It often starts quietly. A partner decides to “branch out” with a new project. At first, it seems harmless—just another business venture. But sometimes, that side hustle isn’t harmless at all.
Over time, clients may be pulled away to the new venture, company resources may be misused, and employees may feel torn between competing loyalties. What was once a united partnership begins to unravel from within.
📍 When this happens, the side hustle isn’t just an inconvenience—it can be considered a betrayal and a breach of fiduciary duty.
What Is a Breach of Fiduciary Duty?
Business partners owe each other a fiduciary duty, which includes:
- Acting in the best interest of the partnership
- Avoiding conflicts of interest
- Not using company resources for personal gain
- Being transparent about outside business activities
When a partner puts their own side business ahead of the partnership’s success, they may be violating this legal responsibility.
How Side Hustles Turn Into Legal Disputes
Disputes involving side hustles often include:
- Client diversion — partners secretly taking customers to their new venture.
- Resource misuse — company funds, employees, or materials used for personal business.
- Conflict of interest — prioritizing a separate business over partnership obligations.
- Loyalty breakdown — team members losing trust in leadership.
These conflicts can threaten the financial health and stability of the entire company.
Legal Options for Businesses and Partners
At Alisme Law, we help businesses navigate these difficult moments of betrayal. Depending on the situation, we may:
- Enforce the terms of a partnership or operating agreement
- Pursue litigation for breach of fiduciary duty
- Negotiate a partner’s exit from the business
- Safeguard the company’s long-term future through legal strategy
Every case is unique, but the goal remains the same: protect the business and hold partners accountable.
Protecting Your Company from Internal Betrayal
One side hustle should never erase years of hard work. If you suspect that a business partner is using company resources or clients for their personal gain, it’s time to take action.
📞 Call (917) 809-5451 or 📧 email info@alismelaw.com to schedule a consultation today.