United States v. Betts, 511 F.3d 872 (9th Cir. 2007)

Marcus Brandon Betts, who worked for TransUnion (one of the three major credit reporting agencies), took bribes to conspire with his co-defendants to falsely improve credit scores. According to the Ninth Circuit, “it was a kind of private sector ticket-fixing scheme.” Betts falsified 654 credit histories, which generated about a million dollars in losses to lenders. He pled guilty to conspiracy but challenged some of the conditions of his supervised release, including a restriction that Betts “shall not be employed in any capacity wherein he has custody, control, or management, of his employer’s funds, lines of credit, or any similar sources of money.” Betts argued that the restriction was an abuse of discretion by the trial court because his crime did not involve stealing from his employer. The Ninth Circuit disagreed and held that “as an employee, he owed [TransUnion] a fiduciary duty of loyalty. An employee’s duty of loyalty includes a duty to act solely for the interests of his employer within the business area for which he is employed, account to the employer for money received in connection with his work, and avoid undisclosed interests that might affect his conduct as an employee.” Cf. Otsuka v. Polo Ralph Lauren Corp., 2007 WL 3342721 (N.D. Cal. Nov. 9, 2007) (employer stated claim against employee for breach of duty of loyalty associated with allegedly fraudulent transactions).