Chapter § 8.5

• Jurisdiction: New York

[8.5] What is the employee's common law duty of loyalty?

An employee owes a duty of good faith and loyalty to the employer in the performance of the employee's duties. An employee breaches that duty by using the employer's time, facilities, or confidential information for personal gain, or by acting in a way that is harmful to the employer.²¹

For example, an employee violates the duty of loyalty by making his or her own personal expenses appear to be employer expenses.²²

Similarly, an employee who used his or her employer's proprietary secrets to build and conduct a competing business while still in the employ of his or her employer has breached his or her duty of loyalty.²³

Likewise, an employee who created a company which then overcharged his or her employer for shipping goods overseas violated his or her duty to the employer.²⁴

A breach of the duty of loyalty arises when an employee, while still employed, accepts employment with a competitor or uses his or her employer's property, including confidential information, to benefit himself or another.²⁵ The duty may be...