The laws prohibiting unfair competition and unlawful business practices are designed to promote fairness in the marketplace among business competitors and also provide consumer protection. These laws prohibit a variety of wrongful and anti-competitive behaviors, and the wrongful acts these laws address may take place in all facets of business operations. In California, unlawful, unfair, and fraudulent business practices are forbidden under the Unfair Competition Law (UCL) (Business and Professions Code §§17200, 17500), which also prohibits unfair, deceptive, or misleading advertising. The laws are not limited to anti-competitive business practices, but also concern the general public’s right to be protected from fraud, deceptive business practices, and unlawful conduct. Those sustaining injuries from unfair competition or unlawful business practices can obtain a variety of relief. Though the areas are related, unfair competition and unlawful business practices are distinct from issues covered by a non-compete, non-solicitation, and restrictive covenants.

Any corporation or individual can be sued under the UCL, whether by the government or by private individuals/entities. Courts have generally agreed that the term “business act or practice” includes most business-related activities. These may include ongoing activities or isolated actions.

An “unfair” business practice is a business practice that contradicts public policy or that is deemed immoral, unethical, or oppressive, or that causes injuries to consumers. Given the broad language in the UCL, there is no clearcut, easily defined method of determining what kinds of behaviors are prohibited as “unfair” business practices, so each case is very fact specific. “Unlawful” means that the business practice violates another legal rule. A business practice can be considered “Fraudulent” under UCL with a lesser showing than what is required to prove a common law fraud claim. To establish liability, a plaintiff need only show that the business practice is likely to deceive the public in order to establish that the business practice is fraudulent under the UCL.

In order to bring an action under Business and Professions Code §17200, a plaintiff must have suffered an injury and lost money or property as a result of the unfair competition. This must include some kind of economic injury. Plaintiffs may establish this by showing that a client lost money or made less money in a transaction than they might have done absent the unfair business practice. Another means of establishing a basis for this kind of action is to demonstrate that a party was deprived of money or property to which they had a legitimate claim. They may also establish that future earnings were negatively affected.

Unfair Competition and Unlawful Business Practices: How We Can Help

The unfair competition and unlawful business practices attorneys at Payne & Fears have substantial experience helping clients obtain remedies for unfair competition and unfair business practices. We advise individuals and businesses on the nuances of state and federal law governing unfair competition and unlawful business practices. We have assisted clients in recovering actual economic damages as well as obtaining injunctive relief to prohibit unfair practices. We also frequently defend clients from these claims. Payne & Fears attorneys help clients understand the laws pertaining to their specific case and formulate a legal strategy to protect their business from harm.