Here at the Law Office of Vincent Miletti, Esq. and the home of the #UnusuallyMotivated movement, we take pride as a resilient and dependable legal services firm, providing such services in both a traditional and online, web-based environment. With mastered specialization in areas such as Employment and Labor Law, Intellectual Property (IP) (trademark, copyright, patent), Entertainment Law, and e-Commerce (Supply Chain, Distribution, Fulfillment, Standard Legal & Regulatory), we provide a range of legal services including, but not limited to traditional legal representation (litigation, mediation, arbitration, opinion letters, and advisory), non-litigated business legal representation and legal counsel, and unique, online legal services such as smart forms, mobile training, legal marketing, and development.

Still, we, here at Miletti Law®, feel obligated to enlighten, educate, and create awareness, free of charge, about how these issues and many others affect our unusually motivated® readers and/or their businesses. Accordingly, to achieve this goal, we have committed ourselves to creating authoritative, trustworthy, & distinctive content. Usually, this content is featured as videos posted on our YouTube Channel https://www.youtube.com/channel/UCtvUryqkkMAJLwrLu2BBt6w and blogs that are published on our website WWW.MILETTILAW.COM. With that, the ball is in your court and you have an effortless obligation to subscribe to the channel and sign up for the Newsletter on the website, which encompasses the best way to ensure that you stay in the loop and feel the positive impact of the knowledge bombs that we drop here!

As the authoritative force in Employment Law, it only seemed right to introduce one of the many upcoming series in which we introduce a variety of topics that looks to educate and deliver in a manner that only Miletti Law® can. In this regard, this blog is Part V of our ongoing series on “Trade Secret Misappropriation & Restrictive Covenant Claims.” In Part IV, we provided you with an overview of “Misappropriation of Trade Secrets,” a 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 V of the series is an overview of “Breach of Duty of Loyalty & Breach of Fiduciary Duty” as the second “Consideration for an Employer when Drafting a Complaint & Asserting a Cause of Action” in the same regard.

Breach of Duty of Loyalty & Breach of Fiduciary Duty

By way of backdrop, let us understand what we mean by “fiduciary duty.” In the context of employment in many states, a breach of fiduciary duty applies under the doctrine of the faithless servant, such as in the case of a breach of loyalty. For instance, in New York, while any actions inconsistent with one’s trust or agency are prohibited, the law requires all employees to comply with their unflinching duty of exercising the utmost loyalty and faith when performing their duties. This implies that before drafting complaints and asserting causes of action, employers should investigate how different types of causes of action involving a breach of such loyalty are characterized by courts in their states and within the employment context.

In that regard, such a breach is another important reason an employer may wish to assert a claim against an employee who has misappropriated a trade secret and/or breached a restrictive covenant. This happens especially since employees may behave in ways not in the employer’s best interests to benefit themselves but end up hurting the employer. However, the viability of such a claim is highly influenced by whether the employee carried out the misconduct before leaving the employer. Let us take an example of an employee working for an employer dealing with a pharmaceutical company. While still working for this employer, the employee influences and induces this employer’s client to close business operations and leave for a competing employer whom the employee later joins after resigning with the current employer/pharmaceutical company. In such a scenario, while the employer may bring a claim against the employee for violating the duty of loyalty or fiduciary duty, a court may hold that the employee is in violation of a restrictive covenant entered between them and their former employer.

Under similar circumstances, the employee may also use improper means to gain access and obtain the former employer’s confidential information and/or trade secrets and then disclose them to the rival employer they left for. In such a scenario, the former employer may draft complaints and assert causes of action against such an employee for various misconducts that include breaching restrictive contractual covenants, misappropriating trade secrets or confidential information, breaching duty of loyalty, and/or breaching fiduciary duty.

Stay tuned for Part VI of this series, in which we shall move the discussion forward by hammering on “Breach of Contract” as the third 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.