What is Tortious Interference with Contract?

Tortious interference with contract is a legal claim that allows a party to a contract to sue a third-party who knowingly interferes with and causes a breach of a contract.  Under Minnesota law, a plaintiff must prove five elements to succeed on a claim for tortious interference with contract:

  1. The existence of a contract;
  2. The alleged wrongdoer’s knowledge of the contract;
  3. Intentional procurement of its breach;
  4. Without justification; and
  5. Damages.

See Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998).

With respect to employment law, tortious interference with contract claims often arise in the context of non-compete agreements.  If a competitor hires an individual subject to a non-compete agreement and employs him or her in a manner that violates the non-compete agreement, the former employer may be able to sue both the employee (for breach of contract) and the competitor (for tortious interference with contract).

Takeaways:  Tortious interference with contract claims can be important tools for employers who utilize non-compete or non-solicit agreements to prevent unfair competition.  When determining how to enforce a non-compete or non-solicit agreement, determining whether a tortious interference with contract claim is available should be a key consideration.  The potential of a claim for tortious interference with contract should also be considered when hiring an employee subject to a non-compete or non-solicit agreement.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on April 12, 2013, in Non-Competition and Confidentiality, Torts and tagged . Bookmark the permalink. Leave a comment.

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