Robert Goddard reports on a pair of interesting cases from Scotland:
An employee does not owe the employer fiduciary duties by virtue of being an employee (see, e.g., Nottingham University v Fishel [2000] EWHC 221 (QB), [2000] ICR 1462). However, it has been recognised that the circumstances of the relationship may be such to give rise to a fiduciary relationship. In an opinion given last week - Samsung Semiconductor Europe Ltd. v Docherty [2011] CSOH 32 - Lord Glennie found that such circumstances were present in the case before him.
This strikes me as most curious. Under US law, employees typically will be deemed agents of their employer. Hence, Restatement (Third) of Agency § 7.07 provides that “an employee is an agent whose principal controls or has the right to control the manner and means of the agent's performance of work.” The Restatement elsewhere (§ 1.01) provides that all employees are agents, and that “[a]s agents, all employees owe a duty of loyalty to their employers.” Hence, although “employers do not generally owe fiduciary duties to employees,” “an employee normally owes fiduciary duties to his employer.” Combs v. PricewaterhouseCoopers, 382 F.3d 1196, 1200 n. 2 (10th Cir.2004)."
Having said that, Justice Felix Frankfurter famously observed that "[t]o say that a man is a fiduciary only begins analysis; it gives direction to further inquiry." We would then go on to ask whether the employee had breached his duties by engaging in the specified conduct. Whether that would lead to the same of a different result as the Scottish cases would be highly fact specific.
