Unfair Business Practices

A competitor’s unfair business practices can cause tremendous damage to any business and, in worst-case scenarios, can imperil a business’ very survival. Our team has experience helping businesses that face unfair business practices, typically from competitors or former officers, directors or employees. We also defend companies and individuals who have been accused of unfair business practices. Our experience in both prosecuting and defending these claims aids us in developing a specific offensive or defensive case strategy for these disputes. Several of our cases were bet-the-company litigation. Examples of unfair business practices that Protorae Law has handled include:

• Corporate raiding
• Common law and statutory business conspiracies
• Violations of the Virginia Computer Crimes Act
• Misappropriation of trade secrets
• Tortious interference with contract or business expectancy
• Breaches of fiduciary duties
• Investors’ efforts to oust a company’s founders
• Collusion, fraud and other forms of unfair competition

In addition to our case experience, we continually work to expand our knowledge and track the development of cases involving unfair business practices, and continue to come up with new ways to prosecute or defend them.

Helping Your Company Prevent Unfair Business Practices:

Experience Matters: When faced with unfair competition, it is crucial to implement a quick and effective strategy to try to stop the unfair business practice and recover damages. We have advised many companies on personalized strategies to combat unfair business practices. Many, but not all, of those strategies have involved filing petitions asking courts for temporary and permanent injunctive relief to immediately stop the unlawful conduct. And, when defending a company in these cases, our familiarity with the underlying laws and pleading requirements helps us develop a comprehensive legal defense early in the case.

Typical Cases:

Corporate Raiding: Corporate raiding occurs when a competitor or former executive induces a large group of business’ employees to resign en masse, usually with the employees taking proprietary information, trade secrets or other intellectual property with them.

Unlawful Interference with Business: The law imposes some limits on what a company can do to compete for new work, particularly when another company already has a contract to perform that work. This claim can take on various forms, such as tortious interference with contract or business expectancy.

Business Conspiracy: Some states have laws that prohibit conspiracies to injure a business when two or more people have a criminal or unlawful purpose or use criminal or unlawful means. Virginia has a statutory business conspiracy statute, Virginia Code § 18.2-499, that makes it unlawful for: “Any two or more persons [to] combine, associate, agree, mutually undertake or concert together for the purpose of (i) willfully and maliciously injuring another in his reputation, trade, business or profession by any means whatever…” An injured business that successfully sues under Virginia’s business conspiracy statute may recover three times its actual damages plus its attorneys’ fees.

Intra-Corporate Disputes: Many types of disputes arise between business co-owners or partners. When those disputes become irreconcilable, legal intervention may become necessary to jump-start the negotiations or even file suit to protect one party’s interests. These disputes often involve one party breaching his or her fiduciary duties to the company or corporation.

Experience Counts

Our litigation team has handled numerous bet-the-company and other high-stakes litigation matters that have gone to a jury or bench trial. We have also resolved numerous disputes through settlement or mediation.  We have handled numerous disputes pending in state and federal courts. Through experience, our attorneys have developed strategies to position unfair business practices matters trial, if needed, or to strike a favorable settlement.  Representative matters our attorneys have handled include:

• Attaining the second highest jury verdict in Virginia for 2015 on behalf of an international telecommunications company who alleged that former employees conspired to access their database of pricing and customer information to benefit their new company.

• Attaining a $10.5 million dollar settlement on behalf of a direct-mail mortgage company, in a Virginia statutory business conspiracy action against the company’s former employees and a start-up competitor. The plaintiff received $10.5 million in settlement and breakup fees as part of a negotiated Letter of Intent that provided for one of the corporate defendants the option of purchasing the plaintiff’s parent company’s assets for $52.5 million or paying the plaintiff $10.5 million.

• Representing the plaintiff corporation, a privately owned university, in a corporate control and ownership dispute against some of the University’s former managers, officers and shareholders. Claims brought against the defendants included Virginia’s statutory business conspiracy, breach of fiduciary duty, tortious interference with business relations and violation of the Virginia Computer Crimes Act.

• Defending a former employee against a $55 million dollar damages claim brought by his former employer in a marketing analytics business in the U.S. District Court for the Eastern District of Virginia. The trial court entered judgment in his favor on four of the five counts, and limited damages for the fifth count to nominal damages. The former employer appealed the district court’s ruling to the U.S. Court of Appeals in the Fourth Circuit where it is currently pending.

• Representing a company that purchased a radio station in an action seeking an injunction preventing the prior owner from using a substantially similar radio format on any radio station heard in the local radio market. As a condition of the sale, the prior owner agreed not to operate a local radio station utilizing a substantially similar programming format as the sold station had used. The court temporarily and permanently enjoined the prior owner from operating a radio station using a substantially similar format after the court found that the prior owner “blatantly violated the agreement.”

• Defending a hair salon owner who started a new business, bringing along several stylists from her former salon. Achieved a favorable settlement result after the former salon owner sued for misappropriation of trade secrets, business conspiracy, tortious interference with business expectancy, and breach of fiduciary duty.

Navigating the “Rocket Docket”: Our firm practices regularly before federal and state courts in Virginia, Maryland and the District of Columbia. Our firm is well-versed in the procedural rules before the United States District Court for the Eastern District of Virginia, best known as the “Rocket Docket.” The Eastern District is referred to as the “Rocket Docket” because of the fast pace of litigation in this particular court. Generally, the Rocket Docket schedules cases to be fully litigated in one year. The Rocket Docket has many local rules and procedures that are uniquely geared towards the fast-pace of the court, such as local rules specifically designed to expedite discovery. The court even has procedures for expedited motions practice, which require counsel to brief and argue disputes within one week. The Rocket Docket is also well known for firmly adhering to its local rules and procedures. Given the fast pace, it is highly important to work with counsel well experienced and versed in the Rocket Docket’s rules and procedures. Our attorneys have litigated numerous, complex matters in the Rocket Docket and are ready to strategize with you and guide you and navigate your case through the fast-paced system.

Familiarity with the Fairfax Circuit Court: The Fairfax Circuit Court is the largest and most active circuit within the state. It has many practices and procedures unique to the circuit, such as motions and scheduling procedures. Understanding the court system is integral to strategically litigating your case within Fairfax County. Our attorneys are highly experienced with Virginia practice and procedure, which is essential in the Fairfax Circuit Court. For example, Virginia recognizes certain pleas and practices that are not recognized by other state and federal courts, such as demurrers and pleas in bar. Our firm has litigated a broad variety of highly complex cases in Fairfax, and is equipped to resolve or maneuver your case forward at all stages of litigation.

Electronic Discovery Makes the Case

In today’s digital age, lawsuits can be won or lost based on evidence derived from a sea of digital communications and other data. At Protorae Law, we have a deep understanding of computer forensics as well as how to analyze voluminous electronic communications, user files and other electronic data, including metadata, in order to identify and isolate the important, and often hidden, information they contain. We then marshal that electronic information to support our clients’ claims or defenses.

You will find that our familiarity with E-discovery techniques assists us in effectively presenting or defending your unfair business practices matter in today’s high-tech legal environment. We have experience explaining this electronic information to juries and judges. Electronic data can be crucial evidence relied upon by juries and judges; and, if that data is overlooked or never uncovered during the pre-trial phase, the entire tenor of a case can change.

LEGAL DISCLAIMER: THE RESULTS OF ALL CLIENT MATTERS DEPEND ON A VARIETY OF FACTORS UNIQUE TO EACH MATTER. PAST SUCCESSES DO NOT PREDICT OR GUARANTEE FUTURE SUCCESSES.