A fiduciary duty is an obligation or responsibility to act in the best interests of another party. It exists in virtually every area of business operations where there is a special relationship of trust.
Unfortunately, there are many ways in which one party can breach that trust — often with costly consequences. Our business attorneys in Chicago are here to help you navigate this difficult situation.
Breach of Fiduciary Duty Examples
In a business context, numerous people take on fiduciary duties for a range of beneficiaries. They include employees acting for employers and company executives acting for stockholders.
An employee might breach their fiduciary duty in several ways. Examples include sharing their employer’s trade secrets, acting on behalf of a competitor, failing to exercise care in carrying out their duties, using company equipment for private purposes, or profiting at the expense of their employer. Employers should be able to expect that employees are acting in their best interests.
A partner can breach their fiduciary duty if they mismanage company funds, conceal important information from other partners, fail to disclose conflict of interests, or engage in self-dealing, among other violations.
Meanwhile, a member of a board of directors might be liable for breach of fiduciary duty if they do things such as preventing shareholders from exercising their voting rights, refusing to pay dividends, and competing with the corporation. That is not all. A few more examples include seizing corporate opportunity and wrongfully forcing out minority shareholders.
How Do You Prove Breach of Fiduciary Duty?
Proving breach of fiduciary duty makes it possible to recover damages. To prevail in a claim, you must generally demonstrate the existence of a few critical elements, including the following:
- A fiduciary duty existed
- A breach of fiduciary duty occurred
- The breach of fiduciary duty resulted in damages
- The damages were directly linked to the breach of duty
Contact Our Chicago Business Lawyers for Free
A breach of fiduciary duty can have serious repercussions. It is important to act quickly to minimize its impact. Fortunately, our attorneys have extensive experience with these matters.
Call 312-726-4162 to schedule a free consultation with our lawyers. Markoff Leinberger is located in Chicago, Illinois and provides exceptional representation to clients across the country.