5 Reasons an Employer Should Sue an Employee

Employers can face a variety of problems with former or current employees. If an employee leaves a business and starts working with a competitor, essentially violating a non-compete agreement, a decision must be made: to sue or not to sue. Filing a lawsuit against a former employee comes with both risks and benefits. You want to determine the best strategy that benefits your company, your employees, and your clients.

5 Reasons an Employer Should Sue an Employee

Stealing Clients

Your employee signed a non-compete agreement, but then they left your company and began working for a direct competitor. Not cool. The agreement specified that the employee wouldn’t work for any competitor within a certain radius or time period.

That employee has the power to give your competitor more leverage in pursuing the pool of clients. Your former employee may have taken some of your business clients with them to your competitor. Lost clients means lost money.

Protect your Market Lead

When your former employee begins working for your competitor, the secret sauce of your business and market share lead is at stake. In any industry, the market shares are limited, and you want to maintain your slice of the pie. A loss of market share decreases your profit, damages your company standing, and impacts your employees.

A broken non-compete agreement is reason enough to sue. But losing your footing on your market share lead can be added incentive to take legal action against a former employee.

Safety of Your Trade Secrets

Trade secrets scratch a line in the sand between two different companies. If an employee leaves your company to work for a competitor, that difference loses distinction. And you may watch your business tank as you scramble to come up with another edge on your competitor.

Protecting your trade secrets is vital to the health of your business. Trade secrets in the wrong hands can be devastating to your business profit. You need to fight for your company’s future.

Too Short Notification of Resignation

An important employee who abruptly leaves your company could disrupt your business and workflow. Without the right preparation for the leaving of that employee, your business could suffer because that employee managed without tracking his or her process. Now, the business is missing your key employee as well as their knowledge of the workflow.

The company ends up losing money due to the disruption of workflow. A replacement must be found and trained without the input of the key employee who held that position previously. When a key employee gives little or no notification of resignation, this might be considered wrongful resignation.

Legality of a Non-Compete Agreement

Some employees believe that their former employer won’t take the necessary steps to hold them to the non-compete agreement. If a business doesn’t hold employees to the agreement, other employees may believe that they can get away with the same behavior. When an employee disregards their contract with an employer, the employer should file a lawsuit.


Other Reasons an Employer Might Sue an Employee

Briefly, an employer might find reason to sue an employee in any of the below situations. Every situation must be analyzed based on its own facts. A lawyer can be useful in determining your legal solutions.

  • Negligence
  • Breach of Contract
  • Failure to provide reasonable notification of resignation
  • Defamation
  • Breach of Duty of Fidelity
  • Damages
  • Theft
  • Interference with contractual relations

Some businesses are more competitive than others. An employee who leaves abruptly and starts to work for a competitor could upset your business, expose trade secrets, and drop your possible profits.

Key employees who had access to trade secrets could ruin the future of your company. Whether these employees begin their own business or are hired by a competitor, it may be worth your time to file a lawsuit for breach of contract.


If you believe you have a case, contact a KM&A employment attorney. Don’t hesitate. Call an employment attorney at 412-626-5626 or email us at lawyer@lawkm.com.