Bancroft-Whitney Co. v. Glen

In Bancroft-Whitney Co. v. Glen, 64 Cal. 2d 327, 49 Cal. Rptr. 825, 411 P.2d 921, 935 (Cal. 1966), the corporate plaintiff and the corporate defendant, Bender, were publishing companies. 411 P.2d at 924. Glen was plaintiff's president and editor-in-chief. Id. at 926. The evidence demonstrated that Bender recruited Glen from the plaintiff company and that Glen, in turn, recruited editors whom he managed by offering them employment contracts, raises and a percentage of the profits at the new company. Id. at 927-29. The court stated that "the undisputed evidence showed a consistent course of conduct by Glen designed to obtain for a competitor those of plaintiff's employees whom the competitor could afford to employ and would find useful." Id. at 936. Thus, the court held that Glen had violated his fiduciary duty to plaintiff "as a matter of law." Id. In Bancroft-Whitney Co. v. Glen, the evidence showed that while still president of the plaintiff company, the defendant assisted his soon-to-be new employer, Matthew Bender & Co., a competitor of the plaintiff, in effecting a raid on the plaintiff's key personnel by providing a list of the key employees and their salaries to the new employer, suggesting salaries to be offered by the new employer and personally soliciting several employees. (Id. at pp. 347-348.) The president and his hand-picked group of employees resigned en masse. (Id. at p. 344.) The Supreme Court found that this conduct amounted to a breach of fiduciary duty as a matter of law. (Ibid.) The Court stated: "We need not decide whether any of these acts would constitute a breach of fiduciary duty, taken alone, since there can be little doubt that, in combination, they show a course of conduct which falls demonstrably short of 'the most scrupulous observance' of an officer's duty to his corporation." (Id. at p. 348.)