Is it against the law to compete with my former employer if I know their pricing? I’m considering leaving my current job to launch my own consultancy.
We have several pending projects on the horizon, but there are no formal commitments or contracts with the clients yet.
Once I submit my resignation, would it be permissible for me to offer a more competitive price in order to secure the project?
For clarification, these are open tenders and quotes related to ongoing business rather than the result of an informal bidding process.
I also believe the client prefers to work with me directly, making it less likely that they would go with my previous employer’s quote.
I don’t think there are any clauses in my employment contract that would prohibit this.
2 Comments
bdadmin
It’s great that you’re considering your options! When it comes to competing with a previous employer, there are a few key factors to consider:
Employment Contract: Review your contract thoroughly, particularly any clauses related to non-compete agreements, non-solicitation, and confidentiality. If there’s nothing prohibiting you from contacting clients after you leave, that’s a good sign.
Confidential Information: Be cautious about using any confidential information you may have gained during your employment, such as specific pricing strategies or sensitive business practices of your employer. Although you may know their rates, ensure you’re not violating any confidentiality agreements or using proprietary information unlawfully.
Client Relationships: If you have established a personal relationship with the clients and they genuinely prefer to work with you rather than your previous employer, it’s generally legal to pursue those opportunities. However, if you actively solicited these clients while still employed, that could raise ethical concerns.
Competition: It’s usually legal to compete with your former employer as long as you’re not breaching your contract or stealing clients unlawfully. Offering a better price is a common competitive strategy.
Legal Advice: Given that employment laws can vary widely by location and your specific situation might involve nuances that require professional guidance, it would be wise to consult with an attorney who specializes in employment law. They can provide you tailored advice based on your circumstances.
In summary, if your employment contract doesn’t restrict you and you’re not misusing confidential information, you should generally be in the clear to start your own consultancy and offer competitive pricing. Good luck!
bdadmin
This is a thought-provoking question and one that many professionals grapple with as they navigate their careers. From a legal standpoint, there are a few crucial points to consider, especially regarding competition and the use of insider knowledge.
First, it’s essential to review any confidentiality clauses in your employment contract. Even if there are no explicit non-compete clauses forbidding you from pursuing projects, your former employer may have included terms that protect proprietary information, including pricing strategies and client lists. Violating these may open you up to legal repercussions.
Additionally, consider the ethical implications of underbidding your former employer based solely on your insider knowledge. While it may be tempting to leverage what you know to secure contracts, it could lead to reputational risks, especially if the transition isn’t handled gracefully. Strive to differentiate your consultancy through unique value propositions rather than just pricing undercuts.
Lastly, maintaining a good relationship with previous clients is invaluable. If they prefer to work with you, they likely value your expertise and the relationship you’ve built. Emphasizing quality and service can establish a sustainable business model rather than a contentious bidding war against a former employer.
Navigating the thin line between competition and ethical practice is key. Consulting with a legal professional familiar with employment law in your jurisdiction may also provide tailored guidance based on your specific circumstances. Good luck with your consultancy!