18:49
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LSDefine
Simple English definitions for legal terms
fickle-fiduciary rule
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A quick definition of fickle-fiduciary rule:
A fickle-fiduciary rule is a rule that says if someone who works for a company or partnership breaks their promise to be loyal to their employer, they have to give back all the money and benefits they got after they broke their promise. This usually happens when someone leaves to work for a competitor or start their own business. Even if they didn't hurt their old employer, they still have to give back everything they got. Sometimes, if the rule is too harsh, the court might consider other things before making a decision.
A more thorough explanation:
The fickle-fiduciary rule is a legal principle that requires a partner or employee to give up all compensation, bonuses, and other benefits received after violating their fiduciary duty to their employer or partnership. This rule usually applies to individuals who plan to leave their current job to work for a competitor or start their own competing business.
For example, if an employee steals confidential information from their employer and uses it to start a competing business, they would be in breach of their fiduciary duty. If the fickle-fiduciary rule is applied, the employee would have to forfeit all compensation and benefits received after the breach occurred.
It's important to note that mitigating factors, such as the absence of harm to the employer or partnership, are usually not considered when applying this rule. However, some courts have found that if a strict application of the rule would result in unjustly harsh consequences, mitigating factors must be taken into account.