When a party wrongfully induces an employee of another company to leave a job, that party may be liable to the employer for the economic losses that result from such interference. This type of a claim usually arises when a competitor company tries to induce key employees from other companies to come work for it. Wrongful inducement of an employee to leave employment may also happen outside the rivalries between competing businesses, but that is very rare.
The employer will usually need to prove the following in order to sue:
1. An employment contract or relationship existed between the employer and employee;
2. The inducer knew and intended to interfere with the employment relationship;
3. The inducer induced the employee to resign;
4. The inducement was wrongful; and
5. The inducement caused actual damages to the employer's business.
Typically, an inducement is wrongful if:
1. The inducer intended to harm the employer's business;
2. The employee's resignation constituted a breach of contract;
3. The inducer breached its fiduciary duty to the employer; or
4. The inducer intended to obtain trade secrets and other secret information from the employee.
Notice that proof of actual malice (i.e. ill will to do harm to the employer) is not an absolute requirement.
Yes. This claim covers both employees under a contract and "at-will" employees.
Generally no. The employee needs to actually leave employment or breach an employment contract in order for the inducer to be liable to the employer.
A person who is being accused of wrongfully inducing an employee to leave employment may raise the following defenses:
1. He/She was ignorant of the contractual or employment relationship;
2. The employee's resignation was not caused by him/her;
3. Inducement was not wrongful;
4. Inducement was legitimate business competition; or
5. Employer did not suffer any actual loss from the employee's resignation.
If you have been accused of wrongfully inducing an employee to leave a job, it will be beneficial for you to consult with an experience employment attorney. An attorney will evaluate you case and be able to help defend you in court if necessary.
Last Modified: 06-06-2012 04:11 PM PDTLaw Library Disclaimer
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