When Employers Sue Over Previous Employment Contracts
Many employees, as a condition of their employment, are forced to sign documents in connection with their employee handbook and other agreements, requiring that they not compete with the company (in a very specific, illegal way), divert interest away from it, or otherwise act in contravention of the company’s interests (including soliciting the company’s employees away from it). This also usually includes promising not to solicit any of the company’s clients or business, or use any of the company’s proprietary information (aside from what is required to do your job while working there).
When you leave your place of employment for another job or to start your own business in the same or a related field, this is where relationships can sometimes go awry, and breach of contract and/or tortious interference with employment contract allegations can arise. Below, we discuss these claims and how to distinguish them from what is legally permissible.
Wells Fargo v. Satter
Take for example a recent high profile case filed by Wells Fargo in Ohio, whereby the company is now accusing one of its previous attorneys of stealing proprietary information and violating company policy in the form of employee contracts that he signed after leaving and forming his own law firm. The case brings up the crucial question of just where the line is drawn between simply using information learned from one job in the next, perhaps not doing your job as your employer (arguably) expected, using confidential information and/or trade secrets, interfering with client relationships, and/or ‘stealing business assets under management.’ In other words, the question ultimately becomes: what distinguishes a business that has been wronged from one that is simply trying to prevent another from competing in the free market?
Allegations Brought in Former Claims
The Wells Fargo litigation involved the following allegations to support breach of contract and tortious interference claims:
- Simultaneous, coordinated departure of numerous employees in connection with one particular employee
- That the employee(s) used their possession of confidential and privileged information regarding the company’s particular approach to conducting business to advise and assist other employees in their departure from the company
- In doing so, the employee(s) coordinated departure from the company, created a new entity or obtained other employment, and unlawfully competed
Columbus, Ohio Business Torts Attorneys
There are a number of actions that can give rise to breach of contract and business tort claims; as a result, you want to make sure that any and all questions or concerns in connection with these legal areas are discussed with an experienced legal business representation.
Kohl & Cook Law Firm, LLC is just that. Contact our Columbus business torts lawyers today to find out more.