In almost every executive employment agreement, there’s a “conflict of interest” provision. While the term may be defined in different ways, in most cases, the executive agrees that he will not act in conflict with the employer’s best interest and that he will disclose any potential conflict of interest immediately.
An executive may be considered to have a conflict of interest if:
• The executive or his close family member has a financial interest in an entity that has a purpose or an interest that conflicts with the employer’s interests;
• The executive provides consultation services to an entity that does business with the employer;
• The executive’s close family member owns, works for, or provides services for an entity that does business with the employer or that seeks to do business with the employer;
• The executive receives compensation, gifts, favors, entertainment, or other benefits from an entity that does business with the employer or that seeks to do business with the employer; or
• The executive uses his employer’s confidential, inside information for his own advantage.
As a general rule, an executive who believes a potential conflict of interest may exist should immediately disclose that conflict to his superior or to the board of directors. For advice regarding a possible conflict of interest situation, contact the employment law lawyers at Dallas-based Clouse Dunn LLP. Send an email to email@example.com or call (214) 239-2705.