We just went through an ordeal dealing with this exact subject. My Hip Hop Teacher of three years (a dear friend of mine) just decided one day to quit and follow her own dream of opening a studio. Before she let on to this she took our whole client information database with her as well as the format of our dance studio. I was shocked and appalled to find she started her own studio that happened to have the same layout of schedule, same class names, and same basic ideas as my studio had, plus she opened it right down the street! Granted she does not have enough professional dance experience to make a whole studio run, but she advertised to and took over half of my students. I went straight to a lawyer which let me know that i could sue even without a non compete clause because she took the studios client list without permission. So my advise would be talk to a lawyer ASAP. to avoid this nightmare.