The Illinois Appellate Court found that a marketing company adequately pleaded a claim for breach of fiduciary duty against one of the former founders of the company who left to work for a competitor. James P. Keane Sr. was one of the founders of Advantage Marketing Group Inc. and owned 35% of the company. When he left his company to purchase and operate a competing business, Advantage sued. The trial court dismissed Advantage’s breach of fiduciary duty claim finding that because Keane was not an officer or director at the time of the alleged conduct, Advantage failed to establish that he owed a fiduciary duty to the company.
The appellate court rejected the argument that only officers or directors of a company owe fiduciary duties to the company. The Court explained that the determination of whether a fiduciary relationship exists must be made based on an examination of the realities of the relationship rather than the employee’s title. Accordingly, the Court examined the nature of Keane’s relationship with Advantage to determine if Advantage adequately alleged that Keane owed fiduciary duties to the company. Continue reading ›