Protecting Company Secrets

Protecting company secrets is a big business these days. Those who sell secrets may be in hot water legally.

“There likely isn’t one business or industry that doesn’t have secrets about how they do business and about their products that they don’t want spread all over the place. After all if you are in business and want to stay a leader, you want to protect your products, methods, techniques and inventions from your competition and the public at large,” outlined Seth Wilburn, of the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer.

The fact is that many companies go through unbelievable contortions to protect their trade secrets and have been known to take legal action against people who have sold those secrets (on purpose) or accidently gave away critical information about how business is conducted. Stealing trade secrets is definitely classified as unfair competition; a slap in the face of the ‘usual’ way business is to be done in the marketplace.

“It’s generally accepted in the marketplace that businesses competing for the same customers are expected to use fair assessment of the market, their product, and assess the buying trends of customers; not lie, cheat, steal, manipulate and resort to spying to get what they want,” added Wilburn. “In fact, the Uniform Trade Secrets Act was created to offer protection against getting ahold of formulas, devices, methods, product secrets and techniques, and other business assets by improper methods – meaning stealing,” he explained.

The Act outlines several things that are considered to be “improper” and they include, electronic spying, or spying by any other means, breach of duty, misrepresentation, bribery, theft and inducement of a breach of duty. Those definitions are intentionally broad, as stealing company secrets can take place in many, sometimes bizarre ways.

It goes without saying that if the person who sells the “secrets” they stole and makes money from that transaction, then it is definitely unfair competition. Under the Act there is a section on punishment if the benefit the thief derived was actual cash or the potential to make money.

Here is another thing that not too many people realize: infringing on a secret may also have punitive damages assigned, including financial damages, royalties and shared profits. The court may also grant an injunction forcing a firm to stop selling anything they got or created as the result of stolen trade secrets,” Wilburn explained. Additionally, recoverable damages may also include loss of revenue as a result of the theft of secrets and come with penalties for the person being unjustly enriched because they stole something.

“This is an interesting area of the law, and if you have had trade secrets purloined from your company, you may want to find out what your rights are and what can be done to protect your company from the resulting loss,” added Seth Wilburn, of the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer.

Gomez Law Group is a Dallas employment lawyer and Dallas business lawyer. To learn more, visit http://www.gomezlawyers.com.

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Broad Non-Competition Agreements a Problem

The broader a non-competition agreement is, the more problems there are enforcing it.

“Typically speaking, if you have a really broad non-competition clause in your employment contract with a worker, the less enforceable it is. If however an employee has access to trade secrets, highly confidential company information and gets paid extra money for the non-compete clause, you have a better chance enforcing it in court,” said Seth Wilburn, of the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer.

In order to be able to actually enforce a non-compete agreement, the employer/company must have a legitimate business interest that needs protecting. This interest needs to be more than just the threat of competition. “It should include proprietary information about the company and/or products, the protection of company trade secrets and insider information on competitive positioning. This insider information may give an employee an unfair advantage,” commented Wilburn.

Having an unfair advantage is about more than just competition and the non-competition agreement. The agreement may come under attack if the worker does not use the actual trade secrets he knows, but just admits to having general knowledge of things he has learned.

The other issue in many non-competition contracts is soliciting customers. Some companies write in a clause in the contract that bans a worker from offering services or contacting customers that are currently with the company. “It’s interesting to note that the courts are more likely to enforce a non-solicitation clause than they are to uphold a no contact or no service clause. The reason for this is that the court regards those two clauses are being anti-trust violations and therefore anti-competitive because it doesn’t give the customer a choice,” Seth Wilburn of the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer added.

When it comes right down to it, distinguishing between non-solicitation and solicitation is somewhat difficult largely because it is subjective. In some cases it would be obvious if there was solicitation particularly if a phone call or letter were involved. However, advertising in the paper isn’t considered to be solicitation – because it gives consumers a choice.

“If you have questions about a non-competition agreement you signed, specifically if it’s enforceable, talk to a skilled business lawyer to get honest answers,” said Wilburn.

Gomez Law Group is a Dallas employment lawyer and Dallas business lawyer. To learn more, visit http://www.gomezlawyers.com.

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Real Estate Mortgage Fraud

In tough economic times, real estate mortgage fraud generally increases. It’s a good time to buy, but buyer beware.

