Lewis Resolves Business Disputes Between Competitors
Business competition may seriously injure if not destroy the business of a rival. Our free market economy presumes that businesses, other than regulated industries, may compete without restraint so long as the law is not violated, even to the extent of destroying a competitor.
Lewis has a rich history of investigating, prosecuting, defending, and settling disputes between competitors.
The law provides a broad array of legal claims that protect the free market system through the private lawsuits of the participants. These range from an action for monopolization under the federal Sherman Act of 1890 to an action for tortuous interference with business under Alabama common law.
Common business disputes include defamation, false advertising, antitrust violations, interference with business and intellectual property disputes.
Covenants Not to Compete
Covenants not to compete protect businesses from competitors seeking to hire valuable employees. Covenants not to compete are enforceable over a range of protectable interests including customer relationships and confidential information.
Defamation Injures Reputation
Publication of false oral statements of fact, called slander, and false written statements of fact, called libel, which injure the reputation of a business, its owners, and its employees may lead to litigation under Alabama law.The law of defamation is complex. The rules vary as to whether libel or slander is claimed and whether the plaintiff is a public or private figure. Some statements may be absolutely privileged, such as statements made in the course of judicial or legislative proceedings. Other statements may be subject to a qualified privilege when the parties to it have an interest in the subject matter and the statement is made without ill will or spite. Businesses are generally liable for defamation by their agents acting within the scope of their employment. The remedy for defamation is normally money damages, although a few courts have issued injunctions claiming that the First Amendment prohibition on prior restraints on speech did not apply.
Section 43(a) of the federal Lanham Act proscribes false statements or representations that are made in commercial advertising or promotion are likely to deceive consumers, and are likely to cause injury to the plaintiff. The range of actionable statements is broad, and includes comparative and non-comparative advertising. It could be made in the course of a national advertising campaign or perhaps a single letter. The false statement may be about either the advertiser’s or its competitors’ goods and services. It may misrepresent the nature, characteristics, qualities or geographic origin of an advertiser’s or its competitor’s goods, services or commercial activities. The false statement must be material to a consumer’s purchasing decision.Potential claimants include all businesses that can show an injury to a commercial interest in reputation or sales proximately caused by false statements.Claimants could include wholesalers or retailers suffering lost sales.The remedies available to a plaintiff under the Lanham Act include damages, corrective advertising, injunctive relief, and attorneys’ fees. The Act allows the trial judge broad discretion to fashion an equitable remedy that fairly redresses the plaintiff’s injuries.
Tortious Interference With Business Relationships or Contracts
Competing businesses may have a tort claim under Alabama law against a competitor for interfering in a business relationship or contract. The defendant must be a stranger to the relationship by not having an interest in the relationship and by not being a party to the contract. Lawful business competition is permitted but competition by wrongful means is not permitted. The remedy for this tort is normally damages, and under appropriate circumstances punitive damages. Since the tort covers such a broad range of conduct, most business plaintiffs include a claim for interference along with other claims. Situations where this tort may be the best claim involve bribery and kickbacks to employees, buyers, sellers, or governmental officials or involve inducing an employee to violate a duty to his former employer arising out of a non-compete or non-solicit covenant or disclosure of trade secrets or other information.
Intellectual Property Claims
Many business competition disputes increasingly arise out of intellectual property disputes such as trademark infringement, copyright infringement and patent infringement, as well as theft of information that is confidential, proprietary, or a trade secret. Read more.
The federal Sherman Act of 1890, sometimes called the Magna Carta of free enterprise, outlawed “every contract, combination, or conspiracy in restraint of trade,” and any “monopolization, attempted monopolization, or conspiracy or combination to monopolize.” The U.S. Supreme Court decided long ago that Act does not prohibit every restraint of trade, but only those that are unreasonable. The federal antitrust law is enforced in the four main ways: civilly and criminally by the U.S. Department of Justice, administratively by the U.S. Federal Trade Commission, and civilly by private litigants or states as parenspatriae. Most civil litigation today focuses on agreements between competitors to fix prices, divide markets, or rig bids. Private class actions for damages following federal enforcement action have increased. While Alabama has it own antitrust act, it is infrequently the primary basis of any litigation.