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Beyond Non-Compete Agreements, Employees Have Fiduciary Duties to Employers

| Aug 24, 2016 | Business & Commercial Litigation |

One of the greatest risks to a company is the possibility that its employees could leak sensitive information or later compete against it.

Many companies take steps to protect their intellectual property and brand with non-compete and non-disclosure agreements, but companies should also be aware that they have legal rights beyond those contracts.

Even if an employee has not signed a non-compete agreement, he or she still has certain legal obligations to the employer, by virtue of the fact that under the employment relationship, the employee is acting as an agent of the company or employer and has fiduciary duties to the company.

If the employee acts in a way that harms the company, weakens its competitive advantage or jeopardizes intellectual property, the company may have options for exercising legal rights against the individual to protect the company and its position.

What are some of the obligations or fiduciary duties that an employee has to the company?

  • The employee must not compete with the employer.
  • The employee must not solicit or steal the employer’s clients or customers.
  • The employee must not use work time (or billable hours) to further his or her own interests.
  • The employee must not use information learned during his or her time of employment to compete against the employer.
  • The employee must accurately account for profits and be fair in transactions with the employer.
  • The employee must not misappropriate sensitive information, intellectual property or trade secrets after the employment is over, particularly for a new employer.

Handling matters involving breach of fiduciary duty can prove to be complex and full of nuance. It is critical that you have experienced legal representation on your side, advising you of your rights and providing a clear understanding of the options available to you.

Chenoweth Law Group is trusted by companies and businesses throughout Oregon and the northwest for its proven ability to protect a company’s intellectual property and competitive advantage. For more information about the representation Chenoweth Law Group can provide in dealing with a rogue employee, please click here.