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Cease and Desist Letters

I Received a Cease and Desist Letter. Now What?

Cease and desist letters are a shock to receive because the language is often harsh. They often speak to something you may be doing or participating in or contributing to in some way. The threats and alleged consequences of proceeding can be, or at least sound, severe. The legalese, cases or statutes list in the letter make them hard for the average working person to process rationally. A rushed Google search comes next. Way too much information is available. Now what?

We have read and/or written thousands of cease and desist letters. They are to be taken seriously. They are also to be taken with more than a few grains of salt in most cases because the allegations and threats are often exaggerated. The threats are exaggerated because the senders want you to do what they want, which is simply stop what you’re doing now. But stopping what you are doing in every aspect mentioned might mean discontinuing to work for your new employer. The consequences of proceeding may be even more personal. It may sound like you need to not start your own business. But you have bills to pay.

Unless you have experience dealing with cease and desist letters, it’s important to get a consultation for a qualified employment attorney immediately when the letter relates to your work. Prompt sound advice is necessary. A consultation with an employment attorney is critical if you received the letter late (while on vacation after leaving a job, for example) and there is a deadline to comply with (e.g. “Cease and desist this activity or we will file a lawsuit by February 1.”)

Cease and desist letters often arrive after you leave one place of employment and start your own business or start working with another company. Cease and desist letters are more common when you have important information from your last job that helps your new employer compete with the former employer. The following are examples of what you might encounter.

Example 1 - Cease and Desist Letter Received While Working for a Competitor: Employee worked for a wine sales and distribution company in Napa, California. While working for the Napa employer, employee made contact with commercial wine purchasers for local restaurants in the greater San Francisco Bay Area. Employee receives an offer to work with a different wine sales and distribution company in Sonoma, California. He accepts the new position. After working for the Sonoma company for three weeks, he receives a cease and desist letter from the Napa company stating that he is not to contact any of the wine purchasers he made contact with while working for the Napa company. Employee should notify the Sonoma employer of the letter immediately and get a free consultation with an employment attorney to see how to move forward. In these situations, it is likely that the current employer will have their own attorney since both the employee and the company have to take their legal obligations seriously, both independently and collectively.

Example 2 – Cease and Desist Letter Received After Changing Work Industries: Same facts as Example 1 above, except that instead of working for a wine selling competitor in Sonoma, the salesperson starts working for an artisan cheese distribution company in Sonoma. Employee receives a cease and desist letter from Napa wine selling company. Employee should still immediately notify his current employer and get a consultation from an employment attorney because Napa wine seller is most likely concerned that employee took customer information with him to the new job. Employee and new employer, possibly through their attorneys, should work out a way to continue conducting work without using Napa wine seller’s customer data.

California has a general rule against non-compete clauses in contracts, including cease and desist letters that attempt to discourage competition. Each scenario is fact specific. The best way forward is to seek advice from a qualified employment attorney familiar with non-compete law.

We are happy to provide you and/or your business partners with a free consultation on your rights and obligations for complying with a cease and desist letter. If you are an employee in Oakland or the greater San Francisco Bay Area, call now to discuss your options.

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