Officers of any given business entity in New Orleans have both an ethical and legal duty to make decisions that benefit the company rather than themselves. Unfortunately, sometimes when you put your faith in a business partner, they will fail to meet the challenge. Certain self-interested behaviors may rise to the level of a breach of the duty of loyalty, which can make that party liable for damages.
Breach of Loyalty in Louisiana Disputes
Board members, upper management, and other agents are required to put the interests of their company and its shareholders above their own personal gain. For instance, a board member that has a stake in another company must work to avoid conflicts of interest when the subject of approving contracts with that entity comes up.
That’s only one in a long list of ways someone involved with a business may breach their duty of loyalty, however. An experienced business litigation lawyer can help you gather evidence of the breached duty and mitigate damage to your company in the event of:
- Agents abusing their positions of trust to increase the private interests of a third party
- Employees funneling customers and funds towards a new venture before resigning
- Misappropriation of equipment, labor, or funds
- Partners taking more than they are owed
- Self-dealing by directors, managers, or officers of a company
- Stolen trade secrets
- Trademark infringement
Of course, there are situations where a director or some other agent would have a valid reason to involve a third party in the business. In the event there is apparent self-interest, a majority of neutral or disinterested members may vote to allow the transaction anyway, as it may be in the best financial interest of the company.
Establishing Fiduciary Duty and Gathering Evidence of the Breach of Loyalty
For a business lawsuit to be effective, you first need to prove the other party legally held a fiduciary duty towards you or your company. In certain cases, that’s a fairly simple process. There are some business relationships where a fiduciary responsibility is very clearly implied by law, such as either a beneficiary or client and their:
- Financial advisor
- Real estate agent
However, an obvious fiduciary responsibility may not be as clear-cut in other business relationships. That’s why you need an attorney’s assistance if you feel a business partner, manager, or some other party has breached their duty of loyalty and caused financial harm.
It is vitally important to get in touch with an experienced lawyer as soon as the breach of duty is discovered, especially if you are concerned there may be criminal activity involved that could harm your company’s reputation. An attorney can help you procure the evidence necessary to file a lawsuit within the statute of limitations and prove key elements such as:
- A relationship exists that causes the defendant to have a fiduciary duty to a beneficiary, client, partner, or boss.
- That duty was breached by the other party in some way, such as self-dealing, stealing trade secrets, using company resources for personal gain, or so on.
- What specific damages should be owed to you due to the breach of loyalty
If litigation is successful, a court may order the defendant to pay restitution for their breach of loyalty. Because damages can be high, the other party is likely to fight against paying anything. That’s one key reason you should have a trial-ready attorney in your corner. These cases can become complex quickly, requiring counsel who will aggressively defend your business interests and stand up for your legal rights.
Protect Your Business by Consulting a Qualified Louisiana Business Litigation Attorney
Do you have more questions about resolving a business dispute? If you think someone has breached their duty of loyalty and may owe you damages, give us a call at 504-500-1111 or send a message online here to schedule a consultation and discuss your case.