What to Do When Your Competition Isn’t Playing Fair

on April 28, 2014 by James Hunt

 

It is amazing just how long businesses have been trying to get the better of their competition. All the way back in the fifteenth century, interference with the master-servant relationship by improper means was recognized by the English courts as improper and illegal. The rule was later expanded to cover any interference with a business’s efforts to earn a livelihood. Even during this formative period, there was no requirement that the interference be with an existing customer; it also included potential customers.

In the nineteenth century, English courts identified two main legal tenets. First, an intentional and “malicious” interference with an actual contract was declared illegal, even if the means used to induce the breach of contract were not impermissible. Second, it was also illegal to try to “steal” prospective or potential business relationships. In other words, the law draws a line beyond which no member of the community may go in intentionally intermeddling with someone else’s business affairs.

Jim Hunt2

With this back drop, modern law imposes liability on someone who induces or persuades another to break a contract. The primary right of the injured business is to have the benefit of a contract and to remain undisturbed in the performance of it is universally recognized. Such a right can lawfully be interfered with only by one who is acting in the exercise of an equal or superior right which comes in conflict with the other. An intentional interference with such a right, without lawful justification, is malicious in law, even if it is from good motives and without express malice.

Today, the  essential elements  that support a tortious interference claim include:

1.         Existence of a valid contractual relationship or business expectancy;

2.         Knowledge of that relationship by the interferer;

3.         Intentional interference inducing or causing termination of the relationship or expectancy, and

4.         Resulting damage.

Perhaps the most common version of this business tort is when a competitor hires away a business’s employees. After hiring the former employees, the former employees, on behalf of their new employer, contact and retain their prior customers.

Interference can be “wrongful” by reason of a statute or other regulation, a recognized rule of common law, or an established standard of trade or profession. Therefore, a plaintiff must show not only that the defendant intentionally interfered with his business relationship, but also that the defendant had a duty of non-interference; meaning, he interfered for an improper purpose or used improper means.

So when your business is faced with a competitor stealing employees or customers, there is a remedy. Do not let a competitor take your hard work and use it for their profit. Our attorneys are experienced at litigating unfair competition tactics in the trial courts.

The legal team at Slater, Tenaglia, Fritz & Hunt, P.A. consists of experienced attorneys and dedicated staff. We use advanced technology to benefit our clients. We are committed to providing aggressive representation of our clients’ rights while delivering first-class customer service. We can be contacted by phone at (201) 820-6001 in New Jersey or (212) 692-0200 in New York. We can also be found on the Internet, Facebook, Linkedin, Twitter, Google+ and Youtube. And remember, all initial consultations are complimentary.