In a previous post, we mentioned that the “Breach of Duty of Loyalty & Breach of Fiduciary Duty” is another primary reason or consideration for an employer to assert a cause of action against an employee who has misappropriated trade secrets or confidential information. To move the discussion forward, this blog and Part VI of the series is an overview of “Breach of Contract” as the second “Consideration for an Employer when Drafting a Complaint & Asserting a Cause of Action” in the same regard.
Breach of Contract
People break promises all the time, and so do employees when it comes to contracts. Breach of contract is, as you would expect, the most commonly asserted cause of action when it comes to restrictive covenants & and/or trade secrets. In most cases, employers have pointed to a specific violation as a breach of whatever contractual agreement containing particular covenants, especially for an employee being sued for violating one or more of a set of contracts. This implies that employers should include contract breach claims premised on a given agreement in any lawsuit filed against employees sued for allegations of having violated restrictive covenants. Importantly, every employer should, as a best employer practice, ensure that even where seeking injunctive relief, such as through a preliminary injunction (PI) or a temporary restraining order (TRO), they make sure that a claim regarding a contract breach has been included.
When it comes to the misappropriation of trade secrets, claims regarding the breach of contract carry more weight during lawsuits. This is because restrictive contractual agreements and employment agreements comprise one or more clauses that restrict an employee from disclosing and using confidential information, as well as protecting such information from being accessed, obtained, disclosed, and used without prior permission. This implies that employers should ensure that their claims on the breach of contract invoke any covenants and/or provisions of confidentiality or non-disclosure embedded within the employment contract or agreement, should they suspect that their trade secrets or other confidential information has been improperly accessed, acquired, disclosed, or used.
Stay tuned for Part VII of this series, in which we shall move the discussion forward by hammering on “Tortious Interference with Contract” as the fourth consideration for an employer to draft and assert a cause of action for a trade secret misappropriation and/or a breach of a restrictive covenant/agreement.
In the meantime, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer, Author, & Publisher.