Employees owe various duties to their employers, including a general duty of loyalty. This duty requires employees to act primarily for the benefit of their employer in all matters connected with their employment. Failure to do so may constitute a breach of fiduciary duty, or breach of the duty of loyalty. Examples of Employee Fiduciary Duty in Texas An employee...
Continue ReadingOver 70% of all businesses in the United States are sole proprietorships. A sole proprietorship is an unincorporated business that is owned and operated by a single individual. As a sole proprietor, you are entitled to 100% of the profits. However, you are also 100% personally responsible for all debts, losses, and liabilities. Many people choose to protect themselves...
Continue ReadingA recent real estate dispute sheds light on what is required to prove a breach of fiduciary duty claim in Texas. In this case, potential homebuyers contracted to buy a home for $180,000. The seller, the listing agent, the appraisal district, and the real estate agent all indicated that the home’s living area was 2722 square feet. However, the...
Continue ReadingAs an opinion by the El Paso Court of Appeals demonstrates, even apart from a written contract, certain employees owe a fiduciary duty to their employers. In that case, a number of employees worked for home health care agency A, which provided home health care, hospice care and primary care to its patients. During their employment, the employees had...
Continue ReadingAs a recent opinion by the Fifth Circuit indicates, an employment agreement that provides that all work product created by the employee becomes the property of the employer may give rise to a fiduciary relationship between the employee and employer. In that opinion, a company entered into an employment agreement with a chemist. The contract provided that “[a]ny formulae,...
Continue ReadingIt’s long been the law in Texas that an employee can, while still employed, prepare to compete with his employer, as long as he doesn’t actually do so. If he does compete with his employer, he can be found liable for breach of fiduciary duty. In a recent case decided by the federal Fifth Circuit Court of Appeals, the court explained...
Continue ReadingTo get an injunction restraining former employees from competing, an employer needs a valid non-compete agreement or a misappropriation of trade secrets claim, right? Wrong. A breach of fiduciary duty (duty of loyalty) can also warrant injunctive relief. In a case decided several years ago, two employees worked for a company (“the Corporation”) that was involved in the institutional...
Continue ReadingAn employee may be liable for breach of fiduciary duty to his employer—even if his employer suffers no actual damages as a result of the offending conduct. So learned an employee in a recent case. In that case, the employee, a Project Manager for a general construction contractor, was responsible for locating potential subcontractors for the project, soliciting bids...
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