Generally speaking, most people are honest and play it straight when it comes to dealing with mortgages. However, having said that, there are crooked mortgage brokers, cheating home buyers, dishonest real estate agents and brokers, and less than honest real estate investors. If you have the misfortune to run across one or more of these individuals, you may be in trouble; something you want to avoid.

Right now financing is fairly easy to secure in order to take advantage of some good deals on homes, but buyers need to beware of getting into hot water. If a buyer gets a loan, they can get some super deals right now. However, can they get that loan? It seems some buyers make up the numbers or take other risks to get the money, and while that doesn’t sound like such a big sin, it is mortgage fraud. Other ways you can commit mortgage fraud are to take money out of the bank and pay off a debt, but not tell the lender; buy a vehicle just before the loan closes and say nothing about it and/or get more credit for something/anything and don’t tell anyone.

Other ways that fraud happens is when a buyer makes any kind of an agreement the bank doesn’t know about (called a side agreement); when an adjustment is made at closing and isn’t shown on the HUD-1 settlement statement; or when part of a down payment/closing costs comes from sweat equity.

There are so many things that constitute mortgage fraud, it may surprise you, simply because you didn’t stop to think about things like the fact that you borrowed part of the down payment, you quit or started a new job and said nothing to the bank, or if you don’t actually move into the house after you have certified to the bank you are intending to be an owner/occupant.

Mortgage fraud is really easy to do but not so easy to reverse and the Real Estate Settlement Procedures Act is painfully clear on how a closing is to proceed, even more so with one that is subject to financing. The bottom line is that “any” statement you make to the bank which isn’t the whole truth and nothing but the truth has the potential to be considered fraudulent. This includes changes in your health, racking up high medical bills, or buying that dream car and not mentioning it.

Just as an increase in salary needs to be reported, so does a decrease. This applies on those loans aimed at low income buyers. It’s clear that if the borrower makes more than the limit allowed, he doesn’t get the loan. Even if you get a major hike in salary just before you close, you need to tell the bank that as well.

At each stage of the process of getting a loan and buying a house, there are many opportunities to be dishonest and just as many to get ripped off by someone else. If you have questions about the process, have been ripped off or have been accused of mortgage fraud, you will want to speak to a competent lawyer and find out what your rights are and what you can do.

Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

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Qui Tam Fraud

Not many people know what Qui Tam is or what it means. It’s a branch of law that protects the government.

Qui Tam refers to a set of rules that lets people blow the whistle (a.k.a. Whistleblower legislation) on those who try to defraud the government. The fraud committed would violate the False Claims Act and those who do step forward and speak up about the illegal doings of others are often called relators. The plaintiff/relator may then bring a lawsuit on behalf of the US government. It’s important to note that none of this takes place unless the defendant has “knowingly” committed fraudulent acts against the government.

You’d be right if you guessed that cases like this are tough to prove, tough to pursue in the courts and tough on which to collect. However, having said that, for those that choose to stay the course, the rewards are often fairly lucrative, since in the event of a case win, the plaintiff gets to collect a relatively large amount of cash based on the total judgment.

The main benefits of Qui Tam law are that it protects the government when someone has been ripping them off, allows recovery of the ill gotten funds on behalf of the government, and pays quite well in the long run. If people didn’t come forward to report on other individuals who were cheating the government out of millions of dollars, there would be a whole lot of tax money washing away down the drain.

While you might think that the whistleblower would be in a tough spot for ratting someone out, the Qui Tam law protects the relator and makes it illegal to harass, fire, demote or otherwise create problems for the individual. They are also accorded some level of privacy relating to their identity. This law is applicable in all states and in various different forms, and if you are in a situation where you have evidence of fraud against the government, speak to an experienced attorney to find out what the whistleblower legislation says in your state.

Generally speaking, there is a fairly broad range of areas in which Qui Tam actions are filed, and they include Medicare fraud (billing for services not rendered); postal service fraud (faking the weight of parcels to not pay the full amount to the post office for services rendered); student loan fraud (lying to get more federal funds); and customs fraud (lying about the value of items being shipped).

If you have questions about Qui Tam law and how it may affect you if you do file a lawsuit, speak to a skilled attorney who will be able to answer your questions and outline what happens at every stage of the process.

Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

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