“FAITHLESS SERVANT DOCTRINE” REQUIRED FORFEITURE OF REFERRAL FEE
When a law firm sued its attorney-employee, the former alleged that the latter triggered the “faithless servant doctrine” when he diverted a case to another law firm.
After the parties engaged in motion practice and asked the New York Supreme Court for pre-trial relief in their favor, the judge ended up siding with the employer. And, on appeal, the Appellate Division, First Department, agreed with that outcome.
Apparently, the employee did not deny that he referred a matter to another firm without telling his employer, and that he pocketed a $140,000 fee. Since that violated a duty of loyalty owed to his firm, the AD1 concluded that the employer was entitled to those monies.
Would you refer that out?
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