Non-compete clause?

Question

I've had a gymnastics business for 2 years. A women I hired when I opened (an old friend) deceived me.
I found out that back in February she began giving private lessons at her church. She told my students/parents that she didn't want to split her fee wi/ my gym. She took students to her church without my knowledge. These lessons were given to students that came to my gym. She continued to work for me until June, when I found out.
She also took the student list home (contact info). I asked her to return it, she said she lost it.
Now she is teaching over 40 students that previously came to my gym. We have a business name, pay taxes, insurance, rent, etc. We charge students $45 per month. B/c she is doing this at her "small country church" they don't charge her any rent, etc. Obviously she has no overhead. She charges $12.50 per month (vs my $45). She makes all students pay in cash or checks written in her name. No business license or insurance.
When I started my business I hired old cheer friends, it never occured to me to have anyone sign a non-compete clause.
I am afraid that if I pursue anything legal it will hurt my business. We live in a small town. Everyone knows everyone. I am certain it would be turned around to where I look like the bad person for stopping her from pursuing her "dream".
What can I do?

Answer 1

I don't know if I am getting the facts straight here, but in the absence of an enforceable non-competition clause (limited scope), there is not much that jumps out in the way of causes of action. If she did things that were in violation of an employment agreement, then the remedy is moot. If you had evidence, you might be able to do something about the proprietary information that she took. This is a real strong argument for why a non-competition clause should be used, in a small market with limited competition. You should consult a local attorney, call your county bar association for help in finding an attorney specializing in contract law. However, it seems unlikely that you have much in the way a legal cause.

Answer 2

I'm not an attorney, but I do know that some non compete clauses can be overturned if they are found to be over reaching or unreasonable. You should contact an attorney to see what legal action needs to be taken. If you just go ahead and practice, they can sue you for breaking the contract. You need to get a judge to overturn the clause before you begin practicing again. 1st 2 things I ever learned in business wrtr 1. NEVER sign anything without reading completely 2. NEVER sign anything I don't aggree with

Answer 3

Without a non-compete agreement you have little recourse here, and attempting to prove she caused your business damages through fraud will be next to impossible to prove. Your only recourse is report her for operating a business without a license, report her to your state and Federal revenue services, and finally wait for someone in her Gymnastics class to get hurt and that person chooses to sue the Church and the Instructor. You can also attempt to bring an issue with your local city zoning commission. Odds are the church is not zoned for any commercial services in which the Gymnastics businesses is in violation of city or county codes. You can also point out to the Church directors that if they consent to the Gymnastics businesses on their property they could be held liable for any injuries that are incurred on their premises.

Answer 4

You can sue her for taking the client list as that belongs to the business. You could also sue her for soliciting your customers in your place of business.

Additionally, you could report her for operating a business with out a license.

Answer 5

turn her into IRS for tax evasion.
Tell the Church that you are filling a complaint with the IRS stating they are running a business on their property this puts them in violation of their tax exemption.
Turn her into the state as well for tax evasion.

Answer 6

Nothing.