Employee Duty of Loyalty

Employees in Washington owe their employers a duty of loyalty and can be held liable for breaching this duty of loyalty.  Below is quote from case that explains and describes this employee duty of loyalty.   I left the case citations in the quote for my lawyer and law student readers.  

Our courts have acknowledged the duties involved in employee-employer and principal-agent relationships. See Smith v. Olympic Bank, 103 Wn.2d 418, 423, 693 P.2d 92 (1985) ("In Von Gohren [v. Pacific Nat'l Bank, 8 Wn. App. 245, 505 P.2d 467 (1973)], it was held that a bank had notice that an employee was breaching her fiduciary duty when it allowed her to deposit third party checks payable to her employer in her personal account."); Moon v. Phipps, 67 Wn.2d 948, 954-55, 411 P.2d 157 (1966) (The "loyalty demanded of an agent . . . creates a duty in the agent to deal with his principal's property solely for his principal's benefit in all matters connected with the agency."); Organon, Inc. v. Hepler, 23 Wn. App. 432, 436, 595 P.2d 1314 (1979) ("[T]he method used by the defendant in pursuing his work for Phone-a-Gram amounts to a breach of his implied duty of loyalty to his principal."); Appleway Leasing, Inc. v. Tomlinson Dairy Farms, Inc., 22 Wn. App. 781, 783, 591 P.2d 1220 (1979) ("[A]n agent breaches his fiduciary duty to his principal if he sells to a third party at too low a price something which he is otherwise authorized to sell.").

See C-E-I-R, Inc. v. Computer Dynamics Corp., 229 Md. 357, 366, 183 A.2d 374, 379 (1962) (prior to termination, employee may not solicit employer's customers for a rival business); Jet Courier Servs., Inc. v. Mulei, 771 P.2d 486, 496 (Colo. 1989) (agency relationship imposes a duty of loyalty and noncompetition upon the agent).  

​Kieburtz & Assocs. v. Rehn, 68 Wash. App. 260, 266 n.2, 842 P.2d 985, 988 (1992)

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