Workers, company can be held liable for torts
Published 10/02/01

Competitive forces seem to increase in a declining economy, so workers need to know that there are legal parameters of acceptable competitive behavior.

In addition to antitrust statutes aimed at curbing anti-competitive behavior among larger corporations, the torts of wrongful interference with a contractual relationship, and wrongful interference with a business relationship offer additional basis for redress against certain types of anti-competitive conduct.

Individuals who in their capacity as a worker, agent, and/or officer of a company commit these torts may also be personally liable in addition to subjecting the company to liability. The workers do not get protection from personal tort liability merely because their employer is a corporation, a limited liability company, or other legally recognized entity.

A worker (and its employer) can be liable for the tort of wrongful interference with a contractual relationship if it is proven in Court that there was a contractual relationship between two other parties, that the worker knew of that relationship, and that the worker wrongfully induced one of the parties to breach the contract.

For example, if a worker as a sales representative convinces a competitor's customer to breach its contract and sign up with the worker's employer, that worker may be subjecting himself and its employer to a wrongful interference with a contractual relationship liability. If, on the other hand, a competitor were to lose customers to that worker's employer because both that worker and its employer in general provides better services and/or prices to it customers, then it is likely a Court would find there is no wrongful interference with that contractual relationship.

As to the tort of wrongful interference with a business relationship, that can take place when someone through some predatory behavior interferes with a business relationship of a competitor.

For example, if a worker were to go to a competitor's store and attempt to induce potential customers to leave that store and come to his employer's store, it is quite possible the Court would find that type of predatory behavior as wrongful interference with a business relationship.

Likewise, if a worker were to specifically target a competitor's vendors or customers not only to increase his employer's market share and business, but also as part of a scheme to directly cause the competitor financial hardship, such predatory behavior could likewise be found by a Court to be a wrongful interference with a business relationship.

It should also be noted that since these types of tort claims allege intentional conduct on behalf of the worker and his company, it is highly unlikely that there would be any type of insurance coverage to pay for the defense costs of such a suit, or coverage for any monetary damage that might be awarded by the Court since coverage for intentional conduct is generally excluded in most insurance policies.

Workers for companies who are being victimized by conduct which they believe may possibly constitute the tort of wrongful interference with a contractual relationship or wrongful interference with a business relationship should speak with their employer so that the employer may speak with its legal counsel to determine what, if any, action may be taken against its competitor and the workers who are participating in that conduct. Such action may include a suit requesting an injunction order from the Court prohibiting such wrongful conduct and seeking monetary damages.

J. Daniel Marr is a director and shareholder at Hamblett & Kerrigan, PA whose legal practice includes counseling businesses and business persons on a variety of legal issues and advocating on their behalf. Attorney Marr is also an adjunct professor at Daniel Webster College where he teaches business law. You can reach Attorney Marr by e-mail at: dmarr@hamker.com

This information is general information and may not reflect the most current legal developments, verdicts or settlements. The information provided should not be relied upon as an indication of the actual state of the law or of future developments. The information contained on the Hamblett & Kerrigan website is for informational purposes only and does not constitute legal advice. If the information referenced may be of legal importance to you, you should consult with an attorney to provide you with legal guidance and opinion as the the effect of the current law upon your situation.