Yes, you can sue an employee for stealing clients, and depending on what they signed and how they took the business, you may have several claims running at once. The strongest cases combine a written restriction like a non-solicitation clause with proof that the employee used confidential information or began working on clients before resigning. Even with no contract at all, the law gives employers real options.
What follows are the theories courts actually recognize, the remedies attached to each, and the deadlines and evidence that decide whether a claim survives.
If the Employee Signed a Restrictive Covenant
The most direct path to court is a signed agreement that specifically limits what the employee can do after leaving. Three clauses do most of the work, and many employment contracts include all of them.
Non-Solicitation Clauses
A non-solicitation clause bars a former employee from reaching out to your clients after departure. Courts generally enforce these when the restrictions are reasonable in duration and scope. A one- to two-year restriction limited to clients the employee actually worked with tends to hold up; push much further and courts start treating the clause as an unfair restraint rather than a legitimate protection. An overbroad clause that covers every client in the company, including those the employee never touched, faces a much higher risk of being struck down.
Scope matters as much as time. A clause that only covers active solicitation — calls, emails, pitches — is far easier to enforce than one attempting to prevent the employee from serving a client who independently seeks them out. Courts in most states distinguish between actively poaching clients and passively accepting business that walks through the door.
If your clause is overbroad, you are not necessarily out of luck. Many states will trim an unreasonable covenant down to enforceable terms, some will strike only the offending language, and some will void the entire clause. The same agreement can win in one state and fail in another, so the drafting jurisdiction matters as much as the drafting.
Non-Compete Agreements
Non-competes go further, restricting the employee from working for a competitor or launching a competing business at all. Enforceability varies dramatically by state. A handful of states effectively ban non-competes for most workers, while others enforce them when the duration, geographic reach, and scope are reasonable and tied to a legitimate business interest like protecting client relationships or trade secrets. A 2024 Federal Trade Commission rule that would have banned most non-competes nationwide never took effect; a federal court blocked it, and the FTC dropped its appeals in September 2025.1Federal Trade Commission. Federal Trade Commission Files to Accede to Vacatur of Non-Compete Clause Rule Non-competes remain governed entirely by state law.
Confidentiality Agreements
Confidentiality provisions protect sensitive business information — client lists, pricing strategies, proprietary methods. Where non-solicitation clauses restrict behavior, confidentiality agreements restrict the use of specific information. They work best when the contract clearly defines what qualifies as confidential rather than sweeping in “all information learned during employment.” A clause that names client contact details, contract terms, and purchase histories as protected categories is far easier to enforce than a vague catch-all.
Breach of a confidentiality clause can support both a contract claim and, if the information qualifies, a trade secret claim. The two theories often run in parallel.
If There Is No Written Agreement
You do not need a signed covenant to have a case. While still employed, every worker owes an implied duty of loyalty that prohibits actively competing with or undermining the employer’s business. This duty exists by operation of law, so it applies even to at-will employees with no restrictive covenants.
The line courts draw is between permissible preparation and impermissible competition. An employee can quietly research starting a business, consult with a lawyer, or file incorporation paperwork. What they cannot do is start soliciting your clients, redirect business opportunities to themselves, or download your client database while still on the payroll. The South Carolina Supreme Court held in one tugboat-industry case that soliciting an employer’s customers breaches the duty of loyalty “in almost every case.”2Justia Case Law. Futch v McAllister Towing of Georgetown Inc
Evidence of pre-departure misconduct dramatically strengthens any lawsuit. Emails to clients sent from a personal account, CRM exports in the weeks before resignation, and meetings with competitors during work hours all point to a loyalty breach that started before the employee walked out.
The Faithless Servant Doctrine
Some states take the duty of loyalty further with the “faithless servant” doctrine. An employee who acts disloyally can be forced to return compensation earned during the entire period of disloyalty, and the employer does not have to prove any damages to recover it. If the employee was secretly soliciting clients for six months before leaving, a court can order repayment of six months of salary. That remedy sits on top of any other damages recovered.
Fiduciary Duty for Senior Roles
The duty of loyalty applies to every employee, but officers, directors, partners, and senior managers who control business relationships are held to a stricter fiduciary standard. Taking clients for personal gain in one of these roles is not just disloyal — it is a breach of the obligation to put the company’s interests first. A fiduciary cannot take a business opportunity that belongs to the company, cannot use company resources for personal advantage, and cannot secretly compete while in a position of trust.
Whether fiduciary duty attaches depends on the role. A rank-and-file salesperson usually owes loyalty but not fiduciary duty; a managing partner who personally oversees key accounts almost certainly does.
