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Lucy, Esq.
Lucy, Esq., Attorney
Category: Business Law
Satisfied Customers: 29820
Experience:  Attorney
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Hello! Ive worked for a bookkeeping firm for 6 years, in

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Hello! I've worked for a bookkeeping firm for 6 years, in April 2013 a co-worker and I told them we were starting a competing business. We agreed to stay on until July 31st. However, they implemented a new policy today that included a non-solicitation, I gave my resignation effective immediately. While it is not my intention to take any clients, I do have some that are willing to give me a reference. I want to keep that option open, hence no signing the non-solicitation and quitting. They asked if we would be open to staying until 07/31 as a contractor from our new business to help complete their workload and continue training new employees. This would be completely a contract/1099 service, I would not longer be an employee. My question is: If I go back to work for them as a contractor through my LLC, will their be any possible recourses due to the fact that I still want to be able to contact their clients? Any possible issues that this could affect my new business by doing this for them? I'm concerned that this could be an issue for my LLC if they see that I'm still going forward with the references.

My name is XXXXX XXXXX I'd be happy to answer your questions today.

If they require you to sign a non-compete in order to do the contract work, that could cause problems for you. Make sure that you carefully read any paperwork they present you to avoid an issue. Otherwise, there is nothing in the law that prevents you from using contacts you developed while working there (since there's no non-compete), and doing the work as a contractor should not have any negative impact on your new business.

The other thing to be aware of is that the LLC must be registered with the Secretary of State before it starts doing business (otherwise, you're just working on your own behalf), and that all of the records/payment of the LLC must be completely separate from your personal records. So, for example, if they hired you as a contractor through the company, then they would pay the company, and the company would pay you.

If you have any questions or concerns about what I've written, please reply so that I may address them. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for answering your question. Thank you.
Customer: replied 4 years ago.

Should we draw up any type of contract between both parties while we are doing the contract work that will remove any type of liability? LLC is filed with the state. To this date, they have been very specific even with no non-solicitation, to not contact or have any involvement with their clients. We are concerned that they could come back on our business after we do the contract work and accuse our business of stealing their clients, if we work with any of them in the future. Is there any possibility that they could take our new business to court if that happens? Our business will not typically do any type of "contract" work, we don't want to get into an issue that could give us problems.

Unless there is a written non-compete, you're allowed to solicit their clients. The general rule is that competition is permitted.
Customer: replied 4 years ago.

So your saying that in the absence of any type of agreement, they cannot hold our company liable for soliciting their clients either during or after our contract period? They asked us to remove their clients from our social media accounts while we were employed, as a contractor, would they not be able to do this? Thanks.

They cannot hold you responsible for soliciting their clients if you never agreed not to. With social media, as employees, if you had their clients on your accounts, you could be fired. As an independent contractor, they could terminate the work relationship if you have their clients on your social media pages. But you can also set your privacy settings so they don't have access to your pages, unless they're going to make access a required term of your contractor agreement. That shoud be up for negotiation.
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