Wednesday, April 7, 2010

Illustrating the duty of loyalty

About a month ago I wrote about the an employee’s duty of loyalty to his or her employer. Here’s some of what I said:

Just because an employee is not subject to a noncompetition agreement does not mean that he or she cannot be liable for mistakes made on the way out the door. In fact, each and every employee owes his or employer a duty of loyalty up to the moment he or she ceases employment.

Two recent stories illustrate how this duty of loyalty works in the real world:

Even without non-competition agreement, an employee cannot serve two masters at the same time. While in your employ, an employee has an absolute duty to act in your best interest, and not to act in the interest of anyone else that is contrary to yours. For example, an employee cannot solicit customers or employees for a competing venture while still working for you. If you find out that a current employee might be competing, your best course of action:

  1. Call your attorney.
  2. At a minimum, suspend the employee pending an investigation, which should also include suspension of all computer and network access.
  3. Upon confirmation of the competition, convert the suspension to a termination.
  4. Consider legal action depending upon the scope of the competition and the harm caused.

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or