Fiduciary duties are usually imposed on directors, and sometimes
those just below board level. They include legal obligations not to
set oneself up so there is a conflict of interest between the
director and employer, not to profit from one's position at the
employer's expense, and to disclose one's own
wrongdoing.
Mr Ranson was a divisional manager with responsibility for a
team of technicians. Shortly before leaving his job at Customer
Systems (CS) to set up his own company, he canvassed work in
competition and didn't tell CS what he was doing. These two
facts gave rise to a High Court claim based on breach of fiduciary
duty which the company argued was implied into his contract of
employment.
The question was whether fiduciary duties – usually
found in directors' contracts – can apply to
employees. The High Court said that they could and that Mr Ranson
had acted in breach.
The Court of Appeal disagreed. It suggested that the trial
judge's decision had been influenced by an analysis of the law
on directors' fiduciary duties.The correct approach in
determining the duties owed is to look at the employee's
employment contract. Mr Ranson's contract simply required him
to do his job faithfully and with an implied duty of trust and
confidence. That fell short of a fiduciary duty.
So Mr Ranson was not bound to tell his employer what he was
planning. And he was perfectly entitled to start a competing
business after leaving CS.
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Thomas Eggar LLP is not authorised by the Financial
Services Authority. However, we are included on the register
maintained by the Financial Services Authority so that we can carry
on insurance mediation activity which is broadly the advising on,
selling and administering of insurance contracts. This part of our
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Authority. The register can be accessed via the Financial Services
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investment services to clients if those services are incidental to
the professional services we have been engaged to provide as
solicitors.
Thesis Asset Management plc, our associated financial
services company, provides a comprehensive range of investment
services and advice. Thesis is owned by members of Thomas Eggar LLP
but is independent of and separate to it. No lawyer connected with
Thomas Eggar LLP provides services through Thesis as a practicing
lawyer regulated by the Solicitors Regulation Authority. Thesis is
authorised and regulated by the Financial Services Authority.
Thesis has its own framework of investor protection and
professional indemnity cover but Thesis clients do not enjoy the
statutory protection of solicitors' clients.
The contents of this article are intended as guidelines for
clients and other readers. It is not a substitute for considered
advice on specific issues. Consequently, we cannot accept any
responsibility for this information or for any errors or
omissions.
Specific Questions relating to this article should be addressed directly to the author.
The Engineering and Construction Contract (NEC3) and FIDIC Conditions of Contract for EPC/Turnkey Projects (FIDIC Silver) are both popular standard forms of engineering and construction contract.
In October 2012, the Court of Appeal confirmed that a Service Provision Change ("SPC") TUPE transfer can only occur where the client who receives the service, before and after the change, remains the same (Hunter v McCarrick [2012] EWCA Civ 1399).
The ICO has published guidance which highlights the dangers of allowing your employees to use their own devices for work emails and other work related uses.
The Agency Workers Regulations 2011 introduced a requirement for employers to provide employee representatives with information on agency workers during TUPE and collective redundancy consultations.
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