.

ScottyMacEsq :

Ultimately, it's hard to say given what little I know of the situation, and if there is evidence of collusion and conspiracy to drive up prices, there could be potential causes of action against you as employees for a breach of duty to the employer. It's a stretch, and again they would still have the burden of proof of proving these causes of action, but it is possible if the evidence actually bears it out.

ScottyMacEsq :

Can you tell me if your new company is going to be representing you as well, or if you're going to be getting an attorney to represent you in this lawsuit?

ScottyMacEsq :

Are you a corporation, LLC, LLP, or a general partnership that is not registered with the Texas Secretary of State?

Customer: I'm probably going to use the lawyer who set up my LLC
ScottyMacEsq :

So it's an LLC. the reason I asked is that if it is an LLC, Corporation, LLP, etc., you would have to have representation to represent you in trial. You would not be able to represent yourself. you should certainly contact your lawyer and see if he/she handles litigation such as this. Often business formation attorneys do not handle business litigation cases, but some do.

Customer: They also want a jury trial.
ScottyMacEsq :

I would not say that based on what you told me that they have a strong case, as it does not appear that there was any fraudulent misrepresentation or hiding of matters that would be relevant to the company. Again, it really does depend upon what facts are borne out in the course of the trial, and it could turn out one way or the other. I wish that I could give you more of a definite answer, but at this stage it's hard to say for certain. Based on previous cases that I have dealt with and seen, I would say that it's more likely that they are trying to get the deep pockets of your current company, then actually trying to go after you.

ScottyMacEsq :

as for the jury trial, there's nothing you can do about that, since it is a right of either party to request. That's not unusual in any situation.

ScottyMacEsq :

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!

ScottyMacEsq :

Did you have any other questions before you rate this answer?

ScottyMacEsq :

Are you there? Please note that I am still here, awaiting your response. Should I continue to await your response, or may I assist the other customers that are waiting?

Customer: Yes.
ScottyMacEsq :

I'm not sure what question you answered "yes" to...

Customer: This is a civil matter so at the end of the day it's all about money.
ScottyMacEsq :

I absolutely understand that, all the more so in business litigation.

Customer: I just want to make sure a didn't break any law that would take me away from my family
ScottyMacEsq :

Not that I can see.

Customer: But this is a civil suit not criminal. They just want money. Not me behind bars.
ScottyMacEsq :

That's correct. And most of the time this is civil, unless it's some sort of obvious fraud (such as a Ponzi scheme, etc...)

ScottyMacEsq :

But serving in dual roles in the manner that you did, particularly with full disclosure to the employer, is not in and of itself illegal.

Customer: Gotcha. None of that.
ScottyMacEsq :

Hope that clears things up. If there's nothing else, please rate this answer. Please note that I don't get any credit for the time (~50 minutes) and effort that I spent on this answer unless and until you rate it a 3, 4, 5 (good or better). If you feel that I have gone above and beyond in this answer (my average answer is about 10 minutes) bonuses are greatly appreciated. Thank you, XXXXX XXXXX luck to you!

Customer: Ok. We did have to sign a survey every year that asked if I was involved in a business that the company didn't know about. I always answered no because my boss knew. They said it should have been in writing. Little did I know my boss didn't take it up the chain.
ScottyMacEsq :

Okay... If your boss knew and there was no fraudulent motive on your part, I don't see how that could be held against you.

Customer: Thanks for your time.
ScottyMacEsq :

My pleasure. If there's nothing else, please rate this answer so that it will close out and allow me to assist other customers that are waiting. Please note that I don't get any credit for the time (~50 minutes) and effort that I spent on this answer unless and until you rate it a 3, 4, 5 (good or better). If you feel that I have gone above and beyond in this answer (my average answer is about 10 minutes) bonuses are greatly appreciated. Thank you, XXXXX XXXXX luck to you!

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