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Thread: Can ex-employer sue for liabilty?

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    Can ex-employer sue for liabilty?

    I was employed in sales/admin for about 10 years, and a minority member of the cc that employed me.
    Never had a full leave cycle due to work demands in that period. As a result of a change in direction of the way the company was taking, I resigned, after being threatened by dismissal.
    I had put out "feelers" to existing clients and found that they would happily support me in my own business of the same nature.
    I know that this is against the "fiduciary responsibilty" that I had with the ex-employer, but I had no effective restraint of trade, and the ex-employer refused to de-register me with CIPC, although I asked them to, in writing. They also refute my claim for "accumulated leave" of about 60 days.
    So I started the new business, and am now being sued for the loss of income they suffered as a result of the clients chosing to do business with me.
    My lawyer, who I ran this by, before doing it, said "Go for it" - now I'm faced with "Liability" and having to re-pay them for their losses. This is the only thing I know how to do, to earn an income. Never worked in any other industry.
    What can I do?

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    Diamond Member adrianh's Avatar
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    I don't think that there is an easy answer. It depends on what they do, what you did for them and it depends on what you do now. Did you steal their IP?
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    Platinum Member sterne.law@gmail.com's Avatar
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    What happened to your lawyer?
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Service industry. I merely mentioned that I was going on my own, and some clients were unhappy with ex-employers' service, so they followed.

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    Quote Originally Posted by sterne.law@gmail.com View Post
    What happened to your lawyer?
    Now trying to extricate me from this mess, at great expense to myself....
    Last edited by AlB; 28-Nov-13 at 09:14 AM. Reason: Fat finger syndrome

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    Platinum Member pmbguy's Avatar
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    What does your previous employment contract say? are you in breach?
    It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin

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    Platinum Member sterne.law@gmail.com's Avatar
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    If I understand, you are still a member of the cc?
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Platinum Member sterne.law@gmail.com's Avatar
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    Regarding the leave, you are entitled to recieve your leave pay. The employment relationship is different from the business relationhsip and cant be set off.
    Whether you are entitled to the full 60 days, is dependent upon a number of factors. I will presume its iin your favour on the basis that you were not able to take leave.
    There are a few tactical options if you are still a member of the cc, facts dependent.
    1 - not sure if he filed summons. If so how he referred is important. If you are a member of the cc, you cant sue yourself. (This is a very broad statement and there are many factorss, put in another way, its not impossible to do.)
    2 - you could go on the offensive and apply yo the court for dissolution of cc. This often happens where two partners are in constant disagreement, for instance, and one partner is a 10% share holder, the other 90%, hence the minority shareholder is always veteod, the minor shareholder can apply to court to dissolve the cc. The court will look at all factors and determine what is best (that is, not a guarnatee of dissolution, but perhaps a nice big stick.) There is also the issue ofany profits owed. If you were still an equity partner, then you are entitled to your share.

    On the original issue, re the customers.
    There is no need for him to have a restraint.
    There is a common law obligation, both as 'partner' and as employee, to act in best interests. Whether he has claim or not is dependent on many things.
    The law aside, if I were a customer, and my former supplier got a court order against my new supplier, I would not go back to the old supplier ever. The court though will probably only be asked for damages as compensation, not specific performance (return to me as first supplier.)
    It is unclear what sort of money is involved.
    Cleaalry if he has served summons then your hand is forced.
    If he has not, it may be a case of waiting. The longer he takes the more prejudicial to him by not showing interest. It does however sound like you are engaging in 'litigation by correspondence'.
    I originally asked where your attorney is because he has the facts at his disposal and is better placed to give you an opinion regarding options/risks etc.
    The fact that you posted here, which is fine, suggests that you have lost confidence in your attorney and / or suspect that he is not acting in your best interests and merely looking to make fees. (My thoughts here may be misplaced though.)
    Therefore, the attorney should place before you a proper opinion on the risks, costs (both fees and potential damages) and strategies. [And get him to quote you on this opinion.]
    If you are concerned about the attorney, for what ever reason, then consider making a brief listing of facts, and seek an opinion. This owuld place you in a better posiion to determine teh way forward.

    The plus side, seemingly, is you are doing things right, busines is off to a good enough start to ruffle the opposition.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

  9. Thank given for this post:

    AlB (28-Nov-13), Dave A (28-Nov-13), tec0 (06-Dec-13)

  10. #9
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    Quote Originally Posted by pmbguy View Post
    What does your previous employment contract say? are you in breach?
    Not in breach of employment contract, but in a provision in the CC act that I have a "fiduciary responsibility" towards the CC. I had asked ex-employer to be removed as a member before going ahead with my plans, but they refused to do so.

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    Quote Originally Posted by sterne.law@gmail.com View Post
    If I understand, you are still a member of the cc?
    Yes. I had asked ex-employer to be removed as a member before going ahead with my plans, but they refused to do so.

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