Duane Jones Co., Inc. v. Burke
New York Court of Appeals
117 N.E. 2d 237 (1954)
Duane Jones built his advertising agency, DJCI (plaintiff), to $9 million in billings, but after a $6.5 million billing loss and executive departures blamed on Jones's conduct, several officers and directors (defendants) attempted to buy Jones out - a deal that never closed. While still serving as DJCI officers and directors, several of them incorporated a competing advertising agency, then resigned from DJCI; the new agency proceeded to hire 71 of DJCI's 132 employees, including its president, vice president, secretary, and treasurer, and took many of DJCI's clients. DJCI sued for breach of the duty of loyalty and won a jury verdict; the defendants appealed.
Whether a corporate officer owes a duty of loyalty not to compete with his own corporation.