When you operate a business, you expect the employees whom you hire to work with you to improve, grow, and make your business more profitable. If you discover that an employee has breached a fiduciary duty in a way that damages your company, you may have legal remedies under Florida law.
You can rely on the business litigation lawyers at Kramer Green to work diligently to protect your business from employees who have breached their fiduciary duties. We will not hesitate to take the legal action necessary to enforce your rights and hold them responsible for their misconduct.
Unfortunately, employees routinely engage in behaviors that violate the fiduciary duties owed to their employers. Here are three common ways employees might breach their fiduciary duties in the business context.
Stealing or misappropriating confidential information
All employees, no matter their roles, owe a fiduciary duty to their employers to act in their best interests. To that end, they should never take advantage of a business opportunity belonging to the employer or steal confidential information for their own use or benefit. They also have a duty of honesty to their employers.
Certainly, employees at the management, supervisor, or higher levels may be more prone to this type of breach of fiduciary duty. Not only do they have greater levels of responsibility within the company, which arguably gives them a greater fiduciary duty, but they also likely have greater access to confidential information. Therefore, they may be more prone or tempted to misappropriate confidential information for their own use.
Employees may breach their fiduciary duty by using confidential company information to benefit themselves financially. For example, they might sell the information to competitors or use confidential customer lists to start their own business ventures. In this manner, employees who have breached their fiduciary duty could not have reasonably worked for the company in good faith or in its best interest.
Soliciting Other Employees or Customers of Their Employer
Another common breach of fiduciary duty by employees may occur when employees solicit other employees or customers of their current employer for their own gain. Certainly, employees can take some steps in reasonable anticipation of starting their own businesses that may ultimately compete with their current employers without running afoul of the duty of loyalty. For instance, they might open a business bank account, rent business space, or set up utility services.
However, when they begin to solicit other current employees or customers of their employer, they likely breach the fiduciary duty owed to prior employer..
Embezzling Employer Funds
Employees who directly handle client or employer funds may also be able to embezzle or steal funds from the employer, typically for their own gain. Embezzlement can occur in various ways but may involve the forgery or modification of records, falsification of invoices, or any other number of recordkeeping techniques designed to cover up the loss of funds. When a business has few checks and balances to prevent theft or leaves financial matters primarily in the hands of a single person, an employer can be particularly susceptible to this type of breach of duty.
An employee who breaches their fiduciary duty in this manner can be subject to both criminal and civil penalties. Civil litigation for breach of fiduciary duty can lead to damages, including restitution or repayment of the embezzled funds to the employer.
We Protect Your Business When Breach of Fiduciary Duty Occurs
The business litigation attorneys of Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. are ready to assist you in protecting your business from the wrongful actions of current or former employees. We know how hard you have worked to build your business and want to help you preserve it.
As a result, our objective is to take any actions necessary to protect your business for the benefit of you and your family. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal issues with our attorneys.