Can I sue an employee for his wages as he started a competing business while working for me?
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Can I sue an employee for his wages as he started a competing business while working for me?
I have a company and one of my managers, and a former employee, started a company at least 6 weeks before he resigned. I have documentation of the dates as he left his private e-mail activated on a work computer. He did not sign a non-compete. I have full documentation of a lot of his activity while employed with me that shows he was actively involved in a competitive venture.
We have been trying to update our employee manual, but I am not certain if the one that was in use at the time of his hire was given to him. However, there is a paragraph in it that discussed competitive employment.
Asked on November 29, 2015 under Employment Labor Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
No, as a general rule, in the absence of a non-competition clause in a written contract or agreement, there are no grounds to sue an employee for competing with his employer. You would only have a viable claim against him if:
1) He used proprietary business information (e.g. customer list[s]) which he only had access to as part of his employment to launch his competitive business. In this case, it is the misppropriation of your business property which would give rise to a cause of action, and you could sue for competition and for an injunction (court order) to stop him from using your proprietary information.
2) You can prove he worked on his own business during work hours for you, in which case you could sue to recover the salary, wages, etc. paid him during that time, since by not actually doing work for you while he was being paid to work for you, he in essence "stole" his wages.
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