How to Protect Your Company Against an Unfair Competition Lawsuit
06/22/2020 3:12 pm

Unfair competition laws in New Jersey are designed to prevent one party from obtaining an unfair advantage over another party. A legal issue that typically arises within commercial business dealings, unfair competition can include a number of issues, including trademark infringement, false advertising, dubious employment agreements, and trade secret misappropriation. All companies - regardless of their size or industry - can be susceptible to unfair competition lawsuits. Because commercial litigation is often costly and results in significant consequences for a company’s long-term growth strategy, taking steps to protect your company from liability is crucial. Fortunately, there are a number of approaches and legal instruments companies can put in place in order to safeguard against an unfair competition lawsuit. 

Unfair Competition Litigation

Unfair competition lawsuits can arise for companies from either side of the offense. Some companies may find that a competitor is acting in a manner that irrevocably alters their ability to perform well in the market. Others may find they are being pursued for violating unfair competition laws in their state. Furthermore, litigation can become costly when such vital matters, such as your company’s core business strategies or trade secrets, are at stake. Fortunately, companies can mitigate their exposure to these complex commercial litigation matters by putting an effective liability shield in place. 

Ironically, unfair competition issues are most likely to arise once a company’s stature in the marketplace has risen to meteoric heights. Competitors are often more likely to derail your growth, stymie your marketing strategy, or poach your highest performing employees when it becomes clear that you’re doing something right. A commercial litigation practitioner with experience navigating unfair competition claims can assist with the development of internal and external legal documents and strategies that will minimize the risk of unfair competition. 

Protecting Yourself

Taking proactive steps to help prevent unfair competition litigation is one of the most effective approaches to minimize the risk of litigation and success at trial should an issue arise. Companies expose themselves to risk of unfair competition at any point in their dealings with third parties. Relationships with employees, sales and marketing partners, and customers and clients can all amount to unfair competition issues if lines aren’t drawn from the outset of your working relationship.

Some of the most common legal instruments used to combat the risk of unfair competition lawsuits include:

  • Non-disclosure agreements: An NDA outlines confidential material, knowledge, or information that parties wish to share with one another while restricting access to that information.

  • Non-solicitation agreements: These agreements prevent the signing party from soliciting clients, customers, and other business relationships that the other party currently enjoys.

  • Employee confidentiality agreements: These agreements are designed to ensure employees keep confidential any and all corporate information.

  • Non-compete agreements: Non-compete agreements prevent employees from going to work for a competitor, typically located within a certain mile radius.

  • Third party confidentiality agreements: These agreements are especially useful when soliciting new business from third parties, or for protecting trade secrets.

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