Agent's Duties to Principal. Sam Kademenos was about to sell a $1 million life in-surance policy to a prospective customer when he resigned from his position with Equitable Life Assurance Society. Before resigning from the company, he had expended
substantial amounts of company money and had utilized Equitable's medical examiners to procure the $1 million sale. After resigning, Kademenos joined a competing insurance firm, Jefferson Life Insurance Co, and made the sale through it. Has he breached any duty to Equitable?
Agent's duties to principal
Yes. Kademenos has breached his duty of loyalty to Equitable Life. Under principal-agent law, an agent owes a duty of loyalty to the principal, and it is the agent's duty in all dealings affecting the subject matter of the agency to act with the utmost good faith, in loyalty, for furtherance and advancement of the principal's interests. Since Kademenos, as an agent of Equitable, had utilized Equitable's resources in advancing the interests of Equitable, he could not thereafter resign and sell a competitor's policy, since this would be detrimental to his principal. While an agent can normally terminate the relationship with the principal at will, he or she cannot immediately thereafter act contrary to the interests of the former principal by utilizing the principal's resources to the principal's detriment.
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