It's infuriating when a competitor engages in unfair business practices to win clients and customers. But is it worth the time and expense to sue? That depends on the circumstances–and what you can prove.
What are unfair competition practices?
According to California Business and Professions Code 17200 (the “Unfair Competition Law” or “UCL”), unfair competition is a tort that occurs when a business intentionally uses unlawful, unfair, or fraudulent methods to gain customers or a competitive advantage. Companies that engage in such deceptive acts can cause severe economic damage to competitors and prevent them from operating successfully. The most common forms of unfair practices include:
- Deceptive, Untrue or False advertising
- Misappropriation of trade secrets
- Trademark infringement
- Unauthorized substitution
- Below cost selling
- Bait-and-switch tactics
- Offering secret rebates to some customers, but not others
- Tied selling
- Trade libel (“rumor-mongering”)
- Noncompliance with manufacturing standards
Such unfair business practices are considered against public policy as they stifle competition. California courts thus interpret the UCL very broadly. The violation of virtually any law can serve as the basis of an unfair practice claim if it harms consumers or creates an unfair competitive advantage.
How to succeed on an unfair competition practices claim?
Bringing a successful unfair competition claim can be challenging. As the plaintiff, you carry the burden of proof, and the elements you'll need to prove will vary slightly depending on the unfair or illegal practice you're alleging. However, in general, you are likely to succeed on an unfair competition claim in California, if you:
1) are a consumer or business that has suffered measurable financial or property loss due to a business's unlawful or fraudulent conduct, and
2) can prove that the business intentionally engaged in illegal, unfair, deceptive, untrue, or misleading acts and that you lost money or property due to this act.
3) bring the claim within four years of discovering the illegal activity.
In most cases, the most difficult aspect of the claim is proving that the business acted intentionally.
What are the remedies for unfair competition?
A California court can provide two general forms of relief in an unfair competition suit. First, it may issue an injunction prohibiting the defendant from engaging in unfair practices. It may also award the plaintiff economic damages to repair the financial injury that occurred.
Civil Litigation with John Marshall, Attorney at Law
At John Marshall, Attorney at Law, we have the experience to handle even the most complex civil lawsuits, including suing a competitor for unfair practice. Contact us now to schedule an appointment and discuss the strength of a potential case.