Hello, I have a question for a Rabbi. Here’s the situation: there is a small shop within an establishment. There is an owner of the establishment, and a separate owner of the small shop. The small shop has a sole employee who is responsible for operations and stocking. This employee neglected the shop, but provided false information to the shop’s owner. The owner of the establishment had knowledge of this, but did not alert the owner of the shop. After some time, the owner of the establishment began stocking and selling products that the shop was selling in competition to the shop (even though there was an agreement not to). After an employee alerted the owner of the shop, the owner of the establishment was confronted. He maintained that because the shop did not adequately stock product, and the shop owner could not manage his employee properly, he considered it irresponsible and that it was within his right to sell his own so as not to look empty and bare. Is this kosher, since he KNEW it was being neglected and the shop owner was being misled? The establishment owner deliberately withheld the information for monetary gain.
Answer:
No, this is not alright.
If there is a non-competition agreement, which is done formally and in a biding manner, it is forbidden for the owner of the establishment to “compete” with the shop, and he cannot take the law (the agreement) into his own hands.
If the shop looked bare and empty, he should have informed the owner of the shop that something is amiss (and of course something was in fact amiss), rather than make deliberate (mis)use of the situation for his own gain.
Although the establishment was wrong to act as he did, the question of financial liability is more complicated, and this depends on the nature of the agreement and the losses that were incurred.
Best wishes.
Sources:
For certain elements of non-competition agreements, see Choshen Mishpat 245:1; Shut Chasam Sofer, Yoreh De’ah 9; Shut Maharik, Shoresh 181, Anaf 2. Each case is different, however, and needs to be weighed up independently.
