Gibbs v. Breed, Abbott & Morgan
New York Supreme Court Appellate Division
710 N.Y.S.2d 578 (2000)
Gibbs and Sheehan (plaintiffs), partners heading Breed's (defendant) trusts and estates department, secretly interviewed together with other firms and, before formally notifying Breed of their departure, prepared and sent a detailed memo to their new firm, Chadbourne, listing Breed employees' names, salaries, billable hours, education, and other sensitive information to help recruit them; Chadbourne subsequently made offers to several Breed employees in the weeks after Gibbs and Sheehan's resignation. Gibbs and Sheehan sued Breed for money owed under the partnership agreement, and Breed counterclaimed for breach of fiduciary duty; the trial court found a breach and assessed $1.8 million in damages, and Gibbs and Sheehan appealed.
Whether a partner owes a duty of loyalty to the partnership that includes not placing the partnership at a competitive disadvantage.