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Law School Case Brief

General Automotive Mfg. Co. v. Singer - 19 Wis. 2d 528, 120 N.W.2d 659, 1963 Wisc. LEXIS 491

Rule:

Under a fiduciary duty to an employer, an employee is bound to the exercise of the utmost good faith and loyalty so that he does not act adversely to the interests of the employer by serving or acquiring any private interest of his own. The employee is also bound to act for the furtherance and advancement of the interest of the employer.

Facts:

General Automotive Manufacturing Company (”General Automotive”) hired John Singer as general manager of its business and affairs and General Automotive accepted employment pursuant to a written contract. General Automotive brought suit against Singer for breach of contract. The trial court found that Singer had breached his contract of employment with General Automotive because his sideline business was in direct competition with General Automotive. Singer appealed.

Issue:

Did Singer breach his contract of employment with General Automotive by engaging in business activities directly competitive with the company?

Answer:

Yes

Conclusion:

The Court modified the trial court's judgment, and as modified, affirmed it. The Court held that by failing to disclose all the facts relating to certain orders and by receiving secret profits from the orders, Singer violated his fiduciary duty to act solely for the benefit of General Automotive. Therefore, Singer was liable for the amount of profits he earned in his sideline business. The Court held that Singer's operations were in competition with General Automotive, and that he had received undisclosed personal profits. The Court found that the amount of recovery by General Automotive was to be limited by Singer's stipulation. Therefore, the judgment was modified reducing the recovery allowed by the trial court.

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