Post-Investment Review Duties.
Post-Employment Fiduciary Duties
1. Meaning of Post-Employment Fiduciary Duties
Post-employment fiduciary duties refer to the continuing obligations of an employee (or former fiduciary) after termination of employment, requiring them to:
- Act in good faith
- Not misuse confidential information
- Not exploit opportunities belonging to the former employer
- Not engage in dishonest competition using insider knowledge
In simple terms:
👉 Even after leaving a job, a person cannot:
- Steal clients or secrets from their old employer
- Misuse confidential data
- Exploit business opportunities discovered during employment
2. Who owes fiduciary duties?
Typically:
- Directors and senior managers
- Employees with access to confidential/business-sensitive information
- Agents and partners
- Trustees and advisors
3. Nature of Post-Employment Fiduciary Duties
(A) Duty of confidentiality
- Trade secrets, pricing, client lists
(B) Duty not to exploit corporate opportunity
- Cannot take business opportunities belonging to former employer
(C) Duty of loyalty (limited post-employment)
- No active sabotage or misuse of insider position
(D) Duty to avoid conflict of interest (limited continuation)
- Cannot misuse prior position for unfair advantage
4. Key Legal Principle
👉 Fiduciary duties are strongest during employment, but some obligations survive termination, especially:
- Confidentiality
- Protection of trade secrets
- Prevention of unfair competition using insider knowledge
5. Important Case Laws on Post-Employment Fiduciary Duties
Case 1: Bristol & West Building Society v. Mothew (1998)
Court: UK Court of Appeal
Facts:
- Allegation of breach of fiduciary duty by financial advisor
Held:
- Fiduciary duty requires loyalty and avoidance of conflict of interest
- Not all breaches are fiduciary in nature
Principle:
⚖️ Fiduciary duty is a duty of loyalty; post-employment misuse of trust is actionable
Case 2: Faccenda Chicken Ltd. v. Fowler (1986)
Court: English Court of Appeal
Facts:
- Former employee used knowledge of customers after leaving job
Held:
- Distinction between:
- Confidential information (protected after employment)
- General skill and knowledge (not protected)
Principle:
⚖️ Only true confidential information is protected post-employment
Case 3: Prince Jefri Bolkiah v. KPMG (1999)
Court: House of Lords (UK)
Facts:
- Accounting firm had confidential financial data of client
- Later acted against client’s interests
Held:
- Strict duty to protect confidential information continues after engagement
- Injunction granted to prevent misuse
Principle:
⚖️ Post-employment fiduciary duty includes strict confidentiality obligations
Case 4: Robb v. Green (1895)
Court: English High Court
Facts:
- Former employee copied customer lists before leaving job
Held:
- Misuse of confidential client lists is breach of duty
- Even preparation to compete can be wrongful
Principle:
⚖️ Fiduciary breach occurs if employee prepares to misuse employer’s assets before leaving
Case 5: Queensland Mines Ltd. v. Hudson (1978)
Court: Privy Council
Facts:
- Director resigned and later used knowledge for competing venture
Held:
- No breach if opportunity was abandoned by company
- Fiduciary duty depends on whether opportunity still belongs to employer
Principle:
⚖️ Post-employment fiduciary breach depends on continued ownership of opportunity
Case 6: Industrial Development Consultants Ltd. v. Cooley (1972)
Court: English High Court
Facts:
- Managing director resigned after securing contract for himself using company information
Held:
- Director breached fiduciary duty by exploiting opportunity during employment
Principle:
⚖️ Corporate opportunity taken using insider position is a breach, even if formal resignation follows
Case 7: Arklow Investments Ltd. v. Maclean (1970)
Court: New Zealand Court
Facts:
- Former director used confidential knowledge post-resignation
Held:
- Cannot exploit confidential information obtained during fiduciary relationship
Principle:
⚖️ Fiduciary obligations include non-exploitation of confidential knowledge after exit
Case 8: Reading v. Attorney-General (1951)
Court: House of Lords (UK)
Facts:
- Soldier used uniformed position to assist illegal activity
Held:
- Fiduciary-like abuse of position leads to liability for profits gained
Principle:
⚖️ No one may profit from misuse of position of trust
6. Key Principles from Case Law
(A) Confidentiality survives employment
- Strongest enforceable duty after exit
(B) General skill is not protected
- Employees can use experience freely
(C) Corporate opportunity doctrine applies
- Cannot take employer’s business opportunities
(D) Preparation vs misuse distinction
- Preparation to compete is allowed, but misuse is not
(E) Loyalty ends, but trust obligations remain
- Full fiduciary loyalty ends, but limited duties survive
7. Practical Applications
Post-employment fiduciary duties are relevant in:
- Corporate executives joining competitors
- IT employees handling sensitive data
- Consultants and advisors switching firms
- Directors resigning and starting competing businesses
- Financial sector employees dealing with client portfolios
8. Legal Remedies for Breach
Courts may grant:
- Injunctions
- Damages
- Account of profits
- Contractual enforcement (non-disclosure agreements)
9. Conclusion
Post-employment fiduciary duties ensure that employees and fiduciaries do not misuse trust, confidential information, or corporate opportunities after leaving employment. Courts consistently protect confidentiality and corporate integrity, while balancing the individual’s right to pursue new employment.
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