Please note this blog post is written for employers, although we understand it may be of interest to employees as well. At this time, our firm only represents business owners and employers. If you need assistance with a legal matter as an employee, please consult a firm that represents employees.
If you are a small business owner suing an employee or former employee, you may have struggled to find good advice on how to go about it.
There are plenty of people who advocate for employees’ rights.
We frequently hear about issues relating to fair wages, discrimination, harassment, working conditions, etc. And there is plenty of advice out there for employees who want to sue their employers.
But employers suing employees? You may have to look harder to find the answers you need.
That’s where BrewerLong comes in. We are a full-service business law firm in Orlando, Florida. We can help you with every aspect of your business, including suing an employee who is hurting it.
“Businesses put a great deal of faith in their employees. In situations where an employee harms the business, there might be good reason to sue the employee for damages to the business.”Employment Attorney Michael Long
So let’s talk about a few of the ways you may be able to defend your business.
Breach of Contract
Florida is an at-will employment state, so for the most part, your employees have no contractual obligation to you.
However, there are some situations where you may enter into a written contract with an employee. This is especially common with more highly qualified employees who are more essential to your business or who may be privy to trade secrets.
So can an employer sue an employee for breach of contract? Yes. If your employee breaches a contract with you, it can cause your company to suffer financial loss. When this happens, you have the right to sue.
The following are several types of contracts that you might need to enforce against an employee.
Employees may have access to lots of proprietary information that you would not want to share with a competitor. Non-disclosure agreements, also known as confidentiality agreements, protect your trade secrets and other confidential information.
Under Florida law, non-disclosure agreements are enforceable when they reasonably protect a legitimate business interest. You may have a non-disclosure agreement aimed at protecting things like:
- Marketing strategies;
- Product prototypes and company research; or
- Client or customer details.
If an employee breaches a non-disclosure agreement, it can have devastating consequences for your company. By suing an employee for breach of a non-disclosure agreement, you should be able to get a court order preventing further disclosures.
You may also be able to recover monetary damages if your business suffered losses as a result of the employee’s actions.
Non-compete agreements limit an employee’s ability to work in a competitive business within a certain time after leaving your company.
They serve many of the same interests as non-disclosure agreements, as they prevent employees from taking your trade secrets or your client contacts to another business. Further, they may help you retain employees that you have invested in.
The legal requirements of non-compete agreements are similar to non-disclosure agreements in that they must be aimed at protecting a legitimate business interest. They also must be limited in duration and scope.
This means that you can only restrict the employee from working for a competitor for a limited amount of time after they leave you. Further, the restriction should be limited to the geographic area where you conduct business.
If an employee breaches a non-compete, you can ask for a court order precluding them from working in violation of the agreement.
Non-solicitation agreements are another form of non-compete agreement. You can use them to prevent employees from trying to steal your clients and customers. This type of agreement may also restrain an employee from trying to induce your other employees to work somewhere else.
Once again, Florida law requires these agreements to serve a legitimate business interest, and they must be limited in scope and duration.
If an employee breaches a non-solicitation agreement, a court can order them to stop communicating with the people they are wrongfully trying to solicit.
Most of the time, there is no formal contract between employers and employees. Employment is “at will,” and either the employer or the employee can terminate the employment relationship at any time.
However, there are some circumstances where you may elect to enter into an employment agreement. For example, if you have an employee with a rare talent that is valuable to you, you may want to offer them additional employment security.
Employment agreements may include terms such as:
- How the employee will be paid;
- How long the employment contract will last;
- Reasons the employee may be terminated;
- Notice the employee may be required to give before quitting; and
- The employee’s responsibilities.
Employment agreements also may contain non-disclosure, non-compete, or non-solicitation clauses.
If your employee has breached an employment contract—for example, by failing to fulfill their employment responsibilities—you may be able to sue for any financial loss resulting from the breach.
Theft or Destruction of Company Property
If an employee steals or destroys your company property, you can sue them for conversion. Conversion is a civil claim based on someone wrongfully depriving another of their property. Damages for conversion are based on the fair market value of the property taken or destroyed.
Your employee could also face criminal penalties if you choose to press charges for the theft. In this case, a court may order the employee to pay restitution by compensating you for the stolen items.
What can you do if an employee or former employee is telling lies about you or your business? Can an employer sue an employee for defamation? The answer is yes.
Defamation occurs when someone says something false about you that damages your reputation. To prove defamation, you must show that:
- The statement is false,
- The statement is negative,
- The statement was shared with a third party,
- The employee was at least negligent as to whether the statement was true, and
- The statement harmed you.
Truth is an absolute defense to defamation, no matter how damaging the statement is. But you do not have to sit by if an employee is spreading lies about you or your business.
Competition is expected when you are running a business, but you should not have to put up with someone intentionally sabotaging your business, especially when it’s one of your own employees.
In Florida, you can sue an employee (or any other third party) for tortious interference if they intentionally interfere with either your business relationships or your contractual relationships. For example, a former employee might try to induce your business contact to break a contract with you by offering to sell the same product at a lower price.
To prove tortious interference against your employee, you must establish the following elements:
- You have a contractual or other advantageous business relationship with a third party;
- The employee knew of the contract or relationship;
- The employee did something to intentionally disturb the relationship;
- The employee’s actions were not justified; and
- You suffered damage.
You don’t have to stand for someone trying to disrupt your business. Consider talking to a capable business lawyer about how you can protect your interests.
Contact a Business Lawyer
If you have an employee or former employee who is undercutting your business, the team at BrewerLong can help. We have extensive experience handling all types of issues affecting businesses.
Additionally, our practice focuses on employers. We know how important it is for you to protect your business interests, and we want to help. Contact us online or call us for a consultation.