The laws of New York heavily favor shielding a company’s interests while a worker remains on the payroll. However, once that professional relationship ends, the legal scales shift significantly, potentially leaving the employer vulnerable.
When does taking a list become actionable?
In New York, former employees are generally free to solicit past clients. However, a former employee may face legal liability in New York under the following circumstances:
- They committed illicit acts, such as physically stealing or unlawfully duplicating corporate files.
- They signed a binding contract that prevents them from contacting or soliciting those specific clients.
- They took or used a client list that qualifies as a protected trade secret under New York law.
Under New York law, client lists compiled from public sources are generally not protected trade secrets; trade secret protection applies only if the list incorporates confidential, non-public information that competitors cannot easily discover or recreate.
What steps should you take now?
You should immediately review your own security habits, since courts may reject theft lawsuits if companies never took reasonable steps to protect them in the first place. Furthermore, if you had a non-solicitation agreement in place, you should check if it can pass the BDO Seidman test to know if the agreement is enforceable.
How a legal guide may help
New York courts have set the bar high for an employer who wants to sue their employee in a business dispute. You may need a clear strategy if you are going to take the matter to court. With the help of an experienced business attorney, you can analyze your situation and build a strong strategy to protect your hard-earned corporate assets.
