Is a Competitor Harassing Your Business? Legal Actions You Can Take

A business competitor can make life difficult without breaking the law. But when competition involves false statements, interference with customers or contracts, misuse of confidential information, trademark violations, or other wrongful conduct, your business may have legal options. The right response depends on exactly what the competitor is doing, what harm it has caused, and which federal or state laws apply.

For legal help with a business competitor dispute, use the Super Lawyers directory to find an attorney who handles business litigation.

What Is Business Competitor Harassment?

Not every aggressive business activity or conduct is illegal or harassment. Competing businesses have a right to advertise, hire workers, and promote their own products and services. They can also compete for customers. But legal issues can arise when a competitor uses actionable conduct to harm another competitor. Simply being annoying, aggressive, persistent, or unpleasant is not necessarily enough to create a legal claim.

When conduct rises to a level of harassment, it typically includes unfair or overly aggressive behavior. The purpose is to disrupt normal business operations by directly interfering with customer relationships. Such conduct may intentionally damage the brand’s reputation.

Common Types of Business Competitor Harassment

The specific legal claim a business may have will depend on the facts of the situation. Business competitor harassment itself isn’t a legal claim; however, the actions a business takes during harassment may support a specific legal claim.

False or Defamatory Statements

A competitor can criticize your business or make true negative statements that it can validate with facts. This differs from knowingly spreading false statements that damage a brand’s reputation. Doing so could support a claim for defamation or trade libel.

False Claims or Misleading Advertising

False advertising can occur when a competitor makes a false or misleading commercial representation about its own or another business’s goods, services, or commercial activities. Section 43(a) of the Lanham Act provides a federal cause of action for certain types of false advertising.

Interfering with Customers, Contracts, or Business Relationships

A competitor may pursue your customers, but intentionally using wrongful conduct to disrupt an existing or prospective business relationship may support a tortious interference claim. Specific requirements vary by state, and evidence of the relationship, the competitor’s conduct, and your resulting losses can matter.

Trademark Infringement and False Association

Using another company’s name, logo, slogan, or other protected mark in a way that is likely to confuse consumers may constitute trademark infringement under the Lanham Act. The same conduct may also support related state-law unfair competition claims.

Misappropriating Confidential Business Information

A competitor’s unauthorized acquisition, use, or disclosure of confidential business information may create legal liability when the information qualifies for legal protection. Federal and state laws can address trade secret misappropriation, including the Defend Trade Secrets Act and applicable state trade secret laws.

Other Forms of Unfair Competition

State laws may provide additional claims for unfair business practices, unfair or deceptive trade practices, business disparagement, fraud, or misappropriation. Because these laws vary by jurisdiction, an attorney can help determine which claims may apply to the competitor’s specific conduct.

When Does Competitor Harassment Violate the Law?

Competitors can lower prices, pursue the same customers, advertise aggressively, and hire employees. Those actions alone are generally lawful and considered a way to gain a competitive advantage.

The issue is whether the competitor’s conduct crosses into something independently unlawful, such as false statements, improper interference, or intellectual property violations.

False Statements

False statements may support claims such as defamation, trade libel, or false advertising. The specific claim a business can make depends on the facts and the applicable jurisdiction.

Intentional Interference

Intentionally disrupting an existing or prospective business relationship through improper conduct may support a tortious interference claim. State laws for this type of claim vary.

To succeed, a business generally must show it had an existing business relationship, that the competitor’s conduct directly interfered with it, and that it suffered economic harm as a result.

Federal Intellectual Property Laws

Federal laws protect intellectual property. These laws can address trademark or copyright infringement. They can also address false advertising or trade secret violations.

Many states follow the Uniform Trade Secrets Act. Others have their own statutes. For example, California’s unfair competition law addresses certain unlawful, unfair, or fraudulent business practices.

What Should a Business Do if a Competitor Is Harassing It?

Documenting the harassment is crucial when dealing with business harassment. Preserve emails, texts, social media posts, advertisements, letters, and other communications. Take screenshots and preserve URLs where appropriate. Create a contact sheet for witnesses. Keep evidence of lost customers, canceled contracts, or other financial consequences.

Review any contracts disrupted by the harassment. Review confidentiality agreements, nondisclosure agreements, customer agreements, and other relevant contracts. Determine whether the competitor may have obtained information in violation of an existing agreement.

While it’s tempting to respond to a competitor’s actions in kind, avoid doing so. Do not make threats or unsupported accusations. Avoid making defamatory statements. Consult with a business law attorney to create a demand letter or public response. The lawyer will also look for potential legal claims that may arise from the harassing conduct.

What Remedies Are Available for Business Competitor Harassment?

Businesses have two types of legal remedies available. One type is non-monetary, known as injunctive relief. An injunction is a court order requiring the defendant to take a specific action. In a business harassment case, that would mean stopping the harmful action. Examples include removing infringing material, stopping trademark use, or ending targeted customer outreach. This type of relief is fact-specific.

The other type of relief is monetary damages. Depending on the claim, a business may seek compensatory damages for economic losses caused by the competitor’s conduct. This could include lost profits, lost business, harm to commercial reputation, or another provable economic loss. The total damages a business can recover depend on the applicable law and provable losses. In some situations, attorney fees may also be recoverable.

When Should You Involve a Business Litigation Attorney?

Once a business becomes aware of competitor harassment, a business should take strategic steps to address the issue. Avoid self-help measures that could lead to legal action against the business. Before responding, talk with an attorney to assess the competitor’s conduct. A lawyer will evaluate the circumstances to determine if there are any actionable claims. If appropriate, the lawyer will send a demand letter or take another action.

If the competitor is targeting current customers, suppliers, or employees, early legal involvement can help protect these essential business relationships. A cease-and-desist letter may be appropriate to formally tell the competitor to stop. This also helps to create a record of communication and action between the competitors.

If false statements are damaging your business, you may have claims for defamation, business disparagement, false advertising, or related claims. A lawyer can file a lawsuit in the appropriate court. Emergency injunctive relief may become necessary. You may need to act quickly to stop ongoing conduct that could cause harm that is difficult to reverse.

For disputes involving intellectual property or trade secrets, federal and state laws are specialized and detailed. A lawyer experienced with these types of claims is essential to navigate them and protect the confidential information.

Seek Legal Guidance

For legal help with a business competitor dispute, use the Super Lawyers directory to find an attorney experienced in business litigation.