What to do about a possible wrongful interference with a business?
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What to do about a possible wrongful interference with a business?
My family and I formed an LLC and bought a small food manufacturing business after the previous owner had gone bankrupt. The price included brand name, equipment and recipes. A former employee of the previous owner took a copy of these recipes when the business closed and is now manufacturing and selling the various products under another name but with a label that is designed to look similar to our label and logo. The previous owner wanted to sue this employee but did not have the funds to do so. To my knowledge this employee was never required to sign any non-disclosure agreement. Do we (our LLC) have any legal recourse against this person who has done this unethical act?
Asked on February 13, 2012 under Business Law, Kansas
Answers:
Michael Duffy / Duffy Law, LLC
Answered 12 years ago | Contributor
If they were not required to sign a confidentiality, non-disclosure, or non-compete agreement, and took no steps to keep secret the recipies, you would have little to no recourse in that regard. If an employee has access to recipies and makes them elsewhere, they're generally allowed to do so. It happens in the restaurant industry all the time. Be sure to take appropirate steps to protect your sources, ingredients and recipies in the future, as well as utilizing confidentiality agreements, and you you'll gain trade secret, contractual and possibly other legal recourses in such a situation.
As far as the label and logo, you might have a case for trademark infringement. Trademark law is very fact-specific, but in the most general sense, if you have rights in a mark, and another mark is confusingly similar, it may be infringing. You'd need to consult an IP attorney to get an analysis of your case, advise you of any rights you might have in a current mark, any potential infringement and recourses.
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