By: Alan E. Seneczko, Esq.

It is well-established that corporate officers, directors and policy-makers owe a duty of loyalty to the entity they serve. As a result, they are prohibited from engaging in actions that harm their employer (e.g., setting up or diverting work to a competing business) while still in its employ. But what about lower level employees like salesmen? Do they, or can they owe a similar duty? In InfoCorp LLC v. Hunt, 210 WI.App. 3 (Wis. Ct. App. 2009), the Wisconsin Court of Appeals said "yes."

Hunt worked as a "major accounts manager" for InfoCorp, responsible for selling SMART boards to educational clients in Wisconsin, Illinois and Minnesota. While still employed by InfoCorp, Hunt sought to divert sales to a competitor he would join a month later. InfoCorp sued him for breach of the duty of loyalty, but the trial court dismissed the claim, finding that Hunt did not occupy a position that owed a duty of loyalty to his employer. The court of appeals disagreed, noting that the duty may extend to "key employees" whose job responsibilities are of such a nature, in the context of the employer's business, that they may be used to harm the employer - an analysis that must be performed on a case-by-case basis based upon the employee's responsibilities and the harm that misuse of those responsibilities might cause the employer. According to the appellate court, a jury could find that Hunt occupied such a position.

Questions? Please contact WS Shareholder and Senior Attorney Alan Seneczko at (262) 560-9696, or alseneczko@wesselssherman.com.