Fiduciary Employees

AuthorPaul Wearing
Fiduciary Employees
What You Should Know
All employees owe their employer a general duty of good faith, loyalty,
and f‌idelity, even if they are not f‌iduciaries. Fiduciary employees are held
to a higher duty of f‌idelity than ordinary employees.
A job title alone does not determine f‌iduciary status. There must be
real, substantive authority and control exercised by an employee over
an employer’s business to deem the employee a f‌iduciary employee.
High-echelon managers and directors of an organization are normally
found to be f‌iduciary employees and, as such, to owe their employer a
f‌iduciary obligation that transcends their implied duty of f‌ide lity as regu-
lar employees. A f‌iduciary duty is based o n trust, loyalty, and conf‌idence.1
The features that the courts use to determine whether a f‌iduciary rela-
tionship exists are as follows:
1) The f‌iduciar y has scope for the exercise of some discretion or
2) The f‌iduciary can unilaterally exercise that power or discretion
so as to aect the benef‌iciary’s legal or p ractical interests.
3) The benef‌iciary is pe culiarly vulnerable to or at the mercy of the
f‌iduciary holding the discretion or power.2
A f‌iduciary duty has three components:3

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