News & Analysis as of

Employment Contract Breach of Duty

Butler Snow LLP

Recent Case Breathes New Life into Old Law in South Carolina

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Introduction: Employers have long used independent contractors to efficiently and effectively perform work and provide services while at the same time insulating themselves from direct liability for the contractors’ conduct....more

Ius Laboris

Hong Kong: Think twice before filing an employment claim directly to the High Court

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Under Hong Kong’s court rules, the Labour Tribunal has exclusive jurisdiction over claims for money damages arising from an employment contract or the Employment Ordinance. A recent decision highlights the pitfalls in...more

Fox Rothschild LLP

When Employees Become Competitors, NC Business Court Keeps a Careful Watch on Disturbances in Marketplace Force

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Joshua Langley worked for Autocraft, Inc. for more than five years and rose to have wide access to its business affairs and “substantial responsibility for its overall operations.” While still employed there, he opened LB...more

Farrell Fritz, P.C.

At-Will Employment Agreement Plus Mandatory Redemption Clause Leaves Minority Shareholder-Employees Out in the Cold

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MiniCorp has five shareholders, all of whom are employees.  Each shareholder’s employment agreement states that they are an at-will employee of MiniCorp, and the shareholders agreement provides that when a shareholder’s...more

ArentFox Schiff

Fourth Circuit: Employers Can Enforce Fiduciary Duty Claims Against Employees Competing For New Contract

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In a case involving government contracts, the Fourth Circuit held that a company could proceed with its claims against three former employees for actions they took as employees – through their newly formed company - to pursue...more

PilieroMazza PLLC

Disloyal Employees: Disgorgement Offers Employers Some Reprieve

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In many states, employees owe a duty of loyalty to their employer as long as they remain on the employer’s payroll. In other words, employees must generally act in the best interests of their employer—and not solely for their...more

Proskauer - Employee Benefits & Executive...

Sixth Circuit Rejects Arbitration for Proposed Fiduciary Breach Class Action

The Sixth Circuit, in a matter of first impression for that Circuit, held an arbitration clause contained in an individual employment agreement did not apply to ERISA fiduciary breach claims brought on behalf of a defined...more

Miller Canfield

Arbitration of Fiduciary Breach Claim Cannot Be Compelled by Relying on Individual Employment Agreements

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In Hawkins, et al. v. Cintas Corp., No. 21-3156, __ F.4d __ (2022), plaintiffs brought a class action pursuant to Section 502(a)(2) of the Employee Retirement Income Security Act (ERISA), alleging that their former employer...more

A&O Shearman

Where an Employee Makes Secret Profits: Extending the Net of Persons Liable

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In Sumifru Singapore Pte Ltd v Felix Santos Ishizuka (2022), the Singapore High Court found that where an employee is placed in a position of trust they will owe fiduciary duties to their employer (similar to the duties owed...more

BCLP

Implied duty of mutual trust and confidence and employers’ right to terminate

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In Hong Kong, an implied duty of mutual trust and confidence (“Duty”) exists between an employer and an employee. This duty requires that an employer shall not “without reasonable and proper cause, conduct itself in a manner...more

Farrell Fritz, P.C.

Disguised Agreements and Dissolution

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Appearances can be deceiving. - That, essentially, was the argument made in two recently decided cases involving claims for judicial dissolution. ...more

Littler

Are ERISA Breach of Fiduciary Duty Claims Arbitrable?

