Legal Advice, Breach Contract confidential information

[bigman]

Hi,

A year ago I left my old employer and setup an IT company with another ex employee. I had a strict non-compete and non-solicitation clause that lasted for a period of 6months. At the time I sought legal advice and followed the recommendations precisely to avoid any problems. Naturally this stopped me from talking to my previous clients etc and throughout this time I had no communication as I was trying to do the right thing.

Once the six months was up however, I was told it wouldn't be a problem dealing with old clients; so as I did get contacted by some previous customers I then started to communicate with these former clients, I was under the impression that this was fine and there couldn't be any repercussions.

A couple of months ago my company anonymously received some marketing databases that could be used for mail shots or cold calling as we could lookup the company name details on yell for the tel. no's etc. Although this sounds a bit odd, to put you in the picture there are quite a few disgruntled ex-employees at my former company so looking back it probably came from there, as they were probably trying to get their own back; so naively or not it was referenced.

It turns out now that a portion of this information contained data from my old employer and I have now received a solicitor's letter from them saying I am in breach of contract and whilst in employment have taken data, confidential information and trade secrets for use at my company. They are now going to sue and possibly seek an injunction if its use isn't stopped. It has also been requested that I must put this in writing confirming that I will comply with their request.

Although I didn't take any data at all and it was received to my companies address almost a year from leaving, please could anybody advise me on where I would stand from a legal perspective with the use of this. Would I be better off simply avoiding its use; what is the likely hood of an injunction against my company or me being sued personally. I have also been told that injunctions are incredibly expensive, is that true as from previous experience all legal costs are expensive anyway.

Also from another perspective, I used to visit clients all day long at my previous employer and can easily remember them from memory as I regularly visited them; so would using this information considered to be illegal as I simply remember it from my former workplace.

Any help or guidance would be much appreciated. Sorry for such a big post, I thought it would be better to be more concise than vague.

Thanks.

 

[noidea]

1) Stand your ground!

2) You can't sue someone by filling in an application form going down your local court and getting it stamped... Suing someone doesn't even imply winning, all it means is take legal action against and it usually takes around a year to get to court anyway.

3) How did they know / why do they think you have stolen their data?

4) Do you have any evidence to suggest that:

a) it was received a year afterwards
and
b) that you were set up?

5) Using the databases only gives them a defence, not you!

6) If you have the money to go to court, let them take you to court... in most cases the Claimant will have to pay the Defendants costs if they lose the case.

7) I have never heard of such a case of an injunction to stop some small company (I presume correct me if I am wrong) using marketing databases. it's likely that any injunction i.e. preliminary would be applied for during the period of the court case rather than being a separate issue of having an injunction made outside a court case.

8) You are unlikely to be sued personally, as you said your company have received the databases and they want to (illegally) put your company (a competitor) out of business.

9) Cease and Desist and solicitor letters are to be ignored. The first legal correspondence isn't to worry about. Many solicitors are happy to send them without having any basis, case to win, or intention of taking things further but just to intimidate and scare you. I mean solicitors get paid well, and such letters are good earners. They are probably template mail merges done by someone on work experience or a secretary and they are paying for 30 minutes or an hour solicitor time.

 

[Lime One]

It is risky to use data which you do not know the orgins of or have a licence to use. There are a few clients of ours who have been taken to court on similar cases, one settled out of court, the other stood her ground agains our advice and ended up paying the court costs of the other party and damages based on the loss of earning for the pursing party. Don't be encouraged to bravado unless you are sure of winning.

 

[bigman]

Thanks for your comments,

With reference to why in my opinion they think I have stolen data I can only assume is because we have been using the database we received for a couple of marketing mailers. They may think they have other info, but as I didnt take anything, it would be an incorrect assumption. We have full evidence of this, however as you state this doesnt guarantee a win in court.

I can only assume they are using bully boy tactics to try and get us closed down, which is crazy. To put this into perspective we are a 2man band, 12months old with a turnover of about 120k. They are a ten year old company, about 40 staff and turnover of over £8million. Hence they are probably quite happy to throw some money at a solicitor, knowing we dont have as much. I am asuming as the letter has currently being sent to me personally, the goal is to get this moved over and get my company involved in some lengthy court case. They have quite a history of taking people to court and are quite happy to waste money trying to shut people down so it is not the usual mail merged warning letter.

I suppose my biggest thoughts are what is involved in an injunction/what is the likelyhood of this actually ever coming to fruition. I was under the impression that you always had to sue somebody for loss, damages etc resulting in a calculated figure to be presented to the court. As we have received no business whatsoever from this, would that work in our favour as no loss has been incurred. Would I be better off turning down any work from these customers should they call.

Should I reply to the letter with a simple response or ignore it and take the gamble as the standard "if no response is received legal procedings will commence" is on it.

Obviously I am going to take legal advice over this, but any opinions would be much appreciated so I can make a calculated decision.

Thanks in advance.

 

[davidakerr]

posted by noidea

"cease and desist and solicitor letters are to be ignored................

Not too sure if I agree with this idea.

 

[i.m.]

I certainly do not agree that this should be ignored. Whilst it is true that tactics are often used to bully smaller businesses, you have - inadvertently - presented them with a good opportunity if indeed the material is the company's. It should not be being used by you and so there is a risk that you will be on the wrong side of an injunction application. Believe me, they are stressful, expensive exercises and they will cost money and if they are successful in obtaining an injunction they will seek their costs from you. A failure to respond to a c&d letter sets the stage for an injunction application.

I am happy to look at some of the detail if that would assist. I most certainly would not ignore it.

Best

i.m.

 

[bigman]

I am going to see a solicitor tomorrow to go through everything in more detail so will just have to see how it all pans out.

Thanks for your comments.

 

[Stonelaughter]

1) Stand your ground!

2) You can't sue someone by filling in an application form going down your local court and getting it stamped... Suing someone doesn't even imply winning, all it means is take legal action against and it usually takes around a year to get to court anyway.

3) How did they know / why do they think you have stolen their data?

4) Do you have any evidence to suggest that:

a) it was received a year afterwards
and
b) that you were set up?

5) Using the databases only gives them a defence, not you!

6) If you have the money to go to court, let them take you to court... in most cases the Claimant will have to pay the Defendants costs if they lose the case.

7) I have never heard of such a case of an injunction to stop some small company (I presume correct me if I am wrong) using marketing databases. it's likely that any injunction i.e. preliminary would be applied for during the period of the court case rather than being a separate issue of having an injunction made outside a court case.

8) You are unlikely to be sued personally, as you said your company have received the databases and they want to (illegally) put your company (a competitor) out of business.

9) Cease and Desist and solicitor letters are to be ignored. The first legal correspondence isn't to worry about. Many solicitors are happy to send them without having any basis, case to win, or intention of taking things further but just to intimidate and scare you. I mean solicitors get paid well, and such letters are good earners. They are probably template mail merges done by someone on work experience or a secretary and they are paying for 30 minutes or an hour solicitor time.

noidea - could you give us some idea of your background so that we know where your recommendations are coming from please?