On April 19, 2023, the Second Department issued a decision in Parker Waichman, LLP v. Mauro, 2023 NY Slip Op. 02014, holding that the faithless servant doctrine does not prevent an employee from preparing to leave her employer, explaining:
Under the faithless servant doctrine, one who owes a duty of fidelity to a principal and who is faithless in the performance of his or her services is generally disentitled to recover his or her compensation, whether commissions or salary. The faithless servant doctrine applies when an employee-agent breaches their duty of loyalty owed to the employer-principal. However, there is no obligation on the part of an employee to remain with their employer in the absence of a contractual agreement. Additionally, in the absence of such an agreement, taking preparatory steps, while still in the employer’s employ, to enter into a competing business is not a breach of an employee’s duty of loyalty as long as the employee does not use the employer’s time or resources to do so, never lessens his or her work on behalf of the former employer, and never misappropriates to his or her own use any business secrets or special knowledge. Further, a law firm does not own a client or an engagement, and is only entitled to be paid for services actually rendered, particularly since a client’s legal matter belongs to the client, not the lawyer. Indeed, clients have the right to terminate the attorney-client relationship with or without cause at any time. Consistent therewith is the recognition that attorneys departing their law firm-employer may inform clients with whom they have a prior professional relationship about their impending withdrawal and new practice, and remind clients of their freedom to retain counsel of their choice, i.e., the new firm, the current firm, or any other firm.
Contrary to PW’s contention, the evidence adduced at trial supports the Supreme Court’s determination that, during the relevant time period in question, neither Alonso, Krangle, nor Mauro breached their duty of loyalty to PW under the faithless servant doctrine, such that disgorgement of the subject attorneys’ fees and compensation was warranted. Rather, the weight of the evidence supports the conclusion that none of these defendants used PW’s time or resources, lessened their work on behalf of PW, or misappropriated for their own use any PW business secrets or special knowledge, while taking preliminary steps to form AK.
(Internal quotations and citations omitted).