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NY: In House Counsel is Fiduciary First, Employee Later

Keller v. Loews Corp., 895 NYS 2d 376 (2nd Dept. 2010)

Facts:  In house counsel sued for religious discrimination after the termination of his employment.  The defendant counterclaimed for breach of fiduciary duty.  More specifically, the defendant alleged that counsel disclosed confidential information in his discrimination complaint.  The trial court dismissed the counterclaim on the ground that there is no fiduciary relationship between an employer and an at-will employee.

Issue:  Does in house counsel owe any fiduciary upon the termination of his at-will employment? 

Ruling:  Yes.

[A] lawyer, as one in a confidential relationship and as any fiduciary, is charged with a high degree of undivided loyalty to his client.  Indeed, the duty to preserve client confidences and secrets continues even after representation ends.  Thus, we conclude that an in-house attorney, his status as an at-will employee notwithstanding, owes his employer client a fiduciary duty.

Lesson:  In house counsel owes his client a fiduciary duty irrespective of his status as an "at-will employee".  The fiduciary duty continues even after termination of counsel’s employment.

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Posted in: Fiduciary Duty, New York