As a business owner, you may have a just cause to sue an employee, however, having the right documents and agreements in place can avoid a great deal of these scenarios. The Bureau of Labor Statistics indicates that most people hold over 10 jobs in their lifetime. With such mobility in the workforce, oftentimes, employees are not as loyal to an employer as in past decades and may act inappropriately or unethically. Contacting a business attorney to help you create documents as a small business owner for employees to sign can help protect your business and your rights. These are the most common reasons an employer can sue an employee.

Negligence

Most employees are not liable for any company negligence. However, if an employee exhibits extreme negligence outside the normal scope of a reasonable person, or outside the official duties of their job, these instances could allow an employer to sue an employee.

Non-Compete Clauses

As an employer, you are allowed to establish firm and legally binding non-compete clauses in your employment contracts that limit the ability of an employee to work in a particular field or area of business, for a specified period of time, within a specified geographic area after they leave your business. In many cases, if your agreement was not unreasonably restrictive, and signed in good faith by both parties, a court may uphold your right to sue a former employee for breach of contract.

Non-Solicitation Agreements

An employee is not allowed to take customers away from their current employer and siphon their business off to their new business or new employer after they leave. If you find an employee has done this, and not acted in the best interests of your company while they worked there, you may be able to sue your former employee.

Breach of Fiduciary Duty

Officially titled “usurpation of corporate opportunity” this is when an employee acts in his or her own best interest instead of that of the company. Employees are not allowed to manipulate or solicit contracts for themselves before their departure from the company.

No Raid Provisions

If an employee decides to leave employment for a new company and has also persuaded or solicited coworkers to move as a unified group to the new company, this is likely prohibited by a “no raid” clause in the employment contract. This type of behavior can be considered a breach of contract, and an employer can legally sue an employee for this type of activity.

Employee Theft

If an employee steals actual physical property such as printers or computers, it would, of course, be considered theft. However, there can also be theft of trade secrets and intellectual property from a company. The Defend Trade Secrets Act defines misappropriation as “the acquisition of the trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means,” or “the disclosure or use of the trade secret without express or implied consent.” If an employee is found to have engaged in this type of activity, an employer will be able to sue for damages.

Defamation

If a former employee announces fabricated and erroneous information regarding their previous employer, which may or may not result in economic damage to the company, an employer will be able to sue the former employee for defamation.

Contact an Experienced Business Attorney

Many of the above scenarios can be avoided, or your rights as an employer can be protected, if you have the correct legal documents established and signed with your employees when they first start with your company. Contact a small business attorney experienced with the development of such contracts and agreements here.

Contact an Experienced Business Attorney