Two years is typical for these clauses and employers should be aware that a court may not uphold the clause if the duration is longer.

Non-Competition clauses prevent an employee from working for a competitor for a certain amount of time after their employment has been terminated.

NON-COMPETITION AND NON-SOLICITATIONĮmployers can protect themselves by including non-compete and non-solicitation clauses in their employment contracts. an employer, client, etc.) and they must be honest and open with their beneficiary about any circumstances that may do harm.Įxamples of breaches can include stealing clients away from an employer, misappropriating funds, or working with or for the competition. In short, these three categories mean, respectively, that a fiduciary must act in a reasonable and prudent way, they must act in the best interests of their beneficiary (i.e. WHAT CONSTITUTES A BREACH OF FIDUCIARY DUTY?Ī breach can occur under three categories: care, loyalty and candor. The employee of a fiduciary must also be aware they are accepting this trust and that special reliance is being put upon them.How much trust and reliance the employer put in the employee also impacts the extent of the fiduciary duty.How much power/authority the employee had is also a major factor in determining if a fiduciary duty exists.An employee’s position in the company (the higher up an employee, the more likely they are to be responsible for how they represent the company).Breaches of this duty can result in a variety of consequences, so it is important to establish if the duty exists.Įstablishing whether fiduciary duty exists, depends on these factors:

DETERMINING IF A FIDUCIARY DUTY EXISTS AND HAS BEEN BREACHEDĭoes your employee have a fiduciary duty to your company and are they potentially in breach of that duty? While all employees have some responsibility to be loyal to their companies, certain employees have a more strict and legal responsibility to act in the best interest of the company. Devry Smith Frank LLP (DSF) understands the complexity surrounding these matters and can help you achieve the best outcomes while also working to keep sensitive matters private to minimize reputational harm. Disputes over breach of fiduciary duty and non-compete contracts are often tense and upsetting for both parties involved.

Breach of fiduciary duty