David Pearlman

Babson Professor William Bygrave, Case Director

Grey Ehrlich, Case Writer

Arthur M. Blank Center for Entrepreneurship

© Babson College, 1999.

Abstract

A young aggressive salesman attempts to change employers when he receives a summons in the mail notifying him that his previous employer is suing him for $100,000. His former company, a manufacturer's representative business, claims that Pearlman, who worked as an independent contractor, had committed a breach of fiduciary responsibility when he left to work for a customer. David would be selling his new company's goods directly into the marketplace instead of through the manufacturer's rep. Since Pearlman has virtually no money, he is somewhat unconcerned about the suit except that an injunction, if it is granted, may prevent him from working for his new employer until the case is resolved. Fortunately, his new company supports him in the court proceedings, the injunction is denied, and he goes on to become an award-winning salesman.

Location of the company: Massachusetts

Years spanned by the case: 1990-91

Industry segments: Sales

Stage of the company: startup

Age of the entrepreneur: mid-20's

Key Words: entrepreneurship, sales, law suits, manufacturer's representative

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