Managing the Financial Side of Commercial Fleets

Fiduciary Duty: ‘Dancing with the One that Brought You’

Every employee owes his or her employer a fiduciary duty, a level of responsibility and obligation to promote the company’s well-being and long-term success.

July 2009, by Richard Alaniz

In addition to being a memorable Shania Twain song, the lyrics are also a shorthand way of thinking about "fiduciary duty." For most people, the term brings up images of bankers, chief financial officers, and members of the corporate board. But did you know all employees, right down to the secretary answering phones, owe a duty of loyalty to the organizations for which they work?

In an era of outsourcing and layoffs, some people may scoff at the idea of any loyalty existing between employees and employers. But it does exist, and understanding the obligations and privileges of a fiduciary duty can bring great benefits to the well informed and great costs to the less so.

Each state employs its own definition of fiduciary duty, but employees in every state have obligations to their companies. For example, in Maryland, an employee has a duty to "act solely for the benefit of his employer, avoiding all conflicts between his duty to his employer and his own self-interest."

Some breaches of fiduciary duty are obvious. An employee who uses fleet vehicles or company supplies for his personal lawn-grooming business is clearly not working for the benefit of his employer. A fleet manager who rents out fleet vehicles and pockets the rental money is committing theft in addition to violating his fiduciary duties.

But fleet employers should recognize other possible breaches of trust that can harm their company's businesses. Think of that talented young fleet manager whom your rival just stole away. Now, imagine he uses the personal relationships he built up with your customers while he worked for you to steal them away to your rival. These questions are closer to real-world events and employers have tools at their disposal they need to use - before the breach occurs.

Driver Duties - Why Is He Always So Late Getting Back?

We'll cover more about managers in a bit, but the most likely breaches will come from company drivers. Many companies do not allow drivers to use fleet vehicles for personal purposes; responsibility for enforcing this policy falls on fleet managers.

The driver who is always 30 minutes late returning from his or her route may genuinely be getting stuck in traffic or have a route that's just too long. Or he may be running a few extra "deliveries" off the books. One is a logistical issue to clear up; the other is potentially a very serious misuse of company resources. It's up to the fleet manager to figure out which.

But drivers also have other duties, including not wasting company resources. They have a duty to keep accurate mileage logs. If one driver is using 30-percent more fuel than other drivers on similar routes, he may be making unauthorized deliveries or he could just have a lead foot. Either way, some action should be taken.

It falls to managers to remind drivers of their fiduciary duties to the company. A company truck is not a sports car. Just as it shouldn't be used for personal business, it shouldn't be used for personal enjoyment either.

If you don't have written policies on issues such as travel speed and route selection, draft them. Policies give employees less wiggle room and limit their discretion. They also provide a reference if discipline becomes necessary.

What About Managers?

Managers' fiduciary duty is particularly important. Often managers have a much broader array of responsibilities and exercise a greater degree of discretion in performing their duties. Because of the inherent trust employers place in them, their capacity for causing damage is also much greater. Employers have many tools for discouraging misbehavior, but they require the employer to take proactive steps to prevent managers from violating their fiduciary duties.

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