Help – My Business Partner Is Starting A Competing Business. What Can I Do?
It can be quite a jarring experience to learn that your trusted business partner is actively sabotaging the business you are building together to build a competing company. It can be easy to become emotional and question how your relationship got to this point. But what’s most important is that you start to move quickly to protect yourself and your business. To do this, you’ll need to know what your options are.
The best way to handle this would have been prevention. You know that now. Adding a non-compete clause to any partnership or operating agreement may have provided a remedy and could compel the partner to abandon any such enterprise. To be clear, however, a non-compete clause must meet certain threshold requirements to be legally enforceable. So, if you can still go this route, make sure to use an experienced business attorney.
What Can I Do If the Partnership Has Already Been Dissolved or There Is No Non-Compete Clause?
This will really depend on the specifics of your situation. Consulting an attorney will be your best bet to determine which courses of action are available and/or likely to be successful in your situation. One option is to sue your partner for a breach of fiduciary duty or theft of corporate opportunity. This approach can be expensive, time consuming and physically and emotionally draining. You will want to talk to an attorney to learn more about this option.
A different solution is to try to work with your partner to reach some sort of mutually beneficial resolution to the situation through a collaborative or cooperative negotiation where diligent and experienced business counsel on both sides of the table can help both parties achieve a satisfactory resolution.
Ultimately, however, you may be left with no other option than pursuing some sort of litigation. Whatever you decide, this area of law is complex. An experienced business attorney can fully evaluate your situation and help you chart the best path to resolving this issue as quickly and efficiently as possible.
An experienced business attorney can help you draft a non-compete clause that protects you, your partner, and your business as well as assist you in situations where a non- compete clause has not been entered or does not otherwise apply. If you have any additional questions about non-compete clauses or business partnerships or simply wish to discuss other related legal issues, call Stephen Rizzieri at 214.434.1017 or fill out the form on our site today.