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What is a breach of fiduciary duty?

On Behalf of | Apr 12, 2023 | Business Litigation |

Your business is your lifeblood, and you have worked diligently to compose an inner circle that adheres to the same principles as you do. Discovering that one or more of these trusted confidants has broken your trust may pack a heavier punch for you and your business.

Learn more about what constitutes a breach of fiduciary duty.

What is a fiduciary?

A fiduciary is someone who has a duty or responsibility to act in accordance with what is most beneficial for the company. When this person does not, and it causes you or your company harm, it falls under a breach of fiduciary duty.

What do you need to prove?

There are three elements that you must show an individual or entity broke that rise to a breach of fiduciary duty:

  • Relationship: You must show that you and the individual have a relationship. For instance, if this was an employee of your company, you need to demonstrate that the person worked for you and that the expectation that he or she was to act in accordance with the company’s benefit existed.
  • Breach: You need evidence that the individual broke your trust. You need more than a gut feeling to do this. Evidence in the form of a pattern of behavior or a paper trail should suffice.
  • Harm: The breach of fiduciary duty had to do more than hurt your feelings. You need to show that the individual’s direct or indirect actions caused your company financial harm. For instance, if the breach involved sharing a trade secret, you need proof that the competitor utilizing it took part of your market share.

A breach of fiduciary duty can bring a general mistrust of some of those people you believed only had the company’s interests at heart.


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