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Over the years, attempts to arbitrate breach of fiduciary duty claims under the Employee Retirement Income Security Act (ERISA) Section 502(a)(2) have had varying results.  One court recently recognized that “whether any...more

Littler

Ontario, Canada Court Reminds Employers that Improperly Drafted Restrictive Covenants are Unenforceable

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In Labrador Recycling Inc. v. Folino, 2021 ONSC 2195 (Labrador Recycling), Ontario’s Superior Court denied an employer’s motion for an urgent injunction to restrain its former employee from competing with it contrary to the...more

Holland & Knight LLP

Courts Split on Class Action Waivers, Arbitration Provisions in ERISA Litigation

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Courts have struggled through the years when considering the enforceability of mandatory class action waivers and arbitration provisions contained within Employee Retirement Income Security Act of 1974 (ERISA) plans and other...more

Morgan Lewis - ML Benefits

401(k) Fiduciary Breach Claims Not Subject to Arbitration, Second Circuit Decides

Reversing a lower court’s decision, the US Court of Appeals for the Second Circuit issued an opinion in Cooper v. DST Systems, Inc., et al., finding that an arbitration agreement signed by an employee as part of his...more

Proskauer - Employee Benefits & Executive...

Second Circuit Rules ERISA Fiduciary-Breach Claims Are Outside the Scope of General Employment Arbitration Agreement

In response to the deluge of ERISA class action breach of fiduciary duty claims, plan sponsors and fiduciaries have increasingly sought to compel individual arbitration of such claims pursuant to arbitration clauses in...more

Littler

Supreme Court of Canada Clarifies Duty to Exercise Contractual Discretion in Good Faith

Littler on

In 2020, the Supreme Court of Canada (SCC) heard arguments in Wastech Services Ltd. v. Greater Toronto Sewage and Drainage District, 2021 SCC 7 (Wastech) and C.M. Callow Inc. v. Zollinger, 2020 SCC 45 (Callow), both of which...more

Vinson & Elkins LLP

When The Smooth CEO Exit Gets Bumpy

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Recent press reports have highlighted the difficulties faced by companies that discover evidence of misconduct only after an executive has exited and received severance. When it comes time to exit a CEO or other senior...more

Gray Reed

Where Am I and How Did I Get Here (In This Venue)?

Gray Reed on

In June 2019, David Dunwoody (“Dunwoody”) left his position as President of EnVen Energy Corporation (“EnVen”) amidst a scandal centering around his alleged involvement in a kickback scheme.  Dunwoody sued EnVen, the oil...more

FordHarrison

Non-Compete News: Georgia Court Holds Contractor Owes Fiduciary Duty/Duty of Loyalty

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In late 2019, the Northern District of Georgia (Atlanta federal court) addressed the duties owed when an independent contractor leaves one trucking company to work for another. In Wind Logistics Prof’l v. Universal Truckload,...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Applies Noerr-Pennington Doctrine to Dismiss Claim for Unlawful Retaliation

In Pozner v. Fox Broadcasting Co., Justice Saliann Scarpulla of the Commercial Division dismissed plaintiff Cliff Pozner’s (“Pozner”) retaliation claim, which alleged that counterclaims filed against him by defendant Fox...more

Farrell Fritz, P.C.

Advance! Amend! Retreat!

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The title of this post describes not an army maneuver, but the outcome of a recent lawsuit in Delaware Chancery Court for advancement of litigation expenses in which...more

Winstead PC

Texas Court Compels A Limited Partner’s Employment And Defamation Claims To Arbitration Due To The Partnership Agreement’s...

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In Gray vs. Ward, Ward and Gray started a limited partnership where Ward was a limited partner and Gray was a limited partner and the manager of the general partner. No. 05-18-00266-CV, 2019 Tex. App. LEXIS 6992 (Tex....more

Littler

Striking Down Decades-Old Precedent, Ninth Circuit Rules That ERISA Breach of Fiduciary Duty Claims May Be Arbitrated

Littler on

On August 20, 2019, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit issued an opinion in Dorman v. Charles Schwab Corp., overturning its 1984 position in Amaro v. Continental Can Co. that lawsuits filed...more

Holland & Knight LLP

Pennsylvania’s “Gist of the Action” Doctrine Does Not Preclude Trade Secret Claims

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Pittsburgh Logistics (PL) sued its competitor and former employee, alleging that the employee breached his employment agreement by working for the competitor and that he would inevitably disclose PL's confidential and trade...more

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