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By: Daniel A. Kaplan, FOLEY & LARDNER LLP
This article provides guidance to employers on bringing counterclaims or separate lawsuits against plaintiff employees who have initiated claims against the employer. Employers and their attorneys are usually well versed in the types of claims that employees can bring. However, the employee might not be the only one with a potential claim after an employment relationship sours—the employer may also have various contract, tort, or statutory claims against its employee.
RECOGNIZING AND PURSUING THESE CLAIMS CAN ENABLE an employer to protect its relationships and confidential information from the departing employee and to obtain financial and equitable redress for employee wrongdoing. At the same time, you must be cognizant of the risks inherent in pursuing an unjustified claim.
Rule 13 of the Federal Rules of Civil Procedure governs counterclaims in federal lawsuits. In a federal employment case, the defendant-employer must generally assert claims arising out of the same transaction or occurrence as the plaintiff-employee’s claims in that lawsuit; the employer cannot bring such claims in a separately filed lawsuit. These types of claims are called compulsory counterclaims. For example, an employer’s claim that a former employee violated his duty of loyalty to the employer may be compulsory in a discrimination lawsuit brought by the employee based on the employee’s termination for those disloyal actions. This is because both the employer’s and employee’s claims would rely on much of the same evidence and derive from overlapping facts.
In contrast, a claim that does not qualify as a compulsory counterclaim is a permissive counterclaim, which an employer may assert either in the employee’s lawsuit or in a separate lawsuit. For example, an employer would likely not have to assert a counterclaim against its former employee for the employee’s post-termination breach of a non-compete agreement in a lawsuit that relates to the employer’s pretermination actions.
To read the full practice note in Lexis Practice Advisor, follow this link.
Daniel A. Kaplan is a partner and litigation attorney with Foley & Lardner LLP. Mr. Kaplan counsels employers in all aspects of the employer-employee relationship, including wage and hour, employment contracts, confidentiality and non-compete agreements, family and medical leave, disability accommodations and compliance with the Americans with Disability Act, and all state, federal, and local discrimination laws. Mr. Kaplan has experience litigating before various state and federal agencies, various state courts, and federal courts throughout the country, including before the U.S. Supreme Court. Assistance provided by Krista J. Sterken, former associate in Foley & Lardner’s Madison, Wisconsin office.
For more information on non-competes, see
> UNDERSTANDING, NEGOTIATING, AND DRAFTING NON-COMPETES
RESEARCH PATH: Labor & Employment > Noncompetes and Trade Secret Protection > Restrictive Covenants > Practice Notes > Non-competes
For guidance in drafting non-solicitation agreements, see
> UNDERSTANDING, NEGOTIATING, AND DRAFTING CUSTOMER AND EMPLOYEE NON-SOLICITATION AGREEMENTS
RESEARCH PATH: Labor & Employment > Noncompetes and Trade Protection > Restrictive Covenants > Practice Notes > Non-solicitation Agreements
For a step-by-step approach to creating non-disclosure agreements, see
> UNDERSTANDING, NEGOTIATING, AND DRAFTING NON-DISCLOSURE AGREEMENTS ON BEHALF OF EMPLOYERS
RESEARCH PATH: Labor & Employment > Noncompetes and Trade Protection > Restrictive Covenants > Practice Notes > Confidentiality/Non-disclosure Agreements
For an outline of state laws regarding restrictive covenants, see
> CHART – STATE PRACTICE NOTES (NONCOMPETES AND TRADE SECRET PROTECTION)
RESEARCH PATH: Labor & Employment > Noncompetes and Trade Protection > Protecting Trade Secrets > Practice Notes > State Non-competes and Trade Secret Protection Practice Notes
For a discussion on the elements of and defenses to retaliation claims, see
> UNDERSTANDING THE ELEMENTS OF RETALIATION CLAIMS
RESEARCH PATH: Labor & Employment > Discrimination and Retaliation > Claims and Investigations > Practice Notes > Protecting the Employer During and After Investigations