We are the authoritative force in Employment Law, which is why we have been committed to creating content that introduces our readers to a variety of topics that look to educate and deliver in a manner that only Miletti Law® can. In this regard, this post is Part XI of our ongoing series on “Trade Secret Misappropriation & Restrictive Covenant Claims.” In Part X, we hammered on “Fraud & Abuse of Computers under the Computer Fraud and Abuse Act,” the seventh and last reason or consideration for an employer to assert a cause of action against an employee who has misappropriated trade secrets or confidential information.
At this point, we now switch gears and ask ourselves – what considerations should a former employer have when drafting a complaint & asserting a cause of action against the new employer? With respect to this question, this blog post is a discussion of “Considerations when Asserting a Cause of Action against the New Employer.” In the previous seven blog posts published under this series, we looked at the considerations an employer would have when drafting and asserting a cause of action against an “employee” who has misappropriated trade secrets. Just as in the case of the employee, it turns out the former employer can assert a cause of action against a “new employer” on the basis of tortious interference with contract. This is the matter of discussion in this post and Part XI of the series.
Considerations when Asserting a Cause of Action against the New Employer – Tortious Interference with Contract
As mentioned above and expounded in the post “Trade Secret Misappropriation & Restrictive Covenant Claims, VIII,” tortious interference with contract takes place when a former employee commits an act or acts intending to damage a former employer’s business or contractual relations with another party, with whom the former employer is in contract. In this regard, tortious interference with contract may be worth considering if an existing agreement between the former employer and another party is interfered with by the acts committed by an employee, and which have the potential to breach a restrictive contract.
It also goes without saying that, depending on the amount of evidence already gathered, the former employer may also consider asserting a similar cause of action against the new employer. For example, the former employee may have evidence that while they encouraged and/or induced the former employee to breach the contracts, the new employer or a competitor knew that the employee had signed restrictive covenants with the former employer.
In short, the former employer may assert a claim in the complaint if the new employer or competitor has gone ahead to encourage and/or induce the employee to accept employment with the competitor, despite the competitor’s knowledge that this employee had restrictive covenants with the former employer not to accept employment with the competitor. This would also be worthwhile if the new employer has actively helped the former employee solicit employee(s) of the former employer against their non-recruit or non-solicit agreements.
In the next blog post and Part XII of this series, we shall move on to “Abetting & Aiding Breach of Duty of Loyalty or Fiduciary Duty,” the second consideration an employer would have when drafting and asserting a cause of action against the “new employer” who has played a role in misappropriating trade secrets.
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.