When the dispute is between partners, shareholders, or competitors — not strangers.

It's the difference between suing on behalf of the company and suing in your own name — and it controls who recovers, what relief is available, and whether the suit can proceed at all.

A derivative action is brought by a shareholder on behalf of the corporation against directors, officers, or controlling shareholders for breach of fiduciary duty owed to the corporation. Recovery flows to the corporation, not the plaintiff. The action requires either pre-suit demand on the board or pleading demand futility with particularity.

A direct action is brought by the shareholder for harm to the shareholder personally — oppression, breach of a shareholder agreement, denied dividend rights — and any recovery flows to the plaintiff individually. Most business disputes contain both kinds of claims, and characterizing them correctly determines whether each survives a motion to dismiss.

Sometimes — and in some states, much more readily than others. New Jersey's § 14A:12-7 is widely regarded as the most plaintiff-friendly minority-oppression statute in the country, giving the Chancery Division broad discretion to order a buyout, custodianship, accounting, or dissolution where the controlling shareholders have engaged in oppressive conduct. New York's BCL § 1104-a triggers an election to purchase under § 1118 — automatically converting a dissolution petition into a forced buyout at fair value. Virginia, Maryland, and D.C. each apply more restrictive frameworks; in those states, the leverage often comes from the shareholders' agreement rather than the statute.

The threshold question is which state's law governs (often determined by the entity's state of incorporation, sometimes by a forum-selection clause), and the second question is what the operating or shareholders' agreement actually provides about exit rights.

Three things, in this order, today: (1) preserve forensic evidence — image the departing employee's company devices, suspend (do not delete) email and cloud-storage accounts, pull USB-device history and remote-access logs, and document everything with chain-of-custody discipline. (2) send a preservation letter to the employee and any new employer identifying the trade-secret information at issue and demanding return and non-use. (3) evaluate emergency relief — TRO, preliminary injunction, and where the case warrants it, an ex parte seizure motion under DTSA § 1836(b)(2).

Most trade-secret cases are won or lost in the first 21 days. Information that moves into a competitor's hands, a customer's email, or a public domain in those three weeks is usually unrecoverable.

Enforceability varies dramatically by state and by clause. Virginia recently enacted Va. Code § 40.1-28.7:8 limiting enforcement against "low-wage employees." Maryland has restricted non-competes for low-wage workers and certain healthcare professionals by statute. D.C. enacted broad restrictions under the Ban on Non-Compete Agreements Amendment Act, with later amendments narrowing scope. New Jersey applies a reasonableness test (geographic scope, duration, legitimate business interest, hardship). New York applies the strict BDO Seidman reasonableness framework and continues to refine the rules through case law.

Where the non-compete is partially overbroad, some states "blue pencil" the clause to enforce it as narrowed; others void the entire covenant. The clause is read against the state where enforcement is sought, not necessarily where it was signed.

Civil RICO under 18 U.S.C. § 1964(c) carries treble damages and attorneys' fees — making it one of the most consequential statutes in commercial litigation. To plead it, the complaint must allege (i) conduct (ii) of an enterprise (iii) through a pattern (at least two related and continuous predicate acts) (iv) of racketeering activity, plus injury to business or property by reason of the violation.

The "pattern" requirement is the most common failure point. Courts demand related-and-continuous predicate acts — usually involving wire fraud, mail fraud, or money laundering — over an extended period. RICO is not a remedy for a single fraudulent transaction or a routine breach-of-contract dispute, even one with multiple parties. Where the elements are present, however, the statutory fee-shifting and treble damages reshape settlement leverage immediately.

Forum selection in commercial litigation is rarely accidental. Federal court is preferred where DTSA, civil RICO, federal securities, or other federal claims are present; where the case requires diversity jurisdiction discipline; where the defendant is sophisticated and the plaintiff wants tighter discovery management; or where the local state-court bench is unfamiliar with complex commercial matters. State court — especially specialized commercial divisions like New Jersey's Chancery Division or New York's Commercial Division — is preferred where state-law remedies (oppression, business-divorce statutes, state UTSAs with broader relief) drive the case, or where the local bench has deeper experience with closely-held disputes.

Removal under 28 U.S.C. § 1441 is available within 30 days of service if the defendant prefers federal court — meaning the plaintiff's choice of forum is provisional until the removal window closes.