Illinois court revives disgorgement remedy against two-timing manager

Aside from termination from employment, employers sometimes feel they have little recourse against an employee who fails at the job—or worse, engages in misconduct. One of the few claims available to employers against a former employee in such a situation is breach of fiduciary duty. A recent decision by the Appellate Court of Illinois does a deep dive into this type of claim, and the case is a reminder that in appropriate circumstances, employers may be able to recoup the compensation paid to employees during the time they were breaching their fiduciary duty.

Logistics nightmare

Biren Parekh has spent most of his professional life in the freight-forwarding and logistics business. In the mid-1990s, he contacted Anand Sheth, a principal of CKB Global Logistics PVT, Ltd., which is a parent company based in India whose holdings include an international group of logistics and shipping companies. CKB agreed to hire Parekh and charged him with opening Ark Shipping, Inc., an Illinois corporation formed in 1999 to launch the Indian company’s first foray into the U.S. market.