Employee’s Secret Competition with Employer Breached Duty of Loyalty, New Jersey Court Finds

New Jersey recognizes the right of a worker to prepare to compete with his or her employer even while in the employer’s employ, provided the preparation does not involve taking the employer’s confidential and proprietary information and property. However, New Jersey also recognizes that the worker owes a duty of undivided loyalty to act solely for — and in the best interests of — his or her employer. The worker’s right, therefore, does not curtail his duty to his employer, a New Jersey Appellate Division court has confirmed. Baseline Services, Inc. v. Kutz, 2011 N.J. Super. Unpub. LEXIS 2309 (NJ App. Div. Aug. 25, 2011) (per curiam). Finding against the disloyal employee, the Court ordered him to pay his former employer the lost net profit on the contract it did not obtain because of his conduct.