HCBE Faculty Articles

Title

The Duty of Loyalty in the Employment Relationship: Legal Analysis and Recommendations for Employers and Workers

Document Type

Article

Date

2018

Publication Title

Journal of Legal, Ethical and Regulatory Issues

ISSN or ISBN

1544-0044

Volume

21

Issue

3

First Page

1

Last Page

27

Description

Capitalism, free markets and competition are all concepts and practices that are deemed to be good for the growth, development and sustainability of the economy while also benefiting consumers through more variety and lower prices. Of course, this assumption only holds true if markets and competition are open, honest and fair to all parties involved, including employers as every organization is entitled to faithful and fair service from its workers. The common law duty of loyalty in the employment relationship ensures fair competition and faithful service. Of course, a duty of loyalty is often violated when an employee begins to compete against his or her current employer. As such, the employee must not commit any illegal, disloyal, unethical or unfair acts toward his/her employer during the employment relationship. Accordingly, in this article, we provide a review of how the courts “draw the line” between permissible competition and disloyal actions. We discuss the key legal principles of the common law duty of loyalty, their implications for employees and employers and we provide practical recommendations for all parties in the employment relationship.

Peer Reviewed

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