NJ Supreme Court Holds Employers May Seek Disgorgement of Disloyal Employee’s Pay Without Proof of Loss

In Kaye v. Rosefielde, the New Jersey Supreme Court held that disgorgement of a disloyal employee’s salary can be an appropriate remedy for breach of loyalty claims even in the absence of proof of actual economic loss. In an unanimous decision, the Court noted the trial court’s broad discretion to fashion equitable remedies, including disgorgement of an employee’s salary, and instructed lower courts that the amount of the disgorgement should be limited to the compensation that the employee received during the employee’s period(s) of disloyalty.