What Is Tortious Interference with a Business?

How To Prove Interference in A Business

It can be hard to prove intentional interference in a business. Some of the requirements for tortious interference to be proven include the following:

• There was a legitimate business relationship
• The accused was aware of the business relationship
• The accused purposefully and without good reason interfered with the victim’s commercial relationship with the other party, customer, or company
• The interference caused financial harm to the business

Tortious interference is one of the elements that may be present in a large issue: business sabotage, which is described in detail below.

What Is Business Sabotage?

When an individual has put their time and energy into building a successful business, it can be devastating to discover that someone has tried to undermine it. This situation can be even more disheartening when one’s own partner is the saboteur. Thankfully, the owner of a business has rights, and there are several steps he or she can take to defend themselves and the business. One of these measures is to sue for workplace sabotage.

Business sabotage is when an individual tries to undermine one’s business. Examples of business sabotage include the following:

• Using company opportunities for another business or themselves
• Diverting investor or business funds for their personal use
• Interfering with the business’s business relationships or deals
• Stealing the company’s intellectual property
• Committing crimes that harm the company or its reputation
• Breaking noncompete or nondisclosure agreements

Sabotage is often an intentional act. It is possible that a partner may be trying to harm the company so that he or she can take the business’ assets or open their own company that can compete. Other times, a partner may sabotage a business without the intention of harming it. By placing their personal interests before the company’s, they still manage to do serious damage.

Can a Business Owner File a Lawsuit for Sabotage of His or Her Company?

While filing a lawsuit over workplace sabotage is a serious step to take, it may be necessary if the partner is damaging the business as a whole. The appropriate step to take will depend on the sabotage’s degree of severity. There could be many grounds on which to file a lawsuit.

Contract Breach

Whenever a business owner considers taking their business partner to court, he or she should examine the details of any contracts that exist between them. These contracts may include the following:

• Operating agreement
• Partnership agreement
• Employment agreement
• Noncompete agreements
• Shareholder Agreement, Bylaws, Articles of Incorporation

If a partner’s actions broke the conditions of these agreements, then the contract’s provisions may offer solutions that go beyond legal remedies.

Fiduciary Duty Breach

All business partners owe one another fiduciary duties. This is the promise to place the partnership’s and company’s interests ahead of personal interests. Should a partner attempt to sabotage the business, then he or she has likely broken his or her fiduciary duties.

Tortious Interference

Tortious interference happens when an individual interferes with a business owner’s business contracts or relationships. To prove tortious interference, one must prove that the following is true:

• The person interfering had knowledge of the contract or relationship
• The business owner was likely to gain an advantage from the relationship or contract
• The action was purposeful and inappropriate
• The business partner suffered harm because of the conduct

If a business partner has taken business opportunities for their own benefit, then it is possible that a business owner could win a claim based on tortious interference.

For instance, let us say that a business partner got an individual to violate their agreement with one’s business and to make a deal with the partner’s business instead. This would be tortious interference.

Conversion

Conversion is the civil version of a charge of theft. This allows a business owner to file a lawsuit against an individual who has wrongfully taken money from them. It is possible to file a conversion claim centered on the individual’s inappropriate use of the company’s property, regardless of whether they stole it or not. If a business owner can demonstrate that the partner harmed the company by using the company’s property for personal reasons, then the owner could have a valid conversion case.

Civil Conspiracy

If a partner worked with other individuals in sabotaging the business, then the business owner might also file a lawsuit for criminal conspiracy. A claim based on civil conspiracy would require an owner to show that his or her partner worked with one or more people to perform an unlawful action using unlawful methods.

On its own, civil conspiracy does not constitute a claim. Rather, it needs to be joined with a different claim that proves the owner suffered harm. For instance, if the partner worked with a team of individuals to embezzle the business’ money, then the business owner would have a valid civil conspiracy claim.

What Can a Business Owner Do About a Partner Sabotaging the Business?

The solutions a business owner has to deal with sabotage vary according to the claims he or she brings against their partner. Usually, an owner may receive damages as compensation for losses suffered due to the sabotage. Also, a business owner may seek the following:

• Statutory damages for specific claims like conversion
• An injunction that prevents the individual from pursuing their unlawful activity
• An order that dissolves the partnership
• Attorney fees if available under a statute or contract
• Certain solutions outlined in an agreement with the partner

In addition, if the partner’s conduct was criminal in nature, the business owner should think about providing the police with evidence. The state in which the business operates may wish to charge the individual with a crime if wat they did is deemed serious enough.