Martindale-Hubbell Peer Rated
Super Lawyers - David H. Ben AsherSuper Lawyers - Jonathan I. Nirenberg
Rabner Baumgart Ben-Asher & Niremberg PC
Bergen County's Top Lawyers 2023

Duty of Loyalty

New Jersey Duty of Loyalty Lawyers

Duty of LoyaltyEmployees who work in New York and New Jersey have a legal duty of loyalty to their employers. In general, this means you cannot do something that is contrary to the interests of your employer until after your employment relationship is over.

If you violate your duty of loyalty to your employer, it not only could fire you, but it also potentially could sue you for money damages.

There are numerous ways an employee can breach his duty of loyalty. For example, you could misuse your employer’s confidential or proprietary information, use the company’s resources for your own benefit, make disparaging or negative statements about the business, or otherwise harm your current employer.

While all levels of employees owe a duty of loyalty to their employer, an employee's position with in a company is a key factor in determining whether his or her actions violated the duty of loyalty.  Specifically, higher level employees owe a greater degree of loyalty than lower-level workers.

Prohibition Against Working for a Competitor

One key restriction imposed by the duty of loyalty is that, even if you have not signed a non-compete agreement, generally you cannot work for a business that competes with your current employer until after your employment relationship ends. For example, you cannot open a business that sells the same or similar products, or provides the same or similar services, as the company for which you are working without your employer’s permission.

Of course, the duty of loyalty does not prohibit you from searching for a new job, interviewing, or accepting a job offer from a competitor as long as you do not start your new job until after you leave your current job. Likewise, it does not prevent you from taking initial steps to establish a competing business. For example, you can file the paperwork to form a corporation, sign an office lease, or develop a website.

However, you cannot actually advertise or make efforts to provide any goods or services on behalf of your new business.  You also cannot perform any activities to find a new job or open a new business during your working hours or use your current employer’s equipment, property or resources, including your current company's computers, cell phones or e-mail.

Working for another employer in violation of the duty of loyalty can have serious repercussions.  Aside from being responsible for any actual damages caused, at least in some situations an Employee Can Forfeit Salary he or she received from a competitor.  As a result, it can be important to speak to an experienced New Jersey duty of loyalty attorney who represents employees.

Prohibition Against Poaching Employees

Similarly, even if you have not signed a non-solicitation agreement, generally you cannot attempt to hire someone who works for your current employer to work for another business until after you end the employment relationship. For instance, if you are planning to leave your job and open your own business, you cannot offer a job to one of your current coworkers until after you have resigned and no longer work for the company.

Other Prohibitions

The duty of loyalty also prohibits you from taking potential business opportunities for yourself or for a competing business rather than providing them to your current employer. This is sometimes referred to as a misappropriation of a corporate opportunity. Likewise, you could violate your legal obligations to your employer if you chose not to tell your company about such an opportunity.

At Rabner Baumgart Ben-Asher & Nirenberg, P.C., our New Jersey duty of loyalty attorneys represent employees who need advice to help avoid them from becoming the subject of a legal claim, or to defend them against a claim or lawsuit. We welcome you to call us at (201) 777-2250.

Continued Responsibility After You Resign

Although the duty of loyalty primarily applies while you are working for your current employer, you continue to owe a limited duty to your former employer after you stop working for it. For instance, you have an ongoing obligation not to use your prior employer’s trade secrets or confidential or proprietary information. For more information, you may want to read our article: New Jersey Passes Trade Secrets Act.

Of course, if you signed a restrictive covenant such as a non-compete or non-solicitation agreement, those restrictions typically continue for a period of time after you have left your job.

Contact Us

If you have any questions, or would like to schedule a consultation with one of our New Jersey duty of loyalty lawyers, please contact us online or call us at (201) 777-2250.

Client Reviews
"I worked with Jonathan Nirenberg, ESQ on a sensitive emotional employment matter. Mr. Nirenberg was quick to respond, offered excellent advice, and always followed up with phone calls or emails when needed. My situation was settled out of court within a short period of time with the best possible results for not just me but also for the employer. Highly recommend and would seek his help again if needed..." Linda Busch, PhD
"We've had the pleasure of working with Jonathan on multiple individual and class employment cases. Jonathan is a skilled, dedicated and caring attorney that works diligently to bring justice for his clients. We would recommend Jonathan as a legal resource for any employment cases." Stephan Zouras, LLP
"I felt alone and without a voice, until I hired Jonathan I. Nirenberg of Rabner Baumgart Ben-Asher & Nirenberg, P.C. Mr. Nirenberg represented me in an employment matter. Without his help, I know that I would not have had the extremely successful outcome I had. Jonathan was not only professional, but very empathetic to what happened to me. Jonathan gave me support, and options in relation to a challenging employer/employment situation which was an extremely difficult time in my life..." Shelly Smith