If Client Data or Lists Were Taken
When the “clients” that walked out the door were carried in a spreadsheet or CRM export, trade secret law opens up. It protects confidential business information that has economic value because it is not publicly known, provided the owner took reasonable steps to keep it secret. Client lists, pricing models, contract terms, and purchasing patterns can all qualify.
What Actually Counts as a Trade Secret
Not every client list qualifies. Courts look at two things: whether the information provides a genuine competitive advantage because it is not publicly known, and whether the business made reasonable efforts to keep it confidential. Password-protecting a CRM, limiting access on a need-to-know basis, and requiring signed confidentiality agreements all count as reasonable measures. A list that essentially duplicates what anyone could pull from LinkedIn is unlikely to be treated as a trade secret, whatever the employment contract says.
State Trade Secret Claims
Nearly every state has adopted some version of the Uniform Trade Secrets Act. Under these laws, misappropriation covers acquiring a trade secret through improper means like theft, bribery, or inducing someone to breach a confidentiality obligation. It also covers using or disclosing a trade secret the person knew or should have known was obtained improperly. Remedies include injunctive relief to stop the misuse and damages for actual losses.
Federal Claims Under the Defend Trade Secrets Act
Since 2016, the Defend Trade Secrets Act has let employers sue in federal court. The trade secret must relate to a product or service used in, or intended for use in, interstate or foreign commerce.3Office of the Law Revision Counsel. 18 US Code 1836 – Civil Proceedings For most businesses with clients in more than one state, that threshold is easy to meet.
The DTSA offers an aggressive remedy state law generally does not: in extraordinary circumstances, a court can order the seizure of property necessary to prevent trade secrets from being spread further.3Office of the Law Revision Counsel. 18 US Code 1836 – Civil Proceedings This ex parte seizure is reserved for situations where the defendant would likely ignore a standard court order, and courts have typically required evidence of prior bad acts before granting it. When it applies, it lets you recover stolen files and data before the defendant knows a lawsuit exists. The statute defines trade secrets broadly to include “all forms and types of financial, business, scientific, technical, economic, or engineering information” as long as the owner took reasonable measures to keep it secret and the information derives economic value from not being generally known.4Office of the Law Revision Counsel. 18 US Code 1839 – Definitions
One procedural trap catches many employers. Federal law requires any employment contract governing trade secrets or confidential information to include a notice informing the employee that they are immune from liability for disclosing trade secrets to a government official or in a sealed court filing for the purpose of reporting a suspected legal violation. If your agreement lacks this notice, you cannot recover exemplary damages or attorney fees under the DTSA even if you win on misappropriation. Going forward it is an easy fix; retroactively, it is not.
Computer Fraud When Data Was Downloaded
When an employee downloaded client databases, exported CRM records, or emailed confidential files to a personal account before quitting, the federal Computer Fraud and Abuse Act may add another claim. The CFAA makes it illegal to intentionally access a computer without authorization, or to exceed authorized access, and obtain information from a protected computer. An employer can sue civilly if the conduct caused at least $5,000 in damages or loss, and must file within two years of the act or its discovery.5Office of the Law Revision Counsel. 18 US Code 1030 – Fraud and Related Activity in Connection With Computers
The catch is defining “without authorization” when the employee had legitimate access as part of the job. The Supreme Court’s 2021 decision in Van Buren v. United States narrowed the CFAA, holding that a person “exceeds authorized access” only when they access areas of a computer system that are off-limits, not when they access permitted information for an unauthorized purpose.6Supreme Court of the United States. Van Buren v United States In practical terms: if your sales manager had full CRM access as part of their job, downloading that data before quitting may not violate the CFAA, even though the purpose was clearly disloyal. The claim works best where the employee reached into systems they were not authorized to use, or where access had already been revoked.
Tortious Interference When Nothing Else Fits
Even without a covenant or trade secret, you may have a claim for tortious interference if the former employee deliberately disrupted your business relationships. This theory does not need a signed contract with your clients; an ongoing business relationship or a reasonable expectation of future dealings is enough.
To win, you generally need to show four things: you had a business relationship or reasonable expectation of one, the former employee knew about it, they intentionally interfered, and you suffered financial harm as a result. The line is between improper interference and legitimate competition. A former employee who opens a competing shop and wins clients through better pricing and service is competing, not interfering. One who spreads false information about your company, pressures clients to break contracts, or uses confidential information to undercut your bids has crossed into tortious conduct.
Courts look at the methods used. Threats, fraud, and other unlawful conduct strongly support a claim; simple persuasion and ordinary economic pressure generally do not. The harder cases sit in the middle, where a former employee leverages relationships and inside knowledge without technically breaking any law. Those cases often turn on whether the employee had a non-solicitation agreement or used trade secrets, either of which can transform otherwise legitimate competition into actionable interference.
