Henkel of Am., Inc. v. Bell

Henkel of Am., Inc. v. Bell

Opinion

 [*246]  JOHN K. BUSH, Circuit Judge. Henkel of America ("Henkel") appeals the grant of summary judgment in favor of Craig Bell and Knight Capital Partners Corporation ("KCP") arising out of Bell's alleged breaches of his employment contract and fiduciary duties. According to Henkel, Bell breached his contractual and fiduciary obligations by playing both sides of a proposed sublicensing agreement between Henkel and KCP that culminated when Bell left Henkel to join KCP as an executive shortly before the deal fell through.

The district court granted summary judgment on the ground that Henkel failed to introduce evidence of damages proximately caused by Bell's conduct. Because damages [**2]  are not an element of a claim for breach of fiduciary duty under applicable Delaware law, and because Henkel has introduced sufficient evidence of some entitlement to a remedy that satisfies the minimal evidentiary burden that applies to such claims, we REVERSE as to that count. We otherwise agree with the district court and therefore AFFIRM as to all other counts.

Bell was an employee of Henkel's wholly owned subsidiary, Henkel Corporation, where, from 2010 until January 2015, he served as Vice President of Marketing & Technical Services for Henkel's Adhesive Technologies business unit in North America. That role entitled Bell to a salary of $165,000 as well as participation in Henkel's Executive Financial Planning program, its Executive Health Program, a Deferred Compensation plan, and other benefits. Bell also was eligible for incentive-based bonuses, and he received such a bonus—in the amount of $142,000—for his work in 2014 (his last year as a Henkel employee). Because of his position, Bell had access to Henkel's confidential information, including financial and strategic plans.

As a result of this access, and in exchange for his salary and benefits, Bell owed duties not to engage [**3]  in conflicts of interest or disclose confidential information, as required by his employment contract, under which he was to "abide by any and all policies and procedures adopted by the [c]ompany." R. 40-2 at PageID 958. Henkel's Code of Conduct, in turn, provides that "[w]e demand of ourselves, and those with whom we associate, the highest ethical standards." R. 40-3 at PageID 989. It goes on to state: "all [Henkel] employees should avoid situations that may lead to a conflict between their personal interests and those of Henkel," and directs that Henkel employees "act in the best interests of Henkel to the exclusion of any personal advantage" during contacts with customers and competitors. Id. The Code of Conduct also prohibits "[t]he communication of confidential internal information . . . to unauthorized personnel either inside or outside Henkel," id. at PageID 1003, and requires that any conflict of interest, or potential for conflict of interest, be disclosed, id. at PageID 1015. Such conflicts of interest include "[a] second job providing services to or consulting with organizations doing business with or directly competing against Henkel . . . . Activities or engagements of [**4]  this kind would never be permissible if such work or services were for a company you interact with as part of your job." Id.

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