Avoid Legal Battles With Your Ex-Boss

So now, a little more than a year after opening, against the backdrop of cutting and coloring hair, Browne, Lupo and Arias are still embroiled in a court case -- the last thing any entrepreneur hopes will happen when they start their own business.

If you're planning to leave your employer to compete with him, it's not a bad idea to consult an attorney, which is what we did for this article. Peter Pizzi, a partner at Connell Foley LLP, with offices in New York City, Philadelphia and New Jersey, says that, "Basically an employee who does not have a restrictive covenant -- that is, a written agreement on where you work in your post-employment -- should feel free to leave and compete with the employer. But the employee should be careful not to actively compete with the employer before he or she leaves."

That may sound logical, but it's important to know the guidelines, which could be easy to violate. "You should absolutely not tell clients that you're leaving before you've left," says Pizzi. "That would be viewed as a dereliction of loyalty." He also says that you shouldn't take any assets that you used on behalf of your current employer, such as customer lists.

What you can feel free to do -- on your own time, of course -- is set up a corporation, purchase a domain name, and "take any preliminary action to create the business that you will activate once you leave," says Pizzi, citing examples like buying space in the phone book and purchasing promotional material. But even that can be tricky, as Pizzi points out: "You don't want to purchase advertising in a way that interferes with any vendor your employer currently uses."

Career Karma

Sure, your bending over backward to be as ethical as possible may not help if your employer doesn't take your leaving well. But it seems likely that if you are above board with your employer, things will work out in your favor.

Tracy L. Coenen learned that, when she left her old company, Peters & Associates, a small forensic accounting firm in Milwaukee, to become an even smaller forensic accounting firm in Milwaukee.

Coenen, who owns Sequence Inc. Forensic Accounting, a one-woman accounting firm, likens herself to the characters on the TV series "CSI," only instead of examining fly larva on a corpse, she's following data sheets to solve crimes like identity theft and falsified records.

Before starting her own firm, Coenen worked for her boss -- John Peters -- for two years. He taught her everything he knew. And then she left.

She didn't plan it that way, though. "We couldn't work together," she explains. "I wanted a more flexible work environment than he had, and it was personality-based. We just weren't meshing."

Coenen was 27 then; her employer was 47. She's now 34, and with the passage of time, Coenen says that they get along very well even though she directly competes with her former employer. And even though they're direct competitors, if either of them is too busy and has to turn a client away, they recommend the other. They've even collaborated on a few projects. But it never would have been that way, Coenen concedes, if she had trashed her employer and staff on the way out or raided the office supply room before leaving.