What You Can Actually Recover
Winning matters only if the remedy is worth the fight. Several forms of relief are available, and some can be obtained before the case is fully decided.
Emergency Injunctive Relief
When a former employee is actively working your clients, waiting months for trial is not realistic. Courts can issue a temporary restraining order or preliminary injunction that immediately bars the employee from soliciting clients, using confidential information, or continuing to compete in violation of a covenant. To get emergency relief, you generally need to show a likelihood of winning, that you will suffer irreparable harm without the order (lost client relationships often qualify because they are hard to quantify), that the balance of hardship favors you, and that the injunction serves the public interest. Speed matters. Courts grow skeptical of irreparable-harm claims when the employer waits weeks or months before asking for relief.
Lost Profits
The core financial remedy is lost profits: the revenue you would have earned from those clients minus the costs of serving them. Calculating this usually involves a “but-for” analysis, comparing actual financial performance to what it would have been had the employee not taken the clients. Experts build the projection from historical revenue, retention rates, and industry benchmarks. The calculation must also account for expenses saved by not servicing those clients, any mitigation efforts to replace the lost business, and a discount to present value. Lost profit claims work best when the client relationships had recurring revenue and the loss is clearly tied to the employee’s departure rather than to market conditions.
Unjust Enrichment
When proving your losses is hard, you can sometimes recover based on what the former employee gained. Unjust enrichment damages measure the profits the defendant earned from the misappropriated relationships. This works particularly well when the employee started a new business and specific revenue can be traced to clients they took. The defense will always be that the profits came from the employee’s own skill and effort, not from anything taken from you.
Exemplary Damages and Attorney Fees
Both state trade secret laws and the DTSA allow exemplary damages — typically up to double the actual damages — when the misappropriation was willful and malicious.3Office of the Law Revision Counsel. 18 US Code 1836 – Civil Proceedings Courts can also award reasonable attorney fees to the prevailing party in trade secret cases. Some employment contracts include their own fee-shifting provisions requiring the losing party to pay legal costs. These are enforceable when clearly drafted, though courts define “prevailing party” differently across jurisdictions. A fee-shifting clause can meaningfully change the cost-benefit calculation on both sides.
How Long You Have to File
Every claim has a statute of limitations, and missing the deadline means losing the right to sue regardless of the evidence. The timelines for the most common claims in client-theft cases:
- Federal trade secrets (DTSA): three years from the date the misappropriation was discovered or should have been discovered through reasonable diligence. A continuing misappropriation counts as a single claim.3Office of the Law Revision Counsel. 18 US Code 1836 – Civil Proceedings
- Computer fraud (CFAA): two years from the act or the date the damage was discovered.5Office of the Law Revision Counsel. 18 US Code 1030 – Fraud and Related Activity in Connection With Computers
- State trade secret claims: typically three years in states that follow the Uniform Trade Secrets Act, though some states have shorter or longer windows.
- Breach of contract: varies by state, commonly between three and six years.
- Tortious interference and fiduciary duty: varies by state, typically two to four years.
The clock usually starts when you knew or should have known about the misappropriation, not when it actually happened. Courts are strict about the “should have known” side. If your top account manager resigned to join a competitor six months ago and your biggest clients started leaving immediately, a court is unlikely to accept that you only just discovered the problem.
Evidence to Lock Down Now
The difference between a strong claim and a weak one almost always comes down to evidence, and much of the most valuable evidence is perishable. Acting quickly matters more than acting perfectly.
- Preserve the departing employee’s company laptop, phone, and email account before anything is wiped or returned. A forensic image of the hard drive can reveal file downloads, USB transfers, email forwards to personal accounts, and deleted files. IT logs showing what the employee accessed in their final weeks are often the most damaging evidence in these cases.
- Pull CRM and access records showing when the employee exported client data, which records they viewed, and whether access patterns changed in the weeks before resignation. A sudden spike in data exports is hard to explain away.
- Reach out to clients who left and document what they say. A client who confirms the employee contacted them before resigning is direct evidence of pre-departure solicitation.
- Confirm exactly what the employee signed. Locate the original non-solicitation clause, confidentiality agreement, and any non-compete, and check whether the agreements include the DTSA whistleblower notice.
- Document the revenue each lost client generated, contract terms, and the history of the relationship. This becomes the foundation of your damages calculation.
Place a litigation hold on all relevant documents and communications as soon as you suspect a problem. Destroying or failing to preserve evidence, even unintentionally, can bring sanctions that undermine an otherwise strong case. The best factual position in the world does not help if the proof has been overwritten by a routine data purge.