On November 25, 2025, the North Carolina Business Court issued an important opinion in Estevez v. C&S Commerce, LLC, reaffirming a principle that continues to shape limited liability company (“LLC”) disputes across the state: fiduciary duty waivers in LLC operating agreements are enforceable. The case serves as a pointed reminder that, in North Carolina, LLCs are first and foremost creatures of contract—and what members agree to at inception can significantly limit their rights when disputes surface.
The dispute arose between minority members Julian and Oscar Estevez and the company’s majority owner and sole manager, Cameron Chad Clay. The parties formed C&S Commerce, LLC to acquire and operate another business, with Clay holding a 70% ownership interest and broad managerial authority. Crucially, the operating agreement—signed by all members—contained an express waiver of fiduciary duty claims against Clay. After their relationships deteriorated, including failed buyout negotiations, alleged threats to devalue the minority interests, termination of the Estevez Brothers, and refusals to provide financial information, the minority members sued and asserted, among other claims, breach of fiduciary duty.
The Business Court dismissed that claim with prejudice. While North Carolina law dictates a majority member exercising control over an LLC may owe fiduciary duties to minority members, the Court made clear that the issue was ultimately irrelevant here. Because the operating agreement expressly waived fiduciary duties, the Court enforced the waiver as written. Arguments that the waiver was unconscionable or contrary to public policy failed, particularly where the Complaint lacked allegations supporting those theories. The Court emphasized North Carolina’s strong commitment to freedom of contract—even when the deal later proves harmful to one side. Importantly, the Court distinguished fiduciary duties from the duty of good faith and fair dealing, which cannot be waived and may still support a breach of contract claim.
Estevez is a stark reminder that minority member rights are easy to lose if they are contractually waived. Fiduciary protections that many business owners assume exist by default may disappear entirely with a few lines in an operating agreement. At Lord & Lindley, we regularly represent minority and majority owners in high-stakes LLC disputes involving fiduciary duties, contract claims, and governance breakdowns. If you are navigating an LLC conflict—or reviewing an operating agreement before signing—it is critical to understand what rights you may be giving up. Call us at 704-457-1010 or visit www.lordlindley.com to learn more.