Does an Employee Owe a Fiduciary Duty to an Employer?

Let’s imagine that you have an employee who steals your confidential information he or she obtained while working for you or even your trade secrets. That employee, upon leaving your employ, uses that information to harm your business, or start his or her own business. That employee also calls your other, current employees, and gets them to leave your company for theirs.

The problem—you may think—is that you didn’t have any agreements in place—no noncompete agreements, nonsolicitation agreements, no confidentiality agreements—all documents that would make it very easy for you to just sue the now former employee.

Are you out of luck? While it is always better to have written agreements for these things, it turns out you still may have an avenue to sue for damages for what this former employee did.

Fiduciary Duty of Loyalty

That’s because many people aren’t aware that even a standard, mid-level employee owes a duty of loyalty to the employer under Florida law. To owe this duty, the employee need not be a higher level employee, like a manager or officer.

That’s not to say that an employee can’t make plans to open a competing business, or take measures to employ him or herself, after employment with your company ends. The duty of loyalty owed by an employee merely consists of the employee’s duty not to use your company’s time, equipment, or personnel, to plan to move to another company, while the employee is still working for your company.

This includes a prohibition on even casually asking your other, current employees whether they would want to follow that employee to work elsewhere.

Misusing your business confidential customer information is also a breach of the employee’s duty of loyalty.

Even if information isn’t technically defined as a trade secret under Florida laws, an employee still breaches his or her duty of loyalty by using any of an employer’s confidential information for the employee’s personal benefit, while working for the company.

While an employee is legally allowed to work as many jobs as he or she wants (so long as you don’t have a contract in place to prohibit this), an employee cannot use your company’s time or resources, to benefit him or herself, personally.

Using Good Faith

Although it is admittedly “squishy” as a concept, courts will ask whether an employee acted in good faith towards an employer, and if not, the employer may have a claim for a breach of loyalty.

None of this is to say that you don’t need documents like noncompete agreements or Non solicitation agreements—you do, and should use them.

It just means that if you don’t have them, or if certain employees have not signed them, you do have recourse, should that employee start misusing information or resources from your business, to help him or herself.

Let us help you protect your valuable trade secrets. Contact our West Palm Beach business litigation attorneys at Pike & Lustig for more information.

Source:

investopedia.com/ask/answers/042915/what-are-some-examples-fiduciary-duty.asp