Court Holds That A Bank’s Employees Cannot Conspire To Breach Fiduciary Duties And That The Bank Did Not Owe Fiduciary Duties To A Depositor

Winstead PC

In Herring v. Am. Paper & Janitorial Prods., the plaintiff was a subcontractor who provided janitorial services for a bank and was also a depositor of the bank. No. H-17-3474, 2018 U.S. Dist. LEXIS 215765 (S.D. Tex. December 24, 2018). After the plaintiff’s representatives were found stealing food after a party, the plaintiff’s contract was terminated. Later, one of the plaintiff’s employees was hired by another company, who was hired to clean the bank’s premises. The plaintiff sued the bank and the main contracting party for various claims. Specifically, the plaintiff sued the bank for breach of fiduciary duty and conspiracy due to the bank’s employees discussing terminating the plaintiff. The federal district court granted the bank’s summary judgment motion on these claims:

Herring claims that, because multiple Bank employees were involved in terminating the contract with Paper, it was a conspiracy. This, however, is not a conspiracy. No matter how much conversation and coordination may occur among people within one side of a deal or between several sides, it is not a basis for a legal claim. One cannot conspire about one’s own business interests and relationships. Collusion is only illegal if its acknowledged purpose is itself illegal and two people agree. A company cannot conspire with itself. The Bank employees are all members of the Bank, so there could be no conspiracy even if supporting facts existed.

The Bank could not have breached a fiduciary duty to Herring because it owed him none. Herring claims that the Bank owed him a fiduciary duty because Envirotech had a company account at the Bank. This argument too is misguided. In Texas, a depositor-bank relationship is a debtor-creditor relationship, not a fiduciary. While Envirotech had a company account at the Bank, the Bank owed no fiduciary duties on the account. Further, the Bank did not act on the depository account; it took action on its contract with Paper, which happened to involve Envirotech.


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