General Counsel Allegedly Violates Professional Ethics Rules and Fiduciary Responsibility

This case has to do with the circumstances surrounding the departure of the former general counsel of an energy company and the legal ethics surrounding his departure and his subsequent activity, starting his own solar panel energy company in Louisiana.

After having worked and provided legal advice to a solar panel energy company for three years, this general counsel left to start his own alternative energy company, which was designed to become a direct competitor to his former employer, with a business model that was nearly identical to that employer.

His original employer has claimed that he misused the opportunity and the position of trust they put him in as general counsel for their energy company, by acquiring and using proprietary information from their company to start his own. As general counsel, he had direct contact with company executives and access to a lot of proprietary information, such as business plans, financial records and much more and proceeded to use that to start his new company. His former company asserts that, because a lot of the information he used to build his new company belonged only to their company, his new company is not legitimate. They claim that he had a fiduciary duty not to use that proprietary information for his own benefit, or to their detriment. In essence, by creating his own energy company, he did both, according to the company.

Question(s) For Expert Witness

Do you believe that this could be a misappropriation of corporate opportunity case? If so, please support your claim.

Expert Witness Response E-000342

This case appears to involve the former general counsel’s misappropriation of corporate opportunity, as well as violations of a number of other professional ethics rules. Misappropriation of corporate opportunity involves using opportunity or knowledge that rightly belongs to the company you worked for, and using that information or knowledge for your own personal benefit violates ethical rules. Corporate attorneys, especially, have a fiduciary responsibility to not use the knowledge they obtain in the course of acting in their position to create personal benefit. This former employee breached his legal ethical obligations to his company, especially given his trusted position and his duty as a corporate lawyer.

A case could also be made for a case of misappropriation or disclosure of trade secrets, which is a recognized tort that could protect the original employer’s right to keep its useful corporate information private.