The Man Signed a Contract

Posted on September 17, 2009 by Rob Radcliff

An update on Robert McCann's lawsuit challenging a non-compete agreement he entered into with Merrill Lynch.  McCann wants to work for UBS, but BofA won't let him.  BofA lawyer Steven M. Kayman's take on the lawsuit:

This man signed a contract.  He got paid a substantial amount of money for it. Now he wants the court’s permission to break it.

The Judge has reserved ruling and encouraged the parties to settle.  Turns out McCann left Merrill when he did not receive a bonus in 2007.  This was after a $6.85 M bonus in 2005 and $8.85 million in 2006.  Not so sure a jury would be very sympathetic.

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Taking it to the employer: Challenging the non-compete.

Posted on September 3, 2009 by Rob Radcliff

It's been a few weeks since I've discussed BofA but once again the company is involved in litigation, this time over a non-compete.  This time, BofA is on the receiving end of a lawsuit filed by Robert McCann, former head of Merrill Lynch's wealth management unit.  McCann's lawsuit challenges  the enforceability of a non-compete he entered into with Merrill.  The parties are currently in settlement negotiations.  McCann is reportedly going to work for UBS.

Robert McCann

 

McCann's strategy of attacking the non-compete with a lawsuit  is often recommended but rarely used by departing employees.  Generally, most employees don't have the war chest necessary to take on their former employer and institute costly litigation.  Most employees would rather wait to see if the former employer is going to take legal action.  McCann most likely and rightfully assumed BofA would sue if he went to work for UBS.  Instead of defending a lawsuit he initiated it and now looks to be close to a settlement.  This can be a solid strategy in the right situation.

 

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When will BofA join The Protocol?

Posted on July 20, 2009 by Rob Radcliff

Despite indications that it would join The Broker Protocol last year when it acquired Merrill Lynch, BofA has yet do so. The Protocol, which has been frequently discussed in this blog, allows departing brokers/advisors leaving a firm to avoid claims for breach of non-compete or non-solicit agreements.