Bad behavior in the workplace is in many instances a legal wrong that leads to legal consequences. Sexual harassment, for example, leads to consequences under tort and employment law. But if the perpetrator is a director or officer of a Delaware corporation, does such bad behavior give rise to a claim by the corporation for breach of fiduciary duty against the miscreant fiduciary? The answer for now is “not always.” In Brola v. Lundgren, C.A. 2024-1108-LWW, 2025 WL 3439671 (Del. Ch. Dec. 1, 2025) (Will, V.C.), the Delaware Court of Chancery held that sexual harassment by a director or officer does not necessarily give rise to a corporate claim for breach of the duty of loyalty, even though the corporation may have suffered losses as a result of the fiduciary’s misconduct.
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