When a Buyer Accused Our Client of Competing Through Her Brother

The situation

Zofia called our office on a Thursday afternoon, speaking quickly and switching between English and her first language partway through explaining why. A letter had arrived from a lawyer representing Iryna, the woman who had bought her practice eight months earlier, accusing Zofia of breaching the non-compete clause in their sale agreement by helping her brother Bohdan set up a competing business less than a year after closing. Zofia's English was serviceable for everyday conversation but not for reading a demand letter full of contractual language, and she had spent two days trying to understand exactly what she was being accused of before she called us.

Zofia had sold her practice, a small IT support business she had built up over a decade of contract work before incorporating it, for a price in the seven hundred and fifty thousand to two million dollar range, and the sale agreement included a standard non-compete restricting her, personally, from opening or working in a competing business within a defined area for a set period. She had not opened a competing business. What she had done, in the months after the sale, was help her brother Bohdan get his own new business off the ground, in a similar field, roughly across the city.

Zofia's help had included introducing Bohdan to her old suppliers, sitting with him for a few afternoons while he set up his booking and record systems using the same software she had used in her old practice, and, on at least two occasions that the buyer's lawyer had somehow learned about, mentioning her old business's approach to pricing when Bohdan asked her advice. None of it had felt, to Zofia, like competing. She was not working there, she had no ownership stake, and she genuinely believed helping a family member start a new business was unrelated to a covenant that named her personally.

Iryna, who had left a steady job as a court clerk to buy the practice and run it full time, had lost several clients in the months since Bohdan opened his doors, clients who told her plainly they were going where Zofia's brother worked because they trusted the family name and assumed some version of the old practice, and the relationships it had built, had simply moved down the road. Whether or not Zofia's help crossed a legal line, the practical effect on Iryna's business was real, and that was the letter Zofia was now holding, unable to fully read or fully understand it herself.

What the other side was relying on

Iryna's claim rested on the idea that a non-compete restricting an individual personally can still be breached indirectly, if that person provides material assistance to someone else's competing venture rather than opening one under their own name. This is not an unusual legal position. Courts have generally been willing to look past the technical structure of a covenant if the substance of what happened defeats its obvious purpose, and Iryna's lawyer was clearly building toward an argument that Zofia's involvement with Bohdan's business was substantial enough to count as competing in substance, even without her name on any ownership document.

The specific evidence Iryna's side was relying on came from three sources. First, the supplier introductions, which were documented in emails Zofia had sent from her old business account, some of which had not been fully deactivated after the sale. Second, a client list overlap, since several of the clients who left for Bohdan's business had previously been Zofia's, which suggested more than coincidence even without direct proof of referral. Third, and most damaging, was a text message exchange between Zofia and Bohdan, obtained through a mutual acquaintance rather than any formal process, in which Zofia had written something that translated roughly to 'do it the way I always did, it works,' referring to pricing.

What Iryna's lawyer was also relying on, whether deliberately or not, was the language barrier itself. Zofia's early responses to the initial letter, sent before she retained us, had been short, defensive, and occasionally imprecise in ways that read as evasive in English even though Zofia had not intended them that way. A phrase that in her first language would have meant something closer to 'I do not think I did anything wrong' had come across in her hurried English reply as closer to a denial of even having spoken with Bohdan about the business at all, a denial the text messages then appeared to contradict directly. That mismatch between what Zofia meant and what her early written responses said had already done some damage to her credibility before we were retained.

The genuine legal question, once the exaggeration was stripped away, was real and not manufactured: had Zofia's assistance been substantial enough, and close enough to the covenant's evident purpose, to amount to a breach in substance. The evidence supporting Iryna's position was strong enough that dismissing the claim outright was not realistic. The task was to establish exactly how far Zofia's involvement actually went, correct the record on what her earlier statements had meant, and limit the exposure from there.

