Avoid Legal Battles With Your Ex-Boss

This article was written by Geoff Williams of Entrepreneur.com

Some bridges are merely burned. Others are scorched.

Elaine Browne and her business partners, Federico Lupo and Dario Arias, knew the latter applied to them shortly after opening their New York City hair salon, Trillium. "We found out we were being sued during our second week when the affidavit came," says Browne. "We were shocked."

The reason for the lawsuit? Browne, Lupo and Arias, sensitive types who will only cop to being in their 30s and 40s, worked together for years at a hair salon known as the John Sahag Workshop before collectively quitting and creating a new company -- effectively competing with their former salon.

It's a common gripe among many business owners. You hire employees, teach them everything you know and groom them for a long future at your business. Then one day, they're out the door, starting their own business with an indirect mission: to compete with you.

If that's a reasonable fear among veteran entrepreneurs, it's also understandable why a novice entrepreneur might view the situation differently. After all, you signed up to work at a business for a paycheck, stability and experience -- but not necessarily for a lifetime commitment.

Why shouldn't you be able to quit and start your own business in the same industry? Once you've decided to do so, what should you do -- forget everything you've learned? And most importantly, how do you get out without being accused of stealing clients and knowledge and becoming the enemy?

Fortunately, it can be an easy process. If you and your boss are friends, and your employer has treated you well, chances are you can depart by using a few simple strategies. "Be upfront and aboveboard in all of your dealings," suggests David Minor, director of the Neeley Entrepreneurship Program at Texas Christian University. "Do not steal customers, employees or take trade secrets. More often than not, there is plenty of business and people elsewhere, and at the end of the day, we all have to get up in the morning and look in the mirror."

It's an entirely different situation, of course, if you and your boss don't get along, or if you're working for a major corporation and have never really met your employer. That doesn't mean you should be a jerk or unethical when you leave, but as Minor says, you don't have to worry about whether you're departing as friends. "Certainly you would want to honor any legitimate non-compete agreements, but more often than not, those aren't binding anyway," he says, "and are simply put in place to 'psychologically handcuff' an employee."

When Doug Worple, 42, left the huge conglomerate Procter & Gamble to open his advertising firm Barefoot Advertising, he knew that P&G's policy was to wait one year before working with any ex-employee who had started an advertising agency to avoid impropriety. "You don't want a brand manager telling someone in [the] advertising [department] that, 'Hey, I can increase your budget by five million if you send a sweet chunk of business my way after I'm on my own.'"