Brief Fact Summary. Plaintiff J. Edward Day, a Washington attorney, worked as a senior partner for Defendant Sidley & Austin, a Chicago-based firm. Defendant forced Plaintiff to share the chairmanship position of the Washington office after they merged with a second firm.
Synopsis of Rule of Law. The fiduciary duty in a partnership ensures that a partner does not profit for themselves at the expense of the partnership.
Generally, common law and statutory standards concerning relationships between partners can be overridden by an agreement reached by the parties themselves.View Full Point of Law
Issue. The issue is whether Defendant violated a fiduciary duty by changing Plaintiff’s title without his consent.
Held.Defendant did not violate a fiduciary duty to Plaintiff by their merger and subsequent title change for Plaintiff. The partnership agreement that Plaintiff signed authorized the executive committee to appoint members and chairpersons, so Plaintiff was aware of the possibility of a co-chair. Also, Defendants decisions were not made to personally profit at the expense of the firm, and their fiduciary duty does not extend to what Plaintiff proposes. Finally, even if Plaintiff was aware of the title change, his vote against the merger would not have affected anything because a proposed merger only requires a majority vote unless specifically stated otherwise in the partnership agreement.
Discussion. Members of a partnership do not violate a fiduciary duty to one partner simply because that partner believes that their position was de-valued in any manner. If the other partners are following the agreement provisions and they are exercising their rights in a manner that is beneficial for the partnership over their personal interests, then they are meeting their duty.