There seems to be no shortage of information or publicity pertaining to employers’ obligations to employees. Less known are the myriad of non-contractual duties or responsibilities which employees owe to their employer. The following duties are either owed to the employer as a matter of law, or can be created with employees by appropriate notice, contract, or other planning on the part of the employer:
1. The Duty of Loyalty. Employees are legally obligated to serve the interest of their employer, meaning that personal use of the employer’s facility, supplies, equipment, or time (for which the employee is paid) is not permissible, and theft, self dealing, and usurpation of business opportunities are prohibited.
2. Honesty. An employee is required to be completely honest with the employer, whether the communication be written or verbal. Misrepresentations and omissions by the employee can represent violations of this duty.
3. Employee Productivity. In order for the employer to receive an honest “days work” in return for employment, the employer must accurately describe the employee’s job responsibilities and compensation plan as well as disciplinary systems that the employer has in place. Failure to properly describe these aspects of the employment relationship may result in some employers having to retain employees who are contributing little or nothing by virtue of their employment.
4. Post-Employment Duties. Even without a written employment agreement, employees still owe a duty of loyalty to employers and are prohibited by law from soliciting customers or advancing their own business opportunities while still employed. Employees are also prohibited from using or disclosing certain confidential information of the employer.
5. Protection of Employer’s Confidential Information. If the employer makes some effort to protect the confidentiality of certain trade secrets or business information, that information may not be used by the employee even without a written contract. Business records are separate from what the employee has been able to mentally retain over the course of the employment or his or her career, and such information does not legally qualify as a trade secret.
6. The Duty to Comply with Employer’s Rules. An employee is obligated to observe all policies and procedures created and implemented by the employer. Obviously, the policies and procedures must be legitimate or legal in order to be binding upon the employee.
7. The Duty to Actually Show Up for Work. In most instances involving smaller companies, the principal of “at will” employment will suffice in dealing with an employee who is frequently absent from work. On the other hand, a wide variety of federal and state legislation have made it more difficult for employers of large work forces to deal with absenteeism. Therefore thorough planning in the creation of specific policies is necessary to successfully manage problems related to absenteeism.
8. Conflicts of Interest. Again, an employee has a duty of loyalty to an employer which in some instances can protect an employer even absent a written agreement.
9. Assignment of Inventions or Copyrights. Employees generally do not retain an ownership interest in inventions or copyrights developed during the course of employment. There are instances when the issue of ownership or participation in the creation of an invention or copyright is not perfectly clear, and therefore it is best to plan for these situations at the commencement of employment.
10. Reimbursement Issues. Generally speaking, employees are entitled to compensation for work performed without employer imposed set-offs for advances, theft, carelessness, intentional sabotage by an employee, unearned commissions, etc. In the case of contract or term employees, the employee is expected to perform faithfully the services for which he or she contracted for the entire term or period of service. Courts presently hold that if an employee leaves before the term expires, the employee is entitled to payment for work done, pursuant to the theory of “quantum meruit”, less what the employer lost by necessity of paying higher wages to the employee’s successor, or the amount lost by the employee’s failure to perform the contract.
While the law recognizes a number of significant duties which are owed to the employer by the employee, employers can and should take additional steps to reinforce, supplement, implement and enforce those duties through a written employment agreement. The importance of employment agreements, whether they set out the parameters of an “at will” hourly arrangement or a salary “term” relationship, cannot be overrstated in this day and age, when investment in employees and protection of intellectual property costs employers a great deal of revenue and time. A properly drafted employment agreement can add a vital layer of protection for the employer.
Richard A. Saliterman & Boris Parker
