Soma Ray, a lawyer at Donahue Ernst & Young, provides answers to some real-life situations involving fiduciaries and their duty to their employers.
Who is a fiduciary?
•Fiduciary duty exists whenever one person trusts and relies upon another.
•Fiduciary duty exists where there is special confidence placed upon someone and that person is in good conscience bound to act in good faith.
•Examples of fiduciary relations are those existing between attorney and client, guardian and ward, principal and agent, executor and heir, landlord and tenant.
What are some examples of breach of fiduciary duty?
For executives, not acting in the best interest of the corporation could be considered a breach of a fiduciary duty (in other words, taking actions in your own financial best interest incongruous with corporate objectives).
Does it make a difference if the behaviour occurs on non-company time?
Many of today’s jobs are not jobs, but careers and there are really no set hours of operation. If you’re breaching your duty, the time of it would be inconsequential.
What is proprietary information?
Considering this is a knowledge economy are there any work-related subjects employees can talk to competitors about?
Any information the company has gathered in confidence or has expended time, money and effort to gather, and would not be readily available to the public or easily obtained from another source, can be considered confidential.
Can an employee conduct a job search using company time, for example, attending a career fair?
Yes, employees can attend a career fair but it’s a slippery slope when you start employing company resources and company time into your job search.
What should I put in my employment contract?
If you want an employee to work exclusively for you, spell it out. Also, contracts should identify that an employee is a fiduciary and clearly articulate the non-competition and solicitation expectations of that employee’s position.
Who is a fiduciary?
•Fiduciary duty exists whenever one person trusts and relies upon another.
•Fiduciary duty exists where there is special confidence placed upon someone and that person is in good conscience bound to act in good faith.
•Examples of fiduciary relations are those existing between attorney and client, guardian and ward, principal and agent, executor and heir, landlord and tenant.
What are some examples of breach of fiduciary duty?
For executives, not acting in the best interest of the corporation could be considered a breach of a fiduciary duty (in other words, taking actions in your own financial best interest incongruous with corporate objectives).
Does it make a difference if the behaviour occurs on non-company time?
Many of today’s jobs are not jobs, but careers and there are really no set hours of operation. If you’re breaching your duty, the time of it would be inconsequential.
What is proprietary information?
Considering this is a knowledge economy are there any work-related subjects employees can talk to competitors about?
Any information the company has gathered in confidence or has expended time, money and effort to gather, and would not be readily available to the public or easily obtained from another source, can be considered confidential.
Can an employee conduct a job search using company time, for example, attending a career fair?
Yes, employees can attend a career fair but it’s a slippery slope when you start employing company resources and company time into your job search.
What should I put in my employment contract?
If you want an employee to work exclusively for you, spell it out. Also, contracts should identify that an employee is a fiduciary and clearly articulate the non-competition and solicitation expectations of that employee’s position.
