Is it legal to start an independent business that is related to the company that I work for now?

UPDATED: Feb 25, 2012

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Is it legal to start an independent business that is related to the company that I work for now?

A buddy and I thought of an idea that will provide a service to a group of businesses that our employer deals with. Our employer cannot provide this service and we will not use company time or resources in any way to provide this service but we may not have known about the need for this service if we did not work for our employer. so my question is. Is it illegal to pursue this idea?

Asked on February 25, 2012 under Business Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

1) If you have signed any non-competition or non-solicitation agreements (or broader employment agreements which contain such a term), check what those agreements say--that will largely (or entirely) determine what you can do.

2) You can't use proprietary information of your employer for your benefit--so, for example, you may not be able to specifically approach your current employer's customers if the only way to know of them, who to contact at them, etc. is through your company's customer files/database/etc.--though you can advertise, have a website, go to trade shows, etc. and if they approach you, that would be fine.

3) The use of proprietary information includes using what you know only as an employee of your current employer to do anything which might damage or undercut their business.

If you're not violating any agreements, you're not using some proprietary information, and you're not using any company resources or time, what you propose should be legal. Your employer may still choose to terminate you for doing this (if you haven't resigned first), but that's a different matter.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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