Business Tort Series: An Employee’s Duty of Loyalty
As the global economy and technology continue to change and grow the workplace, the role of an employee has changed. Nevertheless, there is a sense of loyalty that an employee owes to his/her employer. But what does that mean?
An employee owes a common law “duty of loyalty” most frequently in the context of an employee’s fiduciary duty. A fiduciary means a person who holds a legal or ethical relationship of trust with one or more other parties (in this instance, an employer).
Most of the case law that has arisen in the last thirty years in the context of an employee’s duty of loyalty involves a breach of fiduciary duty in some capacity. This fiduciary duty of loyalty also extends to directors and officers of a business.
The facts of each situation drive what sort of breach there may be. Commonly, a conflict arises when an employee uses company information to the employee’s personal advantage and to the company’s detriment. It would be comforting if there was a hard and fast rule to show when the line has been crossed, but frequently there are varying court decisions on similar fact patterns. A general rule, however, is that the higher an employee’s level of trust or confidence with his/her employer, the greater the duty of loyalty that employee owes to the employer.
If you believe you might have an employee who may be breaching his or her duty of loyalty, our commercial group attorneys at MichieHamlett have the experience and expertise to provide you the advice you need to make an informed decision, and pursue litigation if necessary.