Employment Key Employees & Breach of Fiduciary Duties
Most businesses rely upon several key people to be successful. Those key employees are typically long-term managers or executives who have gained intimate knowledge of the business and its customers over their years of service.
Our laws impose “fiduciary duties” on some key employees not to take unfair advantage of their employer’s vulnerability when they leave their employment. In these situations, the employer is vulnerable to the key employee if he or she should decide to leave without notice and take confidential customer information to a competitor. In some cases, a key employee may also attempt to convince other employees to leave with them to go and work for a competitor. This can have devastating consequences to the employer’s business resulting in a loss of profit or the collapse of the business.
Employers faced with a departing key employee that has taken important customer information or staff may be able to obtain an injunction, immediately preventing the employee from proceeding with their wrongful conduct until a final determination is made in court, or compensation for lost profits. In serious cases, an employee that has been found to have breached fiduciary duties could face awards of punitive damages.
Our lawyers can provide advice and assistance regarding your obligations as a key employee or as an employer faced with these difficult situations.