Business Tort Attorneys in Saratoga, CA
Protecting companies from unfair competition and interference throughout Silicon Valley.
Request a Free Consultation →What to Do in the First 48 Hours
- 1 Preserve everything before you do anything else.
- 2 Do not wipe or reissue the departing employee's laptop or phone, and do not close their email account.
- 3 Tell your IT people in writing to preserve logs and backups rather than following the usual offboarding routine.
- 4 Write down what you know and when you learned it.
- 5 Do not send an angry message to the person or their new employer, because that message will be read aloud in a deposition and it rarely helps.
- 6 Then call us. Whether emergency relief is available usually depends on evidence that exists right now and will not exist in two weeks.
Understanding Business Torts in California
Business torts are wrongful acts, outside of any contract, that cause economic harm to a company or its relationships.
Unlike breach of contract, these claims don't require a direct agreement between the parties; they arise from independent duties not to unfairly interfere with a business's operations, relationships, or competitive position.
A recurring set of business torts accounts for most of these claims.
Common business torts include:
- Tortious interference with contract or prospective economic advantage.
- Unfair competition.
- Misappropriation of trade secrets.
- Defamation that damages a company's reputation.
These claims frequently arise when a former employee, competitor, or business partner acts to undermine a company from the outside, or from the inside on their way out.
Because business torts often involve fast-moving harm, early legal intervention can be critical.
A poached client, a leaked trade secret, or a sabotaged deal can escalate quickly, making injunctive relief essential to stopping the damage before it becomes irreversible.
What Our Business Tort Attorneys Do
Business Tort FAQs
Tortious interference occurs when a third party, not a party to your contract, intentionally disrupts your contractual or business relationship, causing you economic harm. California treats interference with an existing, fixed-term contract differently from interference with a merely prospective relationship, and that difference is usually the first question in the case. See the next question for what that means in practice.
Yes, and it is usually the difference that decides these cases. If someone intentionally causes another party to break a contract with you that ran for a fixed term, that interference is treated as a wrong in itself. If instead they cost you a relationship you merely expected to form or to continue, a prospective customer, a deal that had not closed, California requires more. You have to show the competitor did something independently wrongful, meaning something unlawful in its own right, and not just that they competed hard or wanted your business. Courts have been explicit that an improper motive alone is not enough.
"To establish a claim for interference with prospective economic advantage, therefore, a plaintiff must plead that the defendant engaged in an independently wrongful act." An act is independently wrongful "if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard."Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134
One wrinkle matters more in business than most people expect. If your contract could be terminated at will by either side, California treats it much more like a prospective relationship than like a fixed-term contract, and the independently wrongful act requirement applies there as well.
"We recognize that in an at-will contract, the parties' expectations are of continuity unless one party terminates the contract, whereas the expectations of a continued relationship are more speculative where no contract exists. But from the perspective of third parties, there is no legal basis in either case to expect the continuity of the relationship or to make decisions in reliance on the relationship."Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130
Because so many commercial arrangements are terminable at will, supply terms, distribution deals, month-to-month vendor relationships, this is frequently the first thing that determines whether a claim works. In practice this is why our first questions are not about what you lost. They are what the contract actually said about termination, and what the other side actually did to win your business away. Misrepresentation, use of your trade secrets, or inducing someone to breach a duty they owed you will support a claim. Aggressive but lawful competition generally will not.
It depends. Legitimate competition is not actionable, but if a competitor used wrongful means, such as misrepresentation, trade secret theft, or interference with an existing contract, to take your client, you may have a valid claim for tortious interference or unfair competition.
A trade secret is information, such as a customer list, formula, process, or business strategy, that derives independent economic value from not being generally known, and that is the subject of reasonable efforts to keep it secret, such as confidentiality agreements and restricted access. Reverse engineering or independently deriving the information on your own is not, by itself, an improper way to obtain it.
If the client list qualifies as a trade secret and reasonable steps were taken to protect it, you can pursue a claim under the California Uniform Trade Secrets Act, seeking an injunction to stop its use, damages for resulting losses, and if the misappropriation is willful and malicious, exemplary damages and an award of attorney's fees under the Act.
Yes, and speed matters. Preserve everything before you do anything else, and see the section above on the first 48 hours. When a business tort is causing immediate, irreparable harm, such as a competitor using your trade secrets or a former partner soliciting your clients in violation of a duty, California courts can issue a temporary restraining order or preliminary injunction to halt the conduct while the case proceeds.
California's Unfair Competition Law broadly prohibits unlawful, unfair, or fraudulent business practices, allowing businesses harmed by a competitor's improper conduct to seek injunctive relief and, in some cases, restitution.
Available remedies depend on the specific claim and may include lost profits, compensation for harm to goodwill or reputation, restitution or other equitable relief where authorized, and injunctive relief. Certain intentional torts may also support punitive damages.
Business tort claims often require moving quickly to preserve evidence and stop ongoing harm, along with proving wrongful conduct and calculating complex damages like lost profits and goodwill. An experienced business litigation attorney can act fast to protect your company's interests.
It depends on what they used to do it. If they took your client list or other confidential information to solicit your customers, that supports a trade secrets claim. If they simply told former customers where they went, and those customers chose to follow, that is often lawful competition. What they took and how they used it decides which side of the line you are on.
Possibly, through an injunction, but California disfavors broad non-solicitation restrictions on former employees. Your stronger footing is usually a trade secrets or breach of duty claim tied to specific wrongful conduct, such as using a stolen client list, rather than an attempt to stop lawful competition outright.
It can be, if the statements are false and made to customers or business partners, potentially supporting claims for trade libel or unfair competition alongside interference if it costs you a specific deal or relationship. Opinion and puffery are generally not actionable; specific false statements of fact usually are. We look at what exactly was said, to whom, and what it cost you.
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What Our Clients Say
Results depend on the specific facts and law of each matter. Prior results do not guarantee or predict a similar outcome in any other case.