Cease and Desist

What Is Cease and Desist?

Cease and desist can take one of two forms: an order (injunction) issued by a government administrative agency or the courts to stop suspicious or illegal activities, or a letter, typically written by an attorney, often taken as a first formal step to ask a party to stop performing an illegal activity. A cease and desist order has legal power. A cease and desist letter is not legally binding, although a follow-up lawsuit could be.

Understanding the Two Types of Cease and Desist

As noted above, the two types of cease and desist have different levels of legal power and require different responses.

Cease and Desist Order

A cease and desist order places an injunction on a company or person prohibiting the activities that are deemed suspect. A cease and desist order may take the form of a temporary injunction until a trial can be held to determine the outcome or a permanent injunction after the trial concludes.

Whether temporary or permanent, a cease and desist order is legally binding. Such an order is issued by a government agency or court when it has been convinced that there is reason to believe an illegal or harmful activity is taking place requiring the offender to stop the activity. Further action, such as a trial, may be needed, or the order may be permanent, depending on the situation.

A Cease and Desist Order...

A Cease and Desist Letter...

…is issued by a government agency or a court.

...can be written by anyone, typically an attorney.

… requires the offender to stop activity.

...asks the offender to stop activity...

...requires the offender to respond to an agency or court.

...requests a response from the offender.

… prohibits the offender from legally continuing activity.

...does not prohibit the offender from continuing the activity (but may subject them to possible legal action).

Cease and Desist Letter

As noted, the main difference between a cease and desist letter and a cease and desist order is one of legality. A cease and desist letter is not legally binding and reflects the opinion of an individual, typically an attorney. A cease and desist letter may serve to warn an offender that legal action may take place if they don't stop the activity. The offender is generally given a set time frame — usually 10 to 15 days — to respond.

A cease and desist letter must comply with laws in the jurisdiction where it is sent. In addition, the American Bar Association (ABA) Model Rules of Professional Conduct dictate that a lawyer “shall not present, participate in presenting, or threaten to present a criminal charge solely to obtain an advantage in a civil matter.” Such a threat has no legal significance other than being a negotiation tactic.

Cease and desist letters often require a signature upon delivery. The letter is typically sent with a return receipt requested, although this is not required.

Legal Considerations for a Cease and Desist Letter

A lawyer is bound by the ABA Model Rules of Professional Conduct. These rules prevent attorneys from presenting — or participating in — threats or issuing criminal charges in order to gain an advantage in a civil case.

Three preconditions usually must be met before an attorney may raise the prospect of charges without violating their professional conduct code.

1. The charges must be related to the civil matter at hand. Including a criminal charge that is unrelated to the civil claim in order to get an upper hand in the civil case is a deceptive tactic that is frowned upon by the legal system. An attorney who breaches trust by maliciously misrepresenting a case or making a false claim is deemed to be engaging in misconduct and would be severely penalized.
2. The attorney must believe the civil claim and associated criminal charges are based on merit in relation to the law. A claim that is unfounded and without merit can expose the attorney to a potential counterclaim of allegations of embarrassment by the person who received the cease and desist letter. In addition to making frivolous claims, if the attorney obtains evidence that violates the right of the recipient of the letter, they will be found in violation of the Model Rules of Professional Conduct.
3. An attorney must not attempt to exert or improperly influence the criminal process. An attorney who tries to influence the legal outcome following a cease and desist letter through illegitimate means such as bias, duress, or fraud, may be found to have tampered with the legal system. For example, consider an attorney who notifies a recipient that if they adhere to the client’s demands spelled out in the letter, the recipient will avoid criminal charges being brought. In legal terms, this notification could imply that the attorney can achieve results that violate the ABA Model Rules of Professional Conduct. Since a lawyer must not appear to have authority over the potential judicial proceedings, they cannot make any promises.

A lawyer who is considering sending out a cease and desist letter on behalf of their client must satisfy the above preconditions so that their capability as a lawyer is not called into question.

Anyone can send a cease and desist letter; one does not need to have an attorney compose one. However, an attorney can advise the complainant on whether their rights have been violated and if they have legal and meritorious rights to send a cease and desist letter. In addition, the attorney should know the correct language to use.

Cease and Desist Examples

There are four major areas where the use of cease and desist orders or letters are prevalent and justified: intellectual property, harassment, character defamation and libel, and contract violations, including unfair labor practices or unfair compensation.

Cease and desist orders or letters are most common in issues of intellectual property, harassment, character defamation and libel, and contract violations.

Remember that, while anyone can write a cease and desist letter, a cease and desist order must be issued by a court or other entity with the legal right to do so. If you are served with a cease and desist document, examine it carefully — with legal advice, if necessary — to determine who sent it and what status it has.

Intellectual Property

Someone who duplicates work that is under trademark, copyright, or patent without permission will likely receive a cease and desist letter or order. For example, an owner of a website who plagiarizes and hosts content from another website without the right to access the content risks copyright infringement charges and may be served with a cease and desist.

Harassment

A person who repeatedly contacts or threatens another person can be given a cease and desist letter as a warning. According to the Fair Debt Collections Practices Act (FDCAPA), third-party debt collectors cannot harass, oppress, or abuse anyone in a bid to collect a debt owed.

A debt collector who consistently and frequently calls a debtor may find a cease and desist letter in their mailbox. In more egregious cases a cease and desist order may be sought and issued. A restraining order is a special type of cease and desist order used in cases of stalking or intimidation, and rules vary by state.

Character Defamation and Libel

Whether in print or verbally, it is illegal to make untruthful comments about another person that could be harmful to their reputation and business. An individual who engages in such behavior should not be surprised to hold a cease and desist in their hands. For example, an individual who spreads unfounded rumors about the products of a seller may be issued a cease and desist letter — or even order — since their words may affect the ability of the seller to make sales.

Contract Violations

A party violating the terms of a contract may be a reason for issuing a cease and desist letter or order. In the hedge fund sector, for example, employees usually must sign a non-compete agreement. This means that if the employee leaves the company, they cannot take the financial materials and clients of the hedge fund with them.

In the case that an employee leaves to start their own fund and solicits clients from their previous employer, the previous employer can send or have issued a cease and desist letter, warning the employee of a potential criminal charge as a result of breaching the contract.