Trusted Counsel For Business Torts Cases
Pennsylvania and federal law provide that in certain circumstances claims may be asserted for “business torts,” i.e., claims to recover for economic injuries to businesses. Examples of business torts include:
Common law fraud: Claims for fraud may be based on misrepresentations or nondisclosure. Under Pennsylvania law, the elements of a claim for common law fraud must include false representation intended to mislead a second party and cause them harm.
Tortious interference with contractual and prospective contractual relations: If an individual intentionally interferes with a contract between two other parties, preventing it from being performed, they are responsible for any monetary loss from the failed contract.
Misappropriation and conversion of trade secrets and other business assets: Claims relating to the misappropriation of trade secrets are generally brought under the Pennsylvania Uniform Trade Secrets Act (PUTSA). Please see the discussion of PUTSA, as well as the federal Defend Trade Secrets Act, in our Trade Secrets and Restrictive Covenants Litigation page.
Breach of fiduciary duties, Including the duty of loyalty: Fiduciary relationships may be formed under various circumstances. When a party has a fiduciary relationship with a business and harms them through wrongdoing, a claim for breach of fiduciary duties may lie on behalf of the business. Pennsylvania courts have recognized that employees of businesses owe fiduciary duties to their employers, including a duty of loyalty. Under certain circumstances, the duty of loyalty owed by an employee can survive termination of the employment relationship.
Aiding and abetting a breach of fiduciary duty: Pennsylvania law recognizes a cause of action for aiding and abetting a breach of fiduciary duty. One can be liable for aiding and abetting harm caused to a third person when he or she:
- Completes a tortious action with another party for a common goal
- Encourages another party’s actions, fully aware that their actions are a breach of duty to a third group
- Assists another individual in a tortuous act, and their actions are a breach of duty to a third party
Wrongful procurement and conversion of business information: This claim may be asserted alternatively to a claim under PUTSA for misappropriation of trade secrets, and may apply, despite PUTSA preemption, when the misappropriated information does not rise to the level of a trade secret.
Professional negligence: Many claims for negligence in the commercial litigation context will be barred by the gist of the action doctrine or the economic loss doctrine. However, certain claims, including professional negligence claims, may be pursued under certain circumstances despite these doctrines.
Trade disparagement and defamation: In certain circumstances, businesses may assert claims for trade disparagement and defamation. You may not use any terms in advertising that could mislead viewers as to the nature, origin or substance of your product or services, or the services of another company.
Unjust enrichment: Claims may be asserted to recover damages from a defendant who has been unjustly enriched, to the detriment of the plaintiff.
Unfair competition: Several specific categories of commercial behavior can give rise to unfair competition claims, including:
- Deceptive marketing
- Infringement of trademark and other protectable intellectual property rights
- Misappropriation of trade secrets and other intangible trade values
- Acts or practices that are actionable under federal or state statutes
- Other acts that are determined unfair to the affected party or public
The Pennsylvania Supreme Court has not expressly adopted the Restatement’s definition of unfair competition, but other Pennsylvania courts have recognized causes of action for unfair competition based the Restatement categories, and the Eastern District of Pennsylvania has cited the Restatement’s “catch-all” provision as a basis for a cause of action for common law unfair competition.
Civil conspiracy: This is a cause of action frequently asserted in commercial litigation matters. To state a cause of action for civil conspiracy, the plaintiff must demonstrate:
- Multiple persons working together to commit an unlawful act
- Acting together towards a common goal
- A result of substantial legal damage