In English law, a secret profit is a profit made by an employee who uses his employer's premises and business facilities in order to engage in unauthorised trade on his own behalf. A common example is a bar manager who purchases beer from a brewery in his own right and sells it in the bar in competition with, or in preference to, that of his employer. The profit made thereby is a secret profit.
Where the employee deceived a customer before 15 January 2007 he could be prosecuted for obtaining property by deception, the property being the customer's money and the deception that he was selling his employer's produce. Such offences were predicated on the presumption that a customer would not purchase illicit goods were he aware of their true provenance. The offence of obtaining property by deception has since been repealed and is now replaced by the offence of fraud by false representation.
The employee is not a constructive trustee of the profit for the employer and the employer has no proprietary interest in the profit. Hence, there is no theft from the employer and the profit is merely a civil debt owed by the employee to the employer. However, where more than one person is involved there could be a conspiracy to defraud and, since the coming into force of the Fraud Act 2006, the employee could be guilty of fraud by abuse of position.
Famous quotes containing the words secret and/or profit:
“her secret was as safe
as a fly in an outhouse.”
—Anne Sexton (1928–1974)
“Go bind thou up young dangling apricots
Which, like unruly children, make their sire
Stoop with oppression of their prodigal weight.
Give some supportance to the bending twigs.
Go thou, and like an executioner
Cut off the heads of too-fast-growing sprays
That look too lofty in our commonwealth.
All must be even in our government.
You thus employed, I will go root away
The noisome weeds which without profit suck
The soil’s fertility from wholesome flowers.”
—William Shakespeare (1564–1616)