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Hi I was wondering if you could help me out. Long story short…

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Hi I was wondering if...
Hi I was wondering if you could help me out. Long story short my fiance' was working as a 1099 employee for a company called stonearch const...he has not been paid on a regular basis so he had a couple files that the company had never "touched" no money or anything was ever done. He found another company that is willing to pay him when they get the 1st check. Now Stonearch is saying that they're going to sue my Fiance' for these files. (that he brought to the other company). Do they have a right to do that? Basically they weren't folliwing their agreement to even pay on past files.
Submitted: 8 years ago.Category: Business Law
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6/21/2010
Business Lawyer: JPEsq, Attorney replied 8 years ago
JPEsq
JPEsq, Attorney
Category: Business Law
Satisfied Customers: 5,106
Experience: Experience as both in-house and outside counsel in general business and transactional law
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It is really two separate issues.

 

1) He has to be paid for the work he performs. He should file a small claims suit and a wage claim.

 

2) He cannot take the company's property or information to a competitor. It is theft and a violation of his duty of loyalty as an employee/contractor. So he has definitely done something wrong here and they can sue him for it.

 

Since both parties have done wrong here, it might be best to negotiate an agreement.

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Customer reply replied 8 years ago
I'm a little confused. He didn't take the companies property. His job is to canvas neighborhoods and get homeowners to sign up to get work done on their house and have their insurance pay for it. That's the first step (nothing was done on these few files). Then the second step would have been the adjuster apt-at that time the insurance would give the homeowner a check to have the work done. The 3rd step would be to have the work done on the house. The final step is to collect the other half of the money and then at that time Stonearch would do the invoicing and make payment to my fiance'. So just because he initially got the homeowner to sign up under Stonearchs name he's in the wrong? When he brought these files to the other company the other companys owner and Chris went to the homes and had the homeowner sign a different CONTRACT for them to do the work. Technically Stonearch's paper was NOT a contract just an agreement to have them do the above named steps.
Business Lawyer: JPEsq, Attorney replied 8 years ago

Well, when you said "file" I thought you were talking about a paper file.

 

But the information contained in the file can still be considered intellectual property of the employer. Client lists, sales leads, confidential information... they belongs to the employer. Even if he did not walk out with a paper file, he is not allowed to take the prospect list under certain circumstances. It really comes down to whether the list should be considered a "trade secret." There are a number of factors to consider, but it is certainly possible.

 

Here is an article about the issue: http://library.findlaw.com/1999/Jun/1/127539.html

 

 

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Customer reply replied 8 years ago

Ok I understand that...these files or "leads" he got himself. Stonearch Construction did nothing at all on these.

Business Lawyer: JPEsq, Attorney replied 8 years ago
Didn't he get the leads while working on the clock for Stonearch?
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Customer reply replied 8 years ago

He got the leads while working for Stonearch construction. There is no clock because he's an independent contractor. And I might as well throw this in also...the company still owe's him close to 20K which we will be pursuing in small claims court. We're grouping 4 properties per court case to keep the dollar amount under $7,500.00

Customer reply replied 8 years ago
Chris also NEVER signed a no compete waiver.
Business Lawyer: JPEsq, Attorney replied 8 years ago

Well if he got the leads while doing work for Stonearch, they generally belong to Stonearch. Whether or not they get protection as a trade secret is pretty questionable though. There is probably nothing to worry about, but it is possible.

 

It is not a question of competing. It is an issue of taking the intellectual property of the employer and converting it to his own use.

 



Edited by JPEsq on 6/21/2010 at 8:11 PM EST
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