Is a Former Employee Liable for Continuing Events That Began Before His Departure ?
In Comedy Cottage, Inc. v. Berk, 145 Ill. App. 3d 355, 495 N.E.2d 1006, 99 Ill. Dec. 271 (1986), former corporate officer was held to have breached his fiduciary duty after his resignation.
There, we determined that even assuming arguendo the former officer did not begin competing for the lease until after his resignation, he remained bound by his fiduciary duty because his acquisition of the lease was based upon knowledge acquired during his employment.
Thus, under the circumstances, the trial court did not err in finding that the former officer breached his fiduciary duty.
Likewise instructive is Dowell v. Bitner, 273 Ill. App. 3d 681, 652 N.E.2d 1372, 210 Ill. Dec. 396 (1995), where a partner, who was a corporate officer, was determined to be subject to liability for transactions that concluded after his resignation but began during his employment.
Judgment was improvidently granted at the conclusion of the plaintiffs case based on the trial court error in rejecting evidence of breach through events continuing after the defendant's resignation but beginning before his departure.
The Dowell court held that, although a corporate officer owes the corporation no fiduciary duty after he resigns, the officer's resignation will not sever liability for transactions completed after termination of the party's association with the corporation if the transactions began during the existence of the relationship or were founded on information acquired during the relationship. Dowell, 273 Ill. App. 3d at 691, 652 N.E.2d at 1379-80, citing Dangeles v. Muhlenfeld, 191 Ill. App. 3d 791, 796, 548 N.E.2d 45, 49, 138 Ill. Dec. 815 (1989).