Duty of Loyalty: What It Actually Requires, What It Cannot Demand, and How to Respond When It Is Used Against You

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“Disloyal” is the word managers use when “illegal” does not fit. It sounds serious and lacks definition, making it useful. This guide gives you back the definition: what the duty consists of, where practice has drawn the line, and how to compel the employer to point to which obligation you have breached, instead of the word.

What the duty of loyalty contains

The Arbetsdomstolen has described the employee's duty of loyalty as “not harming the employer” and refraining from actions intended to cause harm (including AD 1994 no. 79, AD 1993 no. 18). In practice, it consists of five parts with varying significance:

• Confidentiality regarding trade secrets – regulated by law, see below.
• Prohibition against competing activities during employment – starting your own business or working for a competitor in a way that takes customers, assignments, or knowledge from the employer.
• Prohibition against damaging the employer's reputation through grossly false, offensive, or inciting statements – not through criticism.
• Duty to inform – you must inform the employer when something seriously threatens the business, such as a colleague stealing or a machine being dangerous. This part is often forgotten, but it is also what makes internal reporting the loyal alternative.
• Conduct in a position of trust – the higher the position, the more is required. A CEO cannot do what a warehouse worker can.

The duty applies within the employment and to such activities in your free time that directly impact the employer. What you do otherwise in your free time is not the employer's concern.

Trade Secrets – the Law, Not the Manager's Feeling

During employment, you are liable for damages if you intentionally or negligently disclose or exploit a trade secret you have accessed at work (Section 7). After employment, liability for damages only applies if there are exceptional reasons – typically if you took documents with the intent to use them (Section 7, second paragraph). Criminal liability (industrial espionage, unlawful handling) requires that you have unlawfully accessed or taken documents; remembering is not a crime. Your core knowledge follows you.

Side Jobs, Secondary Employment, and Competition

Competition is the sharp boundary. Registering a company in the same industry during employment, contacting the employer's customers on your own behalf, or preparing a transition by copying material has repeatedly been seen by the Labour Court as grounds for dismissal. To plan to start your own business after employment, apply for a job with a competitor, or take employment there after the notice period is allowed – unless there is a valid non-compete clause.

For public employees, there are also secondary employment rules in the Public Employment Act (detrimental secondary employment, Section 7) and in collective agreements (hindering and competing secondary employment). Read public employee.

The Right to Criticize is Part of the Picture

The Labour Court has established that employees have a broad right to criticize the employer and question its decisions (AD 1982 No. 110, AD 1994 No. 79). Criticism – even harsh, even public – becomes disloyal only when it is grossly untrue, presented in a way intended to harm without a factual purpose, or when you simultaneously call for a boycott of the employer. The court has considered whether you first tried internally when the criticism concerns internal matters, but that requirement is waived when it involves crime, danger, or serious misconduct of public interest – where the whistleblower law directly protects external reporting (Chapter 4, Section 7 of the law 2021:890).

Union criticism has special protection. What you say at a union meeting, in negotiations, or as a union representative cannot be treated as disloyalty to the employer; it is the right of association (Sections 7–8 MBL) and the Förtroendemannalagen that apply.

What the duty of loyalty cannot require

• Silence about crimes and misconduct. The Whistleblower Act provides protection against reprisals when reporting internally, to an authority, and in certain cases publicly (Chapter 3). Agreements that restrict protection are invalid (Chapter 1, Section 4).
• That you refrain from reporting to an authority – Arbetsmiljöverket, DO, IMY, IVO, Skatteverket, the police. A report made in good faith is never disloyal.
• That you do not contact the union or inform the union about what is happening. Protected by the right of association and explicitly by Chapter 3, Section 2 of the Whistleblower Act (consultation with the employee organization).
• That you do not use the whistleblower protection if you are publicly employed or work in publicly funded healthcare, education, or care.
• That you do not testify truthfully in court or before an authority.
• That you agree with the employer's values, policies, or business strategy. Loyalty is action, not opinion.

After employment: the clauses

When employment ends, the duty of loyalty ends. What continues is:

• The Trade Secrets Act – damages only in exceptional circumstances, see above.
• Non-compete clause – only if it is in your contract and is reasonable (Section 38 of the Contracts Act). According to the collective agreement that Svenskt Näringsliv and PTK concluded in 2015, which the Labour Court uses as a benchmark even outside the agreement area, the clause should only be used when there are trade secrets to protect, apply for a maximum of 9 months (18 in special circumstances), and provide compensation of at least 60 percent of the salary during the binding period. A clause without compensation, for a regular employment or for several years, is generally unreasonable and can be adjusted or disregarded.
• Non-solicitation clause (not recruiting colleagues or contacting customers) – also assessed according to Section 38 of the Contracts Act and should be limited in time.
• Confidentiality clause – can apply longer than the employment for what is actually secret, never for your professional knowledge.

Before taking a new job in the same industry: read the clauses, calculate the time, and request in writing that the employer waives the clause if it is questionable. Many employers prefer to waive rather than pay 60 percent of the salary for nine months.

When the word is used against you

To: [manager], cc: [HR], [union representative]
Subject: Alleged disloyalty – request for clarification

During the meeting on [date], you stated that I acted disloyally.

To address the allegation, I request written clarification of
1. which specific action or statement is referred to (date, context, wording),
2. which obligation in the employment contract, collective agreement, or law the action is alleged to violate,
3. what damage to the business has occurred or is feared,
4. if the allegation concerns another employment: how it is obstructive or competitive according to Section 6 of LAS.

I wish to clarify that [e.g., my reporting to … on … was supported by the law on protection for persons reporting misconduct / my contact with the union is protected by the right of association].

[Name, date]

Sources

• The Trade Secrets Act (2018:558) – Sections 2, 4, and 7
• LAS Section 6 i – right to other employment
• The Whistleblower Act (2021:890) Chapter 1, Section 4; Chapter 3, Section 2; Chapter 4, Section 7
• Contracts Act Section 38 – non-compete clauses
• Co-Determination Act Sections 7–8 – association rights
• Public Employment Act Section 7 – trust-damaging secondary employment
• Labour Court – AD 1982 No. 110, AD 1994 No. 79 et al.

The guide is general information about applicable rules, not advice on your case. Collective agreements may deviate from the law on several points. Legal status checked on September 25, 2026.

For those reading under stress

The guide is intended as support when you already have a lot on your mind. You do not need to read everything at once: start with the section that matches where you are today and return when the next step becomes relevant.

Cases with authorities rarely improve if you carry everything alone. Ask for help from a support person, lawyer, or relative if you can – especially before decisions with long-term effects.

Common mistakes that make the case more difficult

• Relying only on verbal promises without short written confirmation or follow-up email.
• Waiting to request documents until the conflict is already locked – then it becomes harder to show what was said.
• Writing so long and emotionally that the authority stops responding to the substantive issue.
• Missing deadlines for reconsideration or appeal because the decision was not read verbatim.

Mini-checklist before you leave the guide

1. Do I have the date, diary/case number, and name of the person handling it (if you know)?
2. Do I know what the next step is: respond, request, remind, appeal, or report?
3. Have I saved emails and attachments in a place where I can find them in a week?