Judge Strikes Fiduciary Duty Claims Asserted by FTI Against Former Employees, But Not Aiding and Abetting Claim Asserted by FTI Against Berkeley Research Group

Nutter McClennen & Fish LLP
Contact
 

FTI sued three of its former employees who went to work for Berkeley Research Group (Berkeley), an FTI competitor. The former employees, FTI alleged, breached their FTI employment contracts and their fiduciary duty of loyalty owed to FTI. FTI also sued Berkeley, alleging that Berkeley aided and abetted the former employees’ breach of their fiduciary duties.

The defendants moved to strike the fiduciary-duty claims. Judge Salinger allowed the motion in part, striking the claim for breach of fiduciary duty against the former employees. But Judge Salinger denied the motion to the extent that it aimed to strike the aiding and abetting claim against Berkeley.

In terms of the fiduciary-duty claims, Judge Salinger noted FTI’s allegation that the former employees “breached their fiduciary duties by using FTI’s confidential information and other resources to help Berkeley compete with FTI for clients and solicit FTI’s employees.” Judge Salinger also noted that “no doubt . . . each [former employee] owed a fiduciary duty to FTI while they were employed and working there.” But the claim against the former employees, Judge Salinger ruled, could not survive challenge because it duplicated the breach-of-employment-agreement claim.

This claim is completely duplicative of FTI’s claim that [the former employees] each violated the non-competition, non-solicitation, and confidentiality provisions of their employment agreements while they were employed by FTI. Since the conduct that allegedly constituted breaches of fiduciary duty is entirely addressed by the [former employees’] employment agreements, FTI may sue them for breach of contract but may not also press its redundant claim for breach of fiduciary duty.

Shifting his focus, Judge Salinger refused to strike the aiding-and-abetting claim against Berkeley. Merely because the fiduciary-claims against the former employees “duplicate[] and [are] subsumed within the claims for breach of contract,” Judge Salinger wrote,

that in no way undermines the viability of FTI’s separate claim against Berkeley for allegedly aiding and abetting the [former employees’] breach of fiduciary duty. . . . Though the [former employees’] fiduciary duty of loyalty was subsumed in their contractual obligations, in the circumstances of this lawsuit, Berkeley may still be held liable for aiding and abetting the alleged breaches of fiduciary duty by [the former employees].

You can review the BLS’s decision here.

Suffolk Superior Court

Docket Number: 1684CV03176-BLS2

Case Name: FTI, LLC et al. v. Duffy et al.

Date of Decision: February 14, 2022

Judge: Judge Salinger

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nutter McClennen & Fish LLP | Attorney Advertising

Written by:

Nutter McClennen & Fish LLP
Contact
more
less

Nutter McClennen & Fish LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.