The Blog

Fair vs. Unfair Competition

The Need for Fair Competition

We live in a great country and a great state. Both are built on a free market economy based on supply and demand. This valued and fundamental policy of “free market” is built into California law. Therefore, any agreement by which “anyone is restrained from engaging in any lawful profession, trade, or business of any kind” is “void.” Not “voidable” but void as if it never existed in the first place.

Protection Against Unfair Competition

But these days employees jump ship to a competitor or start their own competing business and steal your clients, raid your employees, and use your business secrets against you. For California employers trying to protect their businesses, this has been challenging. With an increasingly mobile, information-based workforce, the problem is accelerating.

So is there such a thing as “unfair competition?” Yes. Is the line between fair and unfair competition clear? No.

Generally speaking, the following can be seen as acts of unfair competition:

  • Misappropriation of trade secrets
  • Breach of a confidentiality or non-disclosure agreement
  • Breach of a very narrowly drawn non-solicitation of clients/customers and/or employees agreement
  • Torts, including interference with contract and interference with prospective economic advantage

Business & Professions Code 17200

California law provides for a “representative” unfair competition claim based on “any unlawful, unfair or fraudulent business act or practice.” Under this law, any violation of law can be the basis for a 17200 claim. For example, violations of California wage and hour laws, including the failure to provide rest or meal periods, to provide itemized wage statements and/or to pay overtime have been popular subjects of 17200 actions since 2000. While recent legislation has tightened the legal requirements for bringing such representative actions in line with “class action” requirements, 17200 actions continue to be brought in California courts. The statute of limitations on such actions is four years.

The employment law attorneys at Vision Law® vigorously represent employers in unfair competition claims either because a competitor has engaged in unfair competition or because they are wrongfully accused of unfair competition.

At the same time, Vision Law® believes employers can save time, money, and unnecessary disruption to their business through effective, proactive efforts. That is why we have created our innovative fee programs for businesses. We invite you to consider how cost-effective representation could save your company millions, or simply save your company.