Can an employee take advantage of an investment opportunity? Report from the Shearman & Sterling Moot 2011
- When can a senior employee of a company take advantage of an investment opportunity offered both to him and the company?
- Does it matter if the company refuses the opportunity?
- Does it matter if the company knows that it was offered to the employee and does not prohibit the employee from investing?
- And if the employee is in breach of his duties does he hold all profits obtained, both from that opportunity and subsequent opportunities, on constructive trust for his employer?
These questions were the subject of passionate submissions on Saturday 29th January 2011 at the 8th annual Shearman and Sterling University of Oxford Mooting Competition.
After preliminary rounds and semi-finals judged by associates and partners of Shearman and Sterling, two teams advanced to the grand final.
Ms. Pia Dutton (Keble) and Mr. Jonathan Worboys (St Edmund Hall) argued the case for the company while Ms. Di Yu (Brasenose) and Mr. Richard Hoyle (Brasenose) represented the employee.
Mr Justice David Steel , who came up from London to judge the final on a day off from the Commercial Court, remarked on the very high standard of the advocacy and the difficult decision to make concerning the winning team.
The moot was awarded to Ms Yu and Mr Hoyle, both from Brasenose. However, the legal issue was resolved in favour of the company: the employee had placed himself in a position of conflict and was required to hold his consequential profits on trust for the company.