Minimize Your Risk of Non-Compete Litigation

Are you considering leaving your job to start your own business or joining a competing company? You’re far from alone as employees and employers continue to navigate “The Great Resignation“. You’re also not alone in worrying about your non-compete agreement and potential litigation resulting from your move.

There will never be a risk-free transition, but you can take steps to minimize your risk. A knowledgeable employment law attorney can advise you on specific circumstances, but the following tips apply to most transitions.

Read Between the Lines

You may not officially have a non-compete agreement, but overbearing non-solicitation and trade secrets agreements often masquerade as non-compete agreements. An attorney can advise you about your rights and obligations before you switch jobs.

Don’t Leave In a Firestorm

Many employees have exposure to non-compete litigation but aren’t sued; don’t give your current employer a reason to feel good about raking you over the coals on your way out. If you have nothing nice to say about your current employer, don’t say anything. Also, avoid any actions threatening your employer, such as taking your coworkers with you.

Don’t Take Any Unnecessary Data

Taking customer lists that the company owns and other sensitive data is a red flag for employers, making litigation more likely. Of course, there are legitimate reasons to take data with you – such as ownership of customer lists or preservation of evidence – but you should consult an attorney to ensure you are going about things the right way.

Be Aware of Geographical Restrictions

Many non-compete agreements contain geographical restrictions. This issue is starting to wane due to more remote positions, but starting a new business in the same geographic market as your current company can create an additional risk of litigation.

Don’t Let Fear of a Non-Compete Limit Your Career Aspirations

It’s good to be thoughtful and cautious when considering a career move. However, don’t let fear of a potential non-compete lawsuit stop you from pursuing your career goals. Seek the advice of a proven employment lawyer to put your mind at ease and ensure you have the information you need to make a confident decision about your next step.

We are thrilled to announce that Muneeb Ahmad, Managing Partner at Just Right Law, has been selected to the 2023 Michigan Super Lawyers list. Super Lawyers, a respected rating service of outstanding lawyers, recognizes only the top attorneys in each state. Each year, their research team evaluates candidates from over 70 practice areas for this honor. Only five percent of lawyers in the state are chosen.

Muneeb M. Ahmad is a highly skilled attorney with 15 years of experience in immigration, active litigation, and transaction law. His practice focuses in various areas of law, including immigration, contracts, employment, real estate, business, and insurance.

In addition to making the Super Lawyers list this year, Mr. Ahmad has made the list each consecutive year since 2021. Previously, he had also been honored with making the Michigan Rising Stars list from 2013 to 2017.

Starting a business in Michigan comes with its fair share of pivotal decisions. Among the most consequential is the type of business entity you opt for. This choice can profoundly impact your venture’s legal, financial, and operational dimensions. At Just Right Law, we pride ourselves on delivering tailored legal solutions that empower our clients to make informed choices​.

Sole Proprietorships

Sole Proprietorships are the most straightforward entities to establish. They require no formal registration, and you can operate under your own name or a DBA. The primary advantage is the ease of starting up and having direct control over business affairs. However, the downside is the unlimited personal liability you bear, coupled with limited avenues for fundraising.

Partnerships

Partnerships, on the other hand, are arrangements between two or more individuals. While some partnerships might necessitate state registration, the essence lies in the mutual agreement. The combined skillsets and resources can be a boon, facilitating shared responsibilities. That said, partners need to be wary of the fact that they could be personally liable for all of the partnership’s debts and the potential for internal disputes.

LLCs

LLCs (Limited Liability Companies) strike a balance between simplicity and formality. To set up an LLC, one must file articles of organization with the state. In addition, you should draft an operating agreement, but there is no requirement to do so or register it with the state. The primary benefit of an LLC is that you will be protected from personal liability for business debts – provided you follow certain formalities. Liability protection is a significant draw, along with management flexibility and possible tax benefits. However, they come with their own set of challenges, including more paperwork than sole proprietorships and potential self-employment taxes.

Corporations

Lastly, Corporations are more complex entities, requiring founders to file Articles of Incorporation, establish bylaws, and appoint directors. They are favored for their limited liability provisions, the ease of raising capital, and the potential for an enduring existence. But they also have their downsides, like the risk of double taxation and a higher regulatory burden.

Call Us Today to Schedule a Free Case Evaluation with a Michigan Business Lawyer

The business entity you choose should align with your vision, risk appetite, and financial considerations. At Just Right Law, our commitment is to ensure your business’s foundational decisions are made with clarity and conviction, rooted in open, honest, and frank communication. To schedule a consultation with a business lawyer in Michigan, call our office today at (248) 519-2313 or contact us online.