Fiduciary Duty Ruling Highlights Importance of Non-compete Agreements

May 22, 2012 at 2:13 pm Leave a comment

The Missouri Supreme Court recently held that a divisional vice president and manager in charge of Western Blue Print Co., L.L.C.’s Columbia, Mo., office was not bound by the fiduciary duties that an officer or an employee in a “confidential relationship” would have had towards the company.

Summary: In Western Blue Print Co., L.L.C. v. Roberts, No. SC91831 (Mo. April 17, 2012), the Court reviewed a jury’s $600,000 verdict in favor of Western Blue against the defendant, Myrna Roberts, on claims for breach of fiduciary duty, tortious interference and violations of the Missouri Computer Tampering Act. The Missouri Court of Appeals, Western District, had affirmed the award.

The Supreme Court reversed in part, finding that Roberts did not owe officer-like fiduciary duties to the company, notwithstanding the significant authority and control she had over the Columbia office. The Court also rejected Western Blue’s argument that the defendant’s access to confidential information such as profit and loss data created a “confidential relationship” sufficient to support a fiduciary duty claim. The Court noted that Roberts “was not restricted by a non-compete agreement, and was not asked to maintain the alleged confidential nature of the information she obtained through her work at Western Blue.”

Why this matters: The case’s holding that the defendant did not owe a fiduciary duty to the company highlights the importance of Missouri employers obtaining confidentiality and non-compete agreements from key at-will employees in order to prevent those employees from profiting unfairly at the expense of the employer upon their departure. The best way to protect your company from information theft and unfair competition is through the use of appropriately tailored confidentiality and non-compete agreements.

Access the full PDF version of the Business Litigation Alert: Fiduciary Duty Ruling Highlights the Importance of Non-Compete Agreements

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