Tortious Interference of Contract / Business Expectancy – and what every Virginia employee should know

Dear Virginia employee:

Whether you signed an employment agreement or not, you owe various legal duties to your employer.

Nope, its true.

And two of these unspoken duties, are that you will not interfere with your employer’s contracts or business expectancies.

So what does that practically mean?

Under Virginia common law, if an employer can prove:  (a) it had a contract/business expectancy; (b) an employee had knowledge of that expectancy; (c) employee intentionally interfered with its business expectancy (d) through improper means or methods; and (e) your former employer was damaged as a result, then the employee might be facing a suit for tortious interference of contract or business expectancy. [1]

Examples of breach:

  1. Starting competing business and called old clients with the intent to get them to stop doing business with old company 
  2. Telling customers you are going to leave (while you are employed) and ask them to go with you and breach contract with old company.

 Why does this happen?

  • Employees assume the customers are theirs.
  • No non-compete so employees assume this is allowed.
  • Employee has given notice and thinks that changes things.
  • People tell customers before employers they are leaving.

 Burden of proof:

Employer must prove all of the above elements under Virginia law, including improper methods.

 Courts however have evolved on their understanding of the term: Methods considered “improper” include those that are illegal or independently tortious. Obviously, the requisite improper methods must have occurred prior to the termination of the contract in order to constitute the cause of the termination.[2]

Damages:       Again, must prove actual damages.

 NEW EMERGING TORT OF HIRING EMPLOYEE WITH A NON-COMPETE, ASKING THEM TO COMPETE IN BREACH — deemed tort. interference

However, if Company B hires one of Company A’s former employees and obtains and uses Company A’s “inside or confidential information,” or otherwise engages in “unfair competition,” such acts constitute “improper methods or means” and thus support a claim for tortious interference with Company A’s terminable at will…[3]

So, the more you know, hopefully, the less likely you are to breach your duty… or at the very least, get sued.


[1] Maximus, Inc. v. Lockheed Information Management System, Co., 254 Va. 408 (1997); Glass v. Glass, 228 Va. 39, 321 S.E. 2d 69, 77 (1984).

[2] See Hilb, Rogal and Hamilton Company v. DePew, 247 Va. 240, 246 n.4 (1994).

[3] Depuy Synthes Sales, Inc. v. Jones, 2014 U.S. Dist. LEXIS 37727, 13-14 (E.D. Va. Mar. 21, 2014) Note 2.

 

Lauren Ellerman

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.