Faithless Servant Doctrine Does Not Apply to Actions That Did Not Use Plaintiff’s Time or Resources

On April 14, 2022, the First Department issued a decision in Jeremias v. Toms Capital LLC, 2022 NY Slip Op. 02495, holding that a faithless servant claim could not be based on actions taken to start a new business that did not use the plaintiff’s time or resources, explaining:

The faithless servant claim against Boyle was correctly dismissed. 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.

(Internal citations omitted).

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