Can an Ex-Employee Be Sued by an Employer?

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Differences between current and former employees might wind up in court. The employee may have acted improperly and cost the company business. Employers also sue former employees for theft, stealing company secrets, or soliciting the company's clients after the employee leaves the company. Employers have sued former employees for resigning without providing proper notice.

Trade Secrets

Some industries are more competitive than others, which makes key employees more valuable because of their contacts with customers and suppliers. Ex-employees who leave those key positions to either start their own businesses or work for a competing company are more vulnerable to being sued for stealing trade secrets, whether or not such theft has occurred. Companies often ask key executives to sign non-disclosure agreements that, in their breach, might result in law suits.


When employers suspect that an ex-employee stole company funds, it could lead to a criminal investigation and a civil lawsuit against the ex-employee. While theft is grounds for immediate dismissal, the company also could sue the ex-employee for the amount of money that was stolen as well as the time and money spent investigating the theft.

Breach of Contract

Companies have sued ex-employees claiming the former employee's job performance was so poor or negligent that it caused significant loss of business or profits. Employees who are fired for unlawful conduct, failing to properly supervise employees, or failing to turn in important paperwork could be sued for breach of contract even after they leave the job. Companies could demand that the former employee return the salary he was paid, or reimburse the company for profits it lost.

Wrongful Resignation

When filling key positions that require specialized skills, employers need enough time to find replacements for resigning employees or the lack of qualified staff could disrupt the flow of business. Companies have sued ex-employees for failing to provide enough notice to allow the employer to find a qualified replacement for the position. Significant costs are involved when companies invest in training employees and those employees leave.


About the Author

Tim Grant has been a journalist since 1989 and has worked for several daily newspapers, including the Charleston "Post & Courier," the "Savannah News-Press," the "Spartanburg Herald-Journal," the "St. Petersburg Times" and the "Pittsburgh Post-Gazette." He has covered a variety of subjects and beats, including crime, government, education, religion and business. He graduated from The Citadel with a Bachelor of Science in business administration.

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