I need some serious advice about a business situation

[Bojangles69]

I'm gonna keep names and specifics anonymous because theres an investigation going on but this is the deal.

A company that sells a service (on avg $8,000-$15,000 a job) has found out that one of their employees was going on leads (to sell/contract a job) and selling the leads outside the company, subing it out to men on the side for a MUCH lower price which made it easier to sell and also created larger commisions.

The guy who was doing it said he only did it because the company providing the leads was charging too much and rather then walk away from no sale, got an outside crew to do the work much cheaper. But then the company who provides the lead assumes it just didn't sell.

This I guess is a violation of "intellectual property".
The owner of the company has sent a letter to 3 of his employees (one my brother) saying he sat down with his attorney, a local lieutenant (not putting names) and an IRS agent.
They all said they're willing to help investigate and will press criminal and civil charges.

This was from the letter:
"A letter is being drawn up by our attorney today that will be sent to all of the people that we performed an inspection for in the past 7 months. We will be informing these people of what happened & offer them an incentive to come forward. When the people do come forward, & we are confident some will, we will start to move forward with both criminal & civil charges. We are already in this process with the few people that we know about."


Now the issue. My brother did one job on the side 3 weeks back.
He doesn't know whether the owners calling a bluff or not.

The owner said if people come forward now he'll just fire them and not press charges.
My brother has no idea what to do and I don't wanna see some shit go down. I was telling him to send a letter first to the people (before they get the attorneys letter) he sold this job too telling them they might get a letter in the mail from his company (the attorney) which is a scam to generate leads and to ignore it.

What I'm curious about first, is who the hell actually presses charges for stealing "intellectual property"?
Second, the people might just get the letter and throw it away.

Or it might not be a bluff, they get the letter and my brothers fvcked. Sure he shouldnt have done it but the company was not getting the job at the price they require, so they wouldn't have sold it either way.

My question, what would you do?

[higherdesire]

It is theft of proprietary information. It is definately punishable both criminal and civil.

First thing first, your brother made a very bad choice. He broke the law and compromised his integrity and sacrificed his loyalty. He is damaged goods.

Now my input. If in fact they had already consulted an attorney the attorney would have sent out a demand letter most likely. Demanding compliance with certain criteria or 'else', fill in the blank there. I would remain mum because in all likelihood they will not pursue civil charges because of the plausible recovery from people who have to steal for a living being negligible. There are generally diminished returns especially for one case, and each would have to be individually tried. They may choose to pursue someone who has multiple offenses from whom they can reasonably expect to recover substantial funds including attorneys fees.

Lastly the chances of having a single action of this kind rise to criminal negligence in a court of law is almost non existent. He would have to plea for the DA to pursue. If it is misdemeanor the risk are obviously worth it.

OFr the record that company spent the money ot advertise and develop the lead then they own it and it is up to them to decide if they pass on the deal or negotiate it, but for an employee to exploit the companies efforts and monies for personal gain in unacceptable. Shame on him and the others.

[Bojangles69]

It is theft of proprietary information. It is definately punishable both criminal and civil.

First thing first, your brother made a very bad choice. He broke the law and compromised his integrity and sacrificed his loyalty. He is damaged goods.

Now my input. If in fact they had already consulted an attorney the attorney would have sent out a demand letter most likely. Demanding compliance with certain criteria or 'else', fill in the blank there. I would remain mum because in all likelihood they will not pursue civil charges because of the plausible recovery from people who have to steal for a living being negligible. There are generally diminished returns especially for one case, and each would have to be individually tried. They may choose to pursue someone who has multiple offenses from whom they can reasonably expect to recover substantial funds including attorneys fees.

Lastly the chances of having a single action of this kind rise to criminal negligence in a court of law is almost non existent. He would have to plea for the DA to pursue. If it is misdemeanor the risk are obviously worth it.

OFr the record that company spent the money ot advertise and develop the lead then they own it and it is up to them to decide if they pass on the deal or negotiate it, but for an employee to exploit the companies efforts and monies for personal gain in unacceptable. Shame on him and the others.

Ok thats def what I'm gonna tell him because I was already leaning in that direction.
I know its wrong, but sales is full of shisty people, and everyone who worked for the company had sold at least one job on the side.
We're getting the guy who got caught on the phone right now with the owner on 3way/speaker muted so the owner doesn't know we're listening in.

But thanks a lot, a lot of great points I never considered.

[gixxerboy1]

He probably also signed a non-compete agreement. They can go after him on that also.

[Bojangles69]

He probably also signed a non-compete agreement. They can go after him on that also.

Yep he did.
I'm just thinking this is a scare tactic to feel out the workers he has left and see if any of them crumble under pressure and confess.

I did just find out though that this was a setup and the owner had apparently been sending his contractors on fake leads just for this purpose.
I'm still trying to look at it logically and I'm thinking at this point the most logical thing to do would be to clean house and fire everyone rather the press charges.
The company is already under near collapse and if hes trying to save it I'm not sure paying attorneys is going to make anything better. I've always assumed its best to just deny everything no matter what, so we'll see how things pan out.