The Supreme Court of New Jersey has held that a court may order the equitable disgorgement of an employee’s compensation when the employee has breached the duty of loyalty to the employer despite the absence of economic loss to the employer as a result of that breach. Kaye v. Rosefielde, 121 A.3d 862 (N.J. 2015). The court found that the equitable remedy of disgorgement is derived from principles of contract law: if the employee breaches the duty of loyalty owed to the employer, the employee may be required to forgo the compensation earned during the period of disloyalty. In so holding, the court reversed the ruling of the appellate court and remanded the case to the trial court to determine whether plaintiff is entitled to disgorgement and, if so, the portion of the general counsel’s salary which should be disgorged.
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Disgorgement Of Compensation Of Disloyal General Counsel Potential Remedy
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