Duty Of Loyalty Paper

734 Words2 Pages

Employees must also be made aware of the duty of loyalty they owe their employers, and how sharing information about their employer through social media might violate this duty. According to Warren and Pedowitz (2011), employees, as agents of their employer, owe their employers a duty of loyalty. Section 387 of the Restatement (Second) of Agency provides that “an agent is subject to a duty to his principal to act solely for the benefit of the principal in all matter connected with his agency” (Restatement (Second) of Agency § 387, 1958); and this principle is frequently apply by the courts – with employers recovering employee gains, rewards, or profits obtained while committing the disloyalty, including paid wages (Warren & Pedowitz, 2011). …show more content…

The duty of loyalty provides that board members act in the best interest of the company during company decision making and activities, as opposed to their own individual interests (Lau & Johnson, 2014c). Therefore, to implement proactive policies concerning board member internet and email use in addition to employee internet use, reassures shareholder confidence. By agreeing to a board member internet use policy, board members are active participants in contributing to policymaking that reflects their fiduciary responsibilities pertaining to their individual internet and email use. However, because the business judgment rule assumes good intent concerning board member business activities and decisions, and member decisions are seldom second guessed by courts (Lau & Johnson, 2014c), board members might invoke this rule if internet policy elements are …show more content…

For instance, in Pacenza v. IBM Corp., a wrongful termination lawsuit, summary judgement was granted in favor of the employer, stating that rightful termination was prompted when the employee violated the employer’s policy that “prohibited the internet use” that the employee engaged in (Burns, 2011, para.4). Not only do sound internet policies thwart frivolous employment lawsuits, they are designed to support employment laws, such as addressing discrimination and harassment. For instance, under the Occupational Safety and Health Act of 1970, employees have a right to a safe work environment, free from the threat of known dangers, such as violence, which includes “harassment, intimidation, or other threatening disruptive behavior” (U.S. Dept. of Labor, 2017, para.2). Employee internet use policies should support employment law

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