When You Should Send a Cease-and-Desist Letter and What to do if Your Business Receives One

If an individual or business is causing harm to your business in Texas, you may consider sending a “cease-and-desist letter” warning them to stop what they are doing. In many cases, your cease-and-desist letter will warn that you intend to take legal action if they do not stop what they are doing.
In this article, we will discuss the basics of cease-and-desist letters in Texas, including:

• When you should send a cease-and-desist letter,
• The benefits and potential drawbacks of sending the letter,
• What you should include in your letter, and
• What you should do if your business receives a cease-and-desist letter.

What is a Cease-and-Desist Letter?
A cease-and-desist letter warns an individual or business that 1) they are engaging in conduct that is harmful to you or your business, 2) their conduct is infringing on your rights or is actionable in court, and 3) you intend to take legal action if they do not immediately cease their actions.
It’s just a letter. It’s not a court order, and it’s not enforceable, but it is important because:

• It puts the other party on notice that their conduct is harmful and may subject them to a lawsuit,
• It may resolve the issue favorably without the need for litigation, and
• It may become evidence against the other party if it is necessary to file a lawsuit – if they continue to do what they are doing, they cannot later claim they didn’t know.

When Should You Send a Cease-and-Desist Letter?
There are many situations where it is a good idea to send a cease-and-desist letter before filing a lawsuit or taking other action.
Before you fire off your letter, however, you should consult with your Texas business attorney to ensure that 1) your demands are justified and you have a valid claim if they do not comply, 2) your letter clearly states the law, contract, or right that is being infringed upon and the actions the recipient should take to correct the problem, and 3) the tone of the letter is firm but professional – a “nastygram” with angry rhetoric and empty threats may cause more problems than it solves…
Before sending the letter, consider that, in some cases, a politely worded email or phone call may resolve the problem without a need for further action. If informal means of resolving your issue are unsuccessful, then send the letter as a precursor to legal action.
Situations where a cease-and-desist letter may be appropriate include:

• Breaches of contract (making a record that you provided the other party with an opportunity to “cure the breach” before filing suit),
• Violations of non-compete, non-solicitation, or other employment agreements,
• Copyright, trademark, or patent infringement,
• Cases of slander, libel, or defamation,
• Misappropriation of trade secrets,
• Harassment, stalking, or “cyber-bullying,”
• Property encroachments,
• Unlawful debt collection behavior, or
• Any behavior that infringes on your or your business’s rights.

What Should be Included in a Cease-and-Desist Letter?
In most cases, the letter should include:

• Specific details about the individuals involved and the conduct in which they are engaged,
• Why and how the conduct infringes on your rights, referencing any applicable laws or contractual provisions,
• A firmly worded but polite demand that the behavior stop,
• A warning of the potential consequences if the behavior continues, and
• A time limit for the recipient to comply with your demand.

The letter should not be “blustering” or threatening, apart from a valid and professionally worded “threat” to file suit when justified. Don’t make “empty threats” in your letter – be prepared to promptly follow through with any actions you threaten to take, and, if you do not have a valid claim that can be enforced in court, don’t send the letter.
Depending on the circumstances, you may want to include a draft Complaint along with your cease-and-desist letter, although you will not file the Complaint unless the recipient fails to comply with your demand.


What is a DMCA Notice?
A DMCA Notice is a particular type of cease-and-desist letter that “informs a company, web host, search engine, or internet service provider that they are hosting or linking to material that infringes on a copyright” and demands that they remove the offensive material or suffer legal consequences.


Can a Cease-and-Desist Letter “Backfire?”
One reason you should always consult with legal counsel before drafting and sending a cease-and-desist letter is that your efforts could backfire.
How?

• There may be counterclaims that you are unaware of, and you may be prompting the recipient of your letter to file suit against you or your business,
• If the tone of your letter or the stated justifications are off base, you may prompt unnecessary litigation by causing the recipient to “double down” or by prompting them to file a preemptive lawsuit against you or your business,
• If you already know that you are going to file suit, your cease-and-desist letter may prompt the recipient to destroy evidence or take other steps to prepare their defense – in this case, you may want to send a “preservation of evidence letter” instead of the cease-and-desist letter, or
• You may expose yourself to claims like defamation or tortious interference with a business relationship based on the contents of your letter (see, e.g., Morales v. Barnes, where the recipient of a cease-and-desist letter was permitted to sue the attorney for “tortious interference with business relations” when the letter was sent to the recipient’s employer).

What Should You do if You Have Received a Cease-and-Desist Letter?
If you have received a cease-and-desist letter, you should contact your business attorney immediately so they can:

• Review the letter, the facts alleged in the letter, the claims made, and any relevant contracts or business agreements on which the claims are based,
• Advise you as to whether and how to respond to the cease-and-desist letter,
• Advise you as to whether the sender has a valid claim or whether you have any valid claims against the sender, and
• Advise you as to your next steps.

Are You Required to Respond to a Cease-and-Desist Letter?
In most cases, you should respond to a cease-and-desist letter, although there may be some situations where your attorney advises you to ignore the communication. You should never reply to – or ignore – the letter without first consulting with your attorney.
Depending on the circumstances, your attorney may advise you to:

• Reply to the letter with a request for additional information,
• Reply to the letter with a polite explanation of why the sender is wrong and you are not infringing on their rights,
• Promptly comply with the sender’s demands,
• File a preemptive lawsuit for damages, breach of contract, or asking the court for a declaratory judgment, or
• Ignore the communication.

Please feel free to contact one of our Murray Lobb attorneys to obtain our assistance in sending or replying to a cease-and-desist letter on behalf of your business. We also remain available to help you with all your general corporate, construction law, business, and estate planning needs.