Most people are surprised to learn that employees owe fiduciary duties to their employers, even “low-level” ones. This means that they have a duty to act in the best interests of their employer and must avoid conflicts of interest. These duties arise from the common law, and while they vary from state to state, they generally include a duty of loyalty and a duty of care.
The duty of loyalty requires employees to put the interests of their employer ahead of their own. This means they cannot take advantage of their position within the company for personal gain and cannot divulge trade secrets or confidential information. This duty also prohibits employees from competing with their employers or accepting bribes.
The duty of care requires employees to act reasonably prudent when making decisions on behalf of their employer. This duty is based on the concept that employees owe a duty to exercise the same level of care as a reasonably prudent person would under similar circumstances.
While the duty of loyalty and the duty of care are the two most commonly discussed fiduciary duties, there are other less well-known duties that employees may owe to their employer. For example, in some states, employees have a duty to avoid conflicts of interest. This means they cannot take action or have interests that conflict with their employer’s interests. In other words, they cannot put themselves in a position where they would profit from a decision that is not in the best interests of their employer.
Employees also have a duty to disclose material information to their employers. This duty arises out of the duty of loyalty and requires employees to disclose any information that could reasonably be expected to affect the employer’s business decision-making. For example, suppose an employee knows of a potential problem with a product that his employer is about to release. In that case, he has a duty to disclose that information to his employer.
The duties that employees owe to their employers are important ones, and they should not be taken lightly. Violating these duties can lead to civil and criminal penalties. In some cases, employees who violate their fiduciary duties may be required to pay damages to their employer. In other cases, they may be subject to criminal charges, such as embezzlement or fraud. As you can see, it is crucial for employees to be aware of the fiduciary duties that they owe to their employer and to take steps to avoid violating those duties.