Unfair competition claims arise when a business uses improper tactics, rather than fair market competition, to gain an advantage over a rival. In Manhattan, these disputes often involve misuse of confidential information, interference with contracts, or efforts to disrupt business relationships. When competitors cross the line, New York law provides multiple legal tools to stop the conduct and recover damages. Knowing when conduct becomes actionable helps businesses respond quickly and strategically.
What Counts as Unfair Competition Under New York Law?
Unfair competition in New York is a broad doctrine designed to address dishonest or unethical business conduct. Unlike narrow statutory claims, unfair competition focuses on whether a competitor engaged in conduct that violates principles of fairness in commerce.
Courts commonly see unfair competition claims tied to:
- Misappropriation of confidential or proprietary information
- Deceptive business practices
- Employee raiding combined with misappropriating trade secrets
- Interference with existing contracts or future business opportunities
- Passing off goods or services as those of another business
At its core, the claim examines whether the defendant used improper means to compete rather than lawful market behavior.
When Aggressive Competition Becomes Illegal
Competition alone is not unlawful. Manhattan courts routinely dismiss claims based on:
- Lawful price competition
- Marketing to the same customer base
- Hiring employees who are free to leave
Problems arise when competitors use tactics such as deception, coercion, misuse of confidential data, or intentional disruption of business relationships. The key question courts ask is whether the conduct crossed from competitive into misconduct.
Identifying Tortious Interference With Existing Contracts
One of the most common unfair competition claims involves tortious interference with contract. This occurs when a competitor intentionally causes a third party to breach a valid agreement.
To establish this claim, a business must show:
- A valid, enforceable contract existed
- The competitor knew about the contract
- The competitor intentionally induced a breach
- The breach caused damages
In Manhattan disputes, this often arises when a competitor:
- Encourages customers to break exclusive supply agreements
- Induces vendors to violate non-circumvention clauses
- Targets clients during the term of an active contract
Courts take these claims seriously when evidence shows deliberate efforts to disrupt binding agreements rather than ordinary solicitation.
Interference With Prospective Business Advantage: A Higher Bar
Even when no contract exists, New York law may still protect business relationships through a claim for tortious interference with prospective economic advantage. These claims are more difficult to prove and require more substantial evidence of misconduct.
To succeed, a business must demonstrate:
- A specific, identifiable business relationship
- The defendant’s knowledge of that relationship
- The use of wrongful means (such as fraud, misrepresentation, or economic pressure)
- Actual harm to the business opportunity
Merely competing for future customers is not enough. Courts look for conduct that is independently wrongful, such as spreading false information, threatening third parties, or exploiting confidential knowledge to sabotage negotiations.
Common Unfair Competition Scenarios in Manhattan
Manhattan unfair-competition disputes often arise in fast-moving commercial environments, including professional services, finance, real estate, technology, and retail. Common fact patterns include:
- Former employees soliciting clients using confidential data
- Competitors spreading false statements to cause reputational damage
- Vendors pressured to abandon existing relationships
- Business partners secretly diverting opportunities
- Competitors mimicking branding to confuse customers
These cases are highly fact-specific and often turn on emails, internal communications, and timing.
What Evidence Strengthens an Unfair Competition Claim?
Strong documentation is critical. Businesses pursuing unfair-competition claims should preserve:
- Contracts and exclusivity agreements
- Customer and vendor communications
- Internal emails referencing competitors
- Evidence of lost deals or diverted revenue
- Records showing misuse of confidential information
Early preservation of electronic evidence can be decisive, especially when seeking injunctive relief to stop ongoing harm.
Strategic Steps to Take When a Competitor Crosses the Line
When unfair competition is suspected, delay can weaken your position. Effective steps include:
- Conducting an internal fact review to assess exposure and leverage
- Sending a targeted cease-and-desist letter when appropriate
- Seeking injunctive relief to prevent further damage
- Coordinating unfair-competition claims with breach-of-contract or fiduciary-duty claims
- Evaluating whether expedited discovery is necessary
In some cases, early court intervention can prevent lasting harm to customer relationships and market position.
Unfair competition claims in Manhattan require a careful balance between protecting business interests and avoiding overreach. When competitors interfere with contracts or sabotage future opportunities through improper means, New York law provides meaningful remedies. Acting early, preserving evidence, and pursuing a targeted litigation strategy can help businesses stop unlawful conduct and recover damages.
When competitive disputes escalate, experienced legal guidance helps determine the most effective path forward. That’s where Levy Goldenberg steps in. We work to help NYC businesses combat unfair competition and other deceptive practices and have a proven track record of success. Connect with us today!