A foreign company has purchased the business where I have worked for 30+ years. The new owners seem to have problems paying vendors and we are unable to deliver our product. Obviously, customers are furious and those of us on the front lines are taking a lot of abuse. Several people have left due to the stress and were immediately sued by the new owners of the company. None of us have any type of employment agreement or contract with either the new or previous companies. Do they have a case?
Contracts / Agreements Lawyer
Connecticut is an at-will state meaning that absent an agreement otherwise either the employer or employee may terminate their relationship at any time, with or without cause (i.e. for a good reason (absenteeism, insubordination, theft, etc.) or no reason at all).
Anytime adverse employment action (i.e. terminate employment, change working conditions, etc.) is taken against an employee it’s advisable to consult with a local attorney about what specific rights or actions maybe taken. While foreign buyers typically retain local counsel to advise on Connecticut law, it is not unheard of for such foreign employers to not have local advise and end up taking unlawful action against its employees. In such case the employer is left exposed to valid claims by their current and former employees. Some of the more common claims include discrimination (i.e. age, national origin, race, etc.) and wage and hour claims (i.e. overtime, failure to pay accrued unused vacation, etc.)
As far as former employees getting sued something more must be at play. Generally, the greatest risk for claims an at-will employee faces is if the employee takes (steals) or communicates proprietary confidential information owned by the employer. In cases where the employer can prove a departing employee downloaded (to a zip drive or other storage device) employer customer lists or other valuable competitive information (i.e. manuals, price lists, product specs, etc.) the former employer may bring a civil injunction action against the former employee (and often his/her new employer) to prevent such use and to seek money damages.
Generally, employers are not able to restrict a former employee’s general knowledge, skills and experience. However, in situations where employees have a written non-compete agreement there are many fact determinative reasons why an employer could legitimately restrict a former employee from competing against it bring a suit against that former employee. A court will look at the reasonableness of the restrictive covenants in the non-compete as well as other factors to determine if it is enforceable.
If you have concerns over your job security, working conditions or that you’ve been unlawfully targeted by the new owners you should seek legal advice. Good luck.
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Disclaimer: The foregoing answer does not constitute legal advice, is provided for informational and educational purposes only for persons interested in the subject matter. Each situation is fact specific and may be subject to state specific laws. Without a comprehensive consultation and review of all the facts and documents at issue it is impossible to evaluate a legal problem fully. This answer does not create an attorney-client relationship.
The most common type of employment agreement is at-will meaning that either party can terminate the relationship with or without cause. There are of course caveats to that such as limitations on dismissal for discrimination, etc. But as long as both parties are acting in good faith, you are not directing clients away from the business while still an employee, or stealing company files, then an at-will employment should not result in legal repercussions.
Things to check into is whether a non-compete clause was signed by these former employees or, more generally, what the claims are that the employer is asserting. As you identified, employment agreements can be on a contractual basis. In those instances, the contract usually states the term of the contract and ways to terminate the relationship.
You should speak to an employment attorney in your area for advise specific to your situation. Good luck.
THIS RESPONSE IS INTENDED TO CONVEY GENERAL INFORMATION ONLY. IT SHOULD NOT BE RELIED UPON OR TAKEN AS LEGAL ADVICE. FURTHER, THIS RESPONSE IS NOT INTENDED TO AND DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP.
Landlord / Tenant Lawyer
Attorney Ladouceur's answer is thorough, well-reasoned and needs no further elaboration. In short, "I agree."
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