Breach of fiduciary duty claims frequently arise within the employment context. As a general matter, employees owe their employers basic fiduciary duties in certain circumstances. A potentially fertile area of litigation involves employees who are disloyal to their employers. A recent decision of the Appellate Division, First Department, contains an informative analysis of fiduciary-duty claims involving disloyal employees, including just how far employee fiduciary duties extend.
In Manipal Educ. Americas, LLC v. Taufiq, 203 A.D.3d 662 (1st Dep’t 2022), the court held that the plaintiff-employer stated a breach of fiduciary duty claim against its former marketing director, Zain Taufiq (“Taufiq”). Taufiq allegedly contracted on the employer’s behalf for video-editing services without properly disclosing that the video-editing company—in which Taufiq had an interest—was overcharging the employer and kicking back some of the proceeds to Taufiq as finder’s fees.