is it illegal for me to start a business that competes directly with my former employer. I did not sign a no compete clause?

While it may not be "Illegal" for you to start your own company, regardless of whether you signed a non-compete clause, your former employer may still have claims or causes of action that he could assert against you in a court of law.  I would certainly recommend that you consult with an attorney on the possible concerns and issues that may arise and how you can establish your own company and not take actions which would prompt a civil suit. Regardless of whether you signed an agreement, there are other federal and state laws as well as common law  claims which can afford protection to your former employer.  As I am not privy to the exact nature of the proposed company or the relevant facts and circumstances which would need to be considered, below is just a brief overview of the certain of the issues: 1.  The customers of your former employer could be considered proprietary information or an "asset" of the employer.  Thus, while customers, on their own, can freely decide with whom they would like to do business, the direct solicitation of customers of your former employer could open you up to claim such as tortious interference with contracts - a claim that an employee improperly sought to interfere with a contractual relationship between the company and a client. 2. If you utilize specialized or unique information relating to the company or its product or services, a claim under federal or state trade secret protection laws could be triggered.  Even customer lists, depending on the extent to which the company took measures to monitor and protect the confidentiality of their customer lists, could be considered actionable. 3.  Even the Computer Fraud and Abuse Act can afford civil remedies to employers whose employees seek to gain a competitive advantage through the unauthorized or improper use or theft from proprietary information from a company computer. 4.  There have been claims brought against former employees for "theft of business" opportunities where the former employee diverts an opportunity that he learned of while employed to another or for his own benefit. 5.  A claim for breach of an employee's duty of loyalty, good faith and fair dealing, again depending on  the circumstances, could arise if during the course and scope of your employment, the employer could show that you engaged in certain acts contrary to the employers interest. Again, consultation with legal counsel would be recommended so that an attorney could become acquainted with the relevant information in order to properly advise you on any new proposed venture you are contemplating. Hopefully, the above can provide some initial guidance and a general response to your inquiry. Marla D. Sones