Gibbs v. Breed, Abbott & Morgan

Charles Gibbs and Robert Sheehan (plaintiffs), were partners in the trusts and estates department of the law firm Breed, Abbott & Morgan (Breed) (defendant). Gibbs was head of Breed’s trusts and estates department, and became dissatisfied with the firm. Gibbs began interviewing with new law firms. Gibbs approached Sheehan and persuaded Sheehan to join him in moving to a new law firm. Gibbs and Sheehan held joint interviews with prospective firms. Eventually, Gibbs and Sheehan told the firm’s presiding partner that they had accepted offers to join the firm of Chadbourne & Park (Chadbourne). A few days later, Gibbs and Sheehan sent Chadbourne a memo listing the names, salaries, billable hours, education, and other information about the firm’s trusts and estates department. Sheehan had prepared the list prior to notifying the firm of his plans to leave the firm. The memo was intended to assist in recruiting other Breed associates to Chadbourne. In the weeks following Gibbs’s and Sheehan’s resignations, Chadbourne made employment offers to several employees from the firm’s trusts and estates department. Gibbs and Sheehan sued Breed to recover money due under the firm’s partnership agreement. The firm filed a counterclaim alleging that Gibbs and Sheehan breached their fiduciary duty to the firm’s partnership. The trial court found that Gibbs and Sheehan, in planning and implementing their withdrawal from the firm, breached their fiduciary duty to the partnership. The trial court assessed $1.8 million in damages, and Gibbs and Sheehan appealed.