What we did

1. Reviewed the demand letter in full with Zofia through an interpreter before any response was drafted. Before doing anything else, we made sure Zofia understood every specific allegation Iryna's lawyer had made, item by item, rather than reacting to the letter's general tone, which let us plan a response grounded in the actual claims rather than her initial fear of the worst.
2. Arranged proper interpretation for every conversation going forward. The first step was making sure Zofia understood precisely what she was being accused of and could respond accurately, so we brought in a qualified interpreter for our meetings and for reviewing any further correspondence, which stopped the pattern of imprecise responses that had already worked against her before we were retained.
3. Withdrew and corrected Zofia's earlier written responses. We sent a formal letter to Iryna's lawyer clarifying what Zofia's initial replies had actually meant to convey, acknowledging the conversations with Bohdan had occurred while correcting the impression that she had denied them entirely, which reduced the credibility damage without pretending, to Iryna's side or to Zofia herself, that the underlying facts were anything other than what they were.
4. Catalogued the actual extent of Zofia's assistance, honestly and completely. Rather than minimizing or guessing at what evidence existed, we asked Zofia directly and repeatedly, through the interpreter, exactly what she had done, which produced a complete and accurate picture, including the supplier introductions and the pricing conversation, before Iryna's side could present a version we would then have to walk back.
5. Assessed the non-compete clause's actual wording against what Zofia had done. The covenant restricted Zofia from being an owner, employee or consultant of a competing business, but did not clearly address casual personal assistance to a family member, so we identified the genuine gap between the letter of the clause and what had actually occurred, which shaped a realistic settlement position rather than a false claim of full innocence.
6. Deactivated the old business email account and confirmed no further contact. To prevent the dispute from growing while it was still being negotiated, we had Zofia's remaining access to her former business systems fully closed and secured her commitment, going forward, to have no further involvement with Bohdan's business decisions, which addressed the ongoing risk directly instead of leaving it to resolve itself over time.
7. Opened settlement discussions rather than contesting the claim outright. Given the strength of the evidence and the genuine, if narrow, substance to Iryna's position, we proposed a negotiated resolution early on, which limited legal costs on both sides and gave Zofia far more control over the final outcome than a drawn-out dispute over the covenant's exact meaning would ever have allowed.
8. Negotiated a settlement covering a defined payment and a clarified covenant. The final agreement included a modest payment to Iryna reflecting the client loss attributable to the period of assistance, and an amended, more specific covenant term making clear that indirect assistance to a family member's competing business was itself restricted, closing the gap that had caused the dispute in the first place.

The outcome

The dispute settled roughly ten weeks after Zofia's first call, without formal proceedings. Zofia agreed to pay Iryna an amount in the low tens of thousands of dollars, reflecting a reasonable estimate of the client business attributable to the period when her assistance to Bohdan was most active, rather than the far larger figure Iryna's initial letter had suggested she might pursue.

This was not a win, and it was not presented to Zofia as one. She had, in substance, provided assistance that came close enough to the purpose of her non-compete that a court might well have found against her on at least some of the conduct, and the settlement reflected that reality rather than papering over it. The corrected record on her early statements mattered less as a defence and more as a way of ensuring the settlement was negotiated on accurate facts rather than an exaggerated version built on a misunderstanding.

What was contained was the size of the exposure and the length of the dispute. Left uncorrected, the language barrier alone might have pushed Zofia toward either an unnecessary admission of far more than she had done, or a denial that the text messages would have exposed as false, either of which would have cost her more in the end. Bohdan's business continued operating, since nothing in the settlement restricted him personally, but Zofia's further involvement with it stopped. She described the experience afterward as a hard lesson in how far family loyalty can carry legal risk that has nothing to do with intent to do wrong, which is a fair summary of what the file actually showed.

Zofia has since made a point of asking, before agreeing to help anyone with a new venture, whether any past agreement of hers might apply. It is a small habit that cost her something to learn, but it is also the kind of question that would have avoided this entire dispute if she had thought to ask it eight months earlier, before her first afternoon spent showing Bohdan how the booking software worked.

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