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Let's say a CPA works in New York for Company A and wants to go out on
his own and open his own accounting firm. Can he, while still working
for Company A, begin (discreetly) soliciting clients to come with him
when he leaves Company A? What are the ethical and legal dangers here
assuming he has not signed any sort of non-compete agreement? Can he
be sued (successfully) for this by Company A?
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jcasey wrote:
Let's say a CPA works in New York for Company A and wants to go out on
his own and open his own accounting firm. Can he, while still working
for Company A, begin (discreetly) soliciting clients to come with him
when he leaves Company A? What are the ethical and legal dangers here
assuming he has not signed any sort of non-compete agreement? Can he
be sued (successfully) for this by Company A?
I do not give legal advice, only opinions.
It's done every day of the year.
Anybody can sue for anything. Winning the case is another matter.
Most non-compete clauses are either improperly written, to restrictive, or
plain outright illegal.
If the CPA is wanting to go on his own, go for it.
Because he happens to know who the clients are of Company A, then contacts
them later after on his own, that's what I call competing for business.
Company A may not like it, but hey, how did company A get in business eh?
You think the original beginnings had clients lined up waiting to sign up on
day one?
Maybe the boss of company A did the same thing his employee is wanting to
do.
Go for it.
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"jcasey" <jcasey4444@yahoo.com> wrote
Let's say a CPA works in New York for Company A and wants to go out on
his own and open his own accounting firm. Can he, while still working
for Company A, begin (discreetly) soliciting clients to come with him
when he leaves Company A?
I wouldn't recommend it while on the clock of Company A. Placing feelers is
OK, and contacting your former clients, directly or indirectly, after you
left Company A's employment if also acceptable.
What are the ethical and legal dangers here assuming
he has not signed any sort of non-compete agreement?
The main problem to be faced is when a "good friend" of Company A's owner
files a complaint against you with the state accounting board.
Can he be sued (successfully) for this by Company A?
He can absolutely be sued. Who wins isn't the point, because it takes a lot
away from developing, keeping, and conducting business. The point would be
to avoid the courtroom.
If you are good to your clients, they will leave "A" and go with you in due
time.
One word of advice, do what is right for the client, period.
--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net
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jcasey4444@yahoo.com (jcasey) wrote in message news:<871d4272.0411301713.203979d5@posting.google.com>...
Let's say a CPA works in New York for Company A and wants to go out on
his own and open his own accounting firm. Can he, while still working
for Company A, begin (discreetly) soliciting clients to come with him
when he leaves Company A? What are the ethical and legal dangers here
assuming he has not signed any sort of non-compete agreement? Can he
be sued (successfully) for this by Company A?
I should clarify that he is trying to solicit Company A's clients...
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"jcasey" <jcasey4444@yahoo.com> wrote
jcasey4444@yahoo.com (jcasey) wrote
I should clarify that he is trying to solicit Company A's clients...
The two biggest problems you'll have is soliciting clients on company time,
and pissing off the client.
--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net
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jcasey4444@yahoo.com (jcasey) wrote in message news:<871d4272.0411301713.203979d5@posting.google.com>...
Let's say a CPA works in New York for Company A and wants to go out on
his own and open his own accounting firm. Can he, while still working
for Company A, begin (discreetly) soliciting clients to come with him
when he leaves Company A? What are the ethical and legal dangers here
assuming he has not signed any sort of non-compete agreement? Can he
be sued (successfully) for this by Company A?
That's disloyalty to the employer, even in the absence of a
non-compete.
Company A would be within its rights in nailing him to the wall, or at
least terminating him for misconduct and giving him such a
(truthfully) damning reference that he will be forced to go
independent because nobody will hire him after that.
He could leave Company A's employ; then, if there really was no
non-compete, and Company A did not treat their client list as a trade
secret (stupid, but you don't have to be smart to be in business), he
would be free to solicit those clients.
But so long as he is employed, he is obliged to deal with clients only
in his company's interest, and anything else would be grounds for an
immediate sacking.
--
Not a lawyer,
Chris Green
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Let's say a CPA works in New York for Company A and wants to go out
on
his own and open his own accounting firm. Can he, while still
working
for Company A, begin (discreetly) soliciting clients to come with
him
when he leaves Company A? What are the ethical and legal dangers
here
assuming he has not signed any sort of non-compete agreement? Can
he
be sued (successfully) for this by Company A?
Christopher Green's answer is correct, as always. I can only add
emphasis. The duty of loyalty is more than an ethics issue. The CPA
in this case can be successfully sued for breach of the duty of
loyalty. In the case of a non-officer, non-director, the suit may be
in some form other than breach of fiduciary duty. It may be couched
in terms of unfair competition, conversion of company resources,
interference with contracts, interference with economic relations,
infringement of trade secrets. But regardless of what it's called,
it's a viable lawsuit. And, it exposes all of the allegations to the
public. This cpa should not even tell any potential clients that he
is going out on your own, until after resignation and departure.
McGyver
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mmmm..an unethical CPA. What is the world coming to!!
Christopher Green's answer is correct, as always. I can only add
emphasis. The duty of loyalty is more than an ethics issue. The CPA
in this case can be successfully sued for breach of the duty of
loyalty. In the case of a non-officer, non-director, the suit may be
in some form other than breach of fiduciary duty. It may be couched
in terms of unfair competition, conversion of company resources,
interference with contracts, interference with economic relations,
infringement of trade secrets. But regardless of what it's called,
it's a viable lawsuit. And, it exposes all of the allegations to the
public. This cpa should not even tell any potential clients that he
is going out on your own, until after resignation and departure.
McGyver
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