San Francisco Employment Law Firm Blog
To prevail on a claim for intentional interference with prospective economic advantage in California, a plaintiff must plead and prove (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) the defendant’s intentional acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff caused by the defendant’s acts. Youst v. Longo
(1987) 43 Cal.3d 64, 71, fn. 6.
Does company “A” have a claim for intentional interference with economic advantage under California law, when company “B” induces Company “A” at-will employee to leave them and switch to work for Company “B”?
In this type of situation, to make a case, Company “A” must prove that Company “B” engaged in an independently wrongful act—i.e., an act that violates a specific law. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159. Where no unlawful methods are used, public policy generally supports a competitor’s right to offer more pay or better terms to another’s employee, so long as the employee is free to leave. And Company B would not be subjected to liability simply because the at-will employee in question move over to work for them.
The intentional interference claim would typically be viable in situation where Company “B” would unlawfully disrupt Company “A”‘s operations by misappropriating their trade secrets or otherwise disrupting their business with an intent to cripple their operations and get their employee to leave, creating discontent among company “A”‘s employees to encourage them to leave their job by spreading false and defamatory rumors, and engage in other unlawful acts to undermine company “A”‘s operations.