Employee Disloyalty – When an Employee Breaches Their Fiduciary Duty

Employee Disloyalty – When an Employee Breaches Their Fiduciary Duty

When you hear the words “your fiduciary responsibility to a company,” you might be imagining the inner workings of the corner office or the board room.  Did you know that, if you are employed, you have a fiduciary responsibility to your employer? There is much confusion about the true meaning of term “fiduciary.” Many believe if applies only to financial matters or high-level executives when, in fact, neither assumption is true. Fiduciary simply means trust.

All employees are considered agents of the company that employs them, which means by law they have a fiduciary duty to act with loyalty on behalf of their employer. According to the American Bar Association, “Whenever one party places trust and confidence in a second person with that second person’s knowledge, it is possible that a fiduciary relationship is created.”

Fiduciary responsibilities aren’t limited to large corporations. They apply to businesses of all shapes and sizes. In fact, they don’t just apply to businesses. We’re all fiduciaries in some way, whether to an employer or a family member.

The following are some examples of the most common fiduciary duties employees have to their employers. If an employee has infringed on any of them, they are considered by law to be in breach of their fiduciary duty.


One of the most common causes of litigation as it relates to an employee’s fiduciary responsibility involves what’s known as self-dealing. Self-dealing refers to an employee’s actions benefitting them to the detriment of the employer.


Employees have a duty of loyalty, meaning they cannot put their interests ahead of the company’s.


Whether an employer has a uniform requirement or demands that salespeople present their products in a particular manner, employees have a duty to obey requirements outlined by the employer.

Full Disclosure and Information

An employer can’t be omnipresent, which is one of the reasons they have employees in the first place. So, it’s the duty of the employee to disclose all material and relevant information to the employer.

Reasonable Care and Diligence

An employee has a duty to maintain reasonable care and diligence in pursuit of the employer’s goals.


An employee’s duty of accounting means that they must maintain an accounting of all money and property entrusted to them by the employer.

Duty to Preserve Confidential Information

Employees are privy to information that’s not for public consumption. They have a duty to preserve confidential information, and have breached it if they’ve disclosed confidential information in order to further their own interests.

Duty of Skill and Care

Employers hire workers because they believe their skills will further the interests of the company. An employee’s breach of the duty of skill and care means that they haven’t utilized the skills for which they’ve been hired.

Duty of Good Conduct

While an employer can’t dictate how an employee lives their private life, there can be a breach of good conduct if the employee brings disrepute to the employer by acting with any impropriety.

Laws addressing fiduciaries are complicated, and differ from state to state. The listed examples concerning employee breaches of their fiduciary duty only scratch the surface. That’s why it’s always important to consult an attorney with experience in business and employment law . The attorneys at Bennett Weston LaJone & Turner, P.C. have been helping businesses negotiate the ever-changing legal landscape for years.

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