{4:48 minutes to read} It’s exciting to find yourself in a place where you can start your own business—exciting and frightening. But, if you’re leaving a place of employment to start your own shop, it’s very important to be sure that your present employer is not inadvertently going to own a piece of the work that you do for yourself, or have a claim against you for taking clients.
If you have a non-compete agreement in place, that would give a pretty clear sign that you couldn’t take clients whom you met while you were working for the employer. But even if you don’t have a non-compete agreement, you still have restrictions on what you can do, if you do it during your regular business hours and use your employer’s facilities.
To avoid an employer’s claim that the work you’re doing to build your own business or practice does not conflict with or is not being developed at the expense of the employer, the work will have to be done on your own time. It will also need to be done on your own computer, not the employer’s computer or other equipment.
Also, don’t use the corporation’s email address for communication, because you really have very little entitlement to assume that it’s private. (For the same reason, you really should keep private conversations on the corporate phone to a minimum, if not non-existent.) The safest thing to do is to limit your new business efforts to the evenings or the mornings, before or after work.
As a practical matter, there are at least two things to keep in mind:
- Is what you’re developing in conflict with your present employer?
You’re allowed to set up a corporation or an LLC, so you have an entity into which you can pour your efforts once you leave employment. But even without a non-compete, New York law imposes a duty upon an employee not to compete with his current employer and not to take an opportunity for himself that the employer is able to do.
New York is a relatively good place for workers, but it’s also a good place to be an employer.
2. Do not send out an email announcement to your future clients.
It may very well be that the clients with whom you have developed a personal relationship and who trust that you’re doing the best work will want to follow you, and will follow you. You can’t, however, float that opportunity to them until you have your own shop, which was developed on your own time, with your own computer.
If you don’t have a non-compete, there’s nothing stopping you after you leave from contacting the people that you met while you were working for the employer.
The emotional component of this is you want to have some assurance that when you leave the place that’s paying you a salary—making you unhappy, but paying you a salary—you’ll be busy with your own business. The temptation is to send stuff out while you’re employed, saying, “I’m planning on leaving. Would you follow me?” Don’t do it.
Quit, and then get your clients. I appreciate first-hand how scary that can be (having had a solo practice before starting this firm), but as a legal matter, if you land a big client and you have a paper or an email trail indicating that you landed them while you were still employed, you may be spending much more time with attorneys than you would like.
Don’t shoot yourself in the foot before you get your foot out the door. Wait until the effective date of termination takes place, so you are truly on your own.
