So I started my business, and my former employer sued me…

At the Vethan Law Firm,
PC we deal with a few of what we call “template situations.”  One of those, which is not the subject of our
discussion is the “business divorce.” 
That is the implosion of a family owned business through internal strife
and litigation.  The subject of today’s
entry however, is just as common.  You
work in an industry for years developing your experience and knowledge and
finally you decide to strike out on your own. 
Sometimes the decision is made for you because you have been fired, laid
off, or more commonly constructively discharged, but in any situation you have
decided to strike out on your own.
As is often the case,
if you have the knowledge and experience to open your own shop, no matter the
industry, then you are a valuable asset to an employer.  And often, former employers do not take
kindly to valued assets becoming the competition.  And so you get sued.  You are going to get sued for a couple of
things, which are quite often bundled together in one neat package: breach of
fiduciary duty (depending on your former position), breach of non-competition
agreement (if you had a non-compete contract), misappropriation of trade
secrets (if you knew anything of value), tortious interference (if any clients
decide to use your new business), and civil conspiracy to do all of the above
(if you left with others as well).
The first thing you need
to realize which you may very well already know is that some egos bruise
easily.  The second thing you need to
realize is that a company is most vulnerable in their infancy.
You have been served
with what is known as a “Strike Suit.” 
Most commonly a Strike Suit, is a zero merit law suit that attempts to
squeeze a settlement out of a Defendant simply because the cost to settle is
lower than the cost to defend.  In your
situation the Strike Suit is a zero merit lawsuit filed, not with the intent to
squeeze out a settlement, but with the intent of bleeding your business of its
startup capital and scaring off your potential clients and investors.
There may be animosity
between you and your former employer and that will fuel the litigation.  But the real goal is to keep you from
competing with them.  You need to
remember that they are suing you because you are a threat.
If you are planning on
leaving an employer to set up shop you ought to have counsel to help craft any
severance agreement.  But choosing effective
counsel the moment you are sued is vital. 
It may just be what saves your startup from failing.  It is commonly said that the ultimate revenge
in the business world is success.  It is
time for revenge.