Feeling Trapped: Can My Employer Take Legal Action Over My Dormant Company?

Dear seniors,

This concern of mine is related to the issue of double employment, but I was not able to find a suitable thread for this, so I have started my own.

Background of My Situation

So, this is how it started. I have been working in a consulting firm for almost five years. About a year ago, as my income was not enough and I wanted to do something more, I tried to start my own company. I got it registered, took a domain name, and planned to resign from my current company. I completed the company registration and other formalities while still working with my current company. The type of company I planned to start was involved in software development, consulting, and training and development activities.

However, when I wanted to resign, a problem arose. A couple of our clients defaulted on payments, causing an issue. I was asked to repay the 2L incentives (2 lakhs) I had received from the company for the closures I facilitated with those clients. My company stated they would not release any of my documents until I repaid the amount, which I was unable to do. Additionally, the expected funds to start my company did not materialize. Consequently, I abandoned my plan to start the company and had to continue with my current employer until the payment issue was resolved, as my company had taken legal action against the clients who defaulted on payments. This situation persisted, and I was unhappy with my employer's actions. Despite seeking advice, I was told it was not my problem and that my employer was unjustly blaming me, leaving me feeling helpless. Consequently, I stopped performing my job duties with the company for over six months, starting from April 13th.

Current Issues and Actions Taken

The reason for my lack of work was also due to receiving very small and insulting requests. Consequently, I began seeking my own clients, which I am authorized to do independently. Moreover, I did not receive sufficient support from the internal team to acquire clients. To address this, I posted a freelancing business development position to seek assistance. I used the LinkedIn account I had created for the other company, believing it would attract more responses if it appeared to be posted by an employer directly. However, my current company somehow discovered this and terminated my employment a couple of days ago, citing that I had worked for two companies and utilized their resources for my personal gain. The reality is that no such thing occurred. The company I registered is currently dormant, with no website, email addresses, bank accounts, employees besides myself and my partner, clients, or work completed. There is essentially nothing in that company except its registration.

Clarification on Double Employment

The issue is not one of double employment. Apart from the registration process, as mentioned above, I have not engaged in any work or transactions with the registered company. In fact, the domain name and other related aspects have already expired.

Seeking Advice on Legal Concerns

I no longer wish to work for my current company, as they believe I have acted inappropriately. Truthfully, I have been loyal to my current employer and am still so. As a result, I cannot face anyone there now. My main concern is whether my company can take legal action against me for this situation. I am willing to answer all your questions honestly. Kindly assist me.

Thank you in advance for your help.

Regards

Understanding the Situation

Despite the request being made to seniors, I'm hereby attempting to suggest something here. Hopefully, senior members here will guide us on the next course of action. Meanwhile, here is what I can suggest.

First of all, just take a deep breath and relax. What you have done is quite normal. Let me tell you what would have actually happened. Due to defaults, the company was quite desperate to make good on the defaults made by the clients. In such situations, the first target is the person who sealed it. Definitely, the top brass won't be facing the axe over this, and the first victim is the sales or deal-clincher. In your case, it was you. So they asked you to return the incentive or stay back so that they can recover that money somehow. Then over the period, they found a website, etc., and blamed you for dual employment.

Legal Concerns

Well, I have 'n' number of ways to go around it, but being a public forum, I certainly can't suggest them here.

They have fired you, and I presume you have already exited that company amicably or would be exiting very shortly.

Your actual concern seems to be, "Can they file a case against you?" Let's keep certain things clear here. Cases are not filed just like that. There's due process of law. As per what has been told here, your company is already in bad shape with debtors defaulting and thus should not be capable of taking on another lawsuit. Frankly speaking, I am expecting not more than a 10% chance (unless facts change). At max, if they feel like doing anything, they will simply serve a legal notice. Just contact some good lawyer for advice on it.

Final Thoughts

Lastly, once again, I would say, simply relax. It happens almost on a daily basis. You were made the scapegoat of it and are being made to feel guilty unnecessarily. As long as you did no wrong, there's nothing this employer can do to you.