Loyalty doesn't require written agreement

Worker loyalty to an employer stems from the mere existence of the employment relationship.

A worker doesn’t have to have a confidentiality agreement to prohibit him from misappropriating or disclosing company trade secrets to third parties. Not only would such an action make him liable under his general duty of loyalty to the employer, but such an action could also subject him to liability under the New Hampshire statutory law, the Uniform Trade Secret Act.

Also, a worker who has not signed a noncompete agreement that goes into effect after leaving his employer cannot contact customers of his employer to see if those customers would go with him if he should start a new, similar business. Such action would be inconsistent with his loyalty obligation to his employer, and that worker could quite possibly be liable for any damages the employer sustained.

If the worker, after leaving his employment, seeks out these customers, as long as the now former worker does not induce the customer into breaching an existing contract with his former employer, generally there would be no liability to the worker. That would change if he had signed a covenant not to compete or other agreement prohibiting him from soliciting or accepting business from these customers.

Another example of a worker’s breach of loyalty would be when the worker usurps an employer’s opportunity. This can be a particularly difficult issue when the worker is not only employed by the employer, but also performs outside consulting work, like so many skilled workers do in the high-tech industry. If a worker, while employed at one company, learns of a business opportunity that the employer is seeking, then uses that knowledge to acquire that business opportunity for his own direct benefit, the employer might have a claim for breach of loyalty.

To the extent that the employer and worker have tried hard beforehand to define as clearly as possible in writing their obligations to each other regarding such potential conflicts of interest, they will be in a much better position to understand their relative rights and obligations.

Also, a court would have the benefit of interpreting the actual agreement between them, rather than applying the general duty of loyalty to the particular facts of the case.

Lastly, a worker’s duty of loyalty does not include participation in illegal activities or hiding those activities. Such actions could result in individual criminal liability for the worker.

There are also some statutory and common law protections for workers who report actions they believe to be criminal or civil transgression by their employer to the appropriate government authorities.

However, to ensure those protections are available, the worker would be prudent to consult legal counsel before reporting any suspected transgression, so it is done in a way to maximize the worker’s legal protections.