Employee’s Duty of Loyalty to Employer

By Paul W. Norris on January 9th, 2024

Posted in Employment Law

While everyone is undoubtedly aware that an employee is not lawfully permitted to steal from his/her employer, the next logical question concerns what specifically are an employee’s legal obligations during their course of employment. In general, in New Jersey, an employee has a duty in the course of their employment to not act contrary to an employer’s interest, to not compete with an employer, and, further, to not assist an employer’s competitor. This duty exists whether there is a written employment agreement or the employee is solely “at will.” This duty of loyalty goes beyond refraining from privately soliciting the employer’s customers while still employed, but also prohibits the employee from taking affirmative steps to injure the employer’s business. This duty exists throughout the term of employment and, perhaps, thereafter, if the employee has a written employment contract.

Should an employee decide to leave their current employment, the applicable New Jersey law explains that employees have the right to plan and prepare for future employment, provided that they do not solicit customers and act in direct competition with their employer’s business while they are still employed. Merely planning their future employment without more is not a breach of an employee’s duty of loyalty and good faith to his employer. However, the agreement must be carefully reviewed as to any post-employment restrictions should the employee have an employment contract with their employer. Also, the employee must refrain from removing confidential or proprietary information that belongs to their employer for use in their future employment. Should they do so, they may be subject to a lawsuit from their previous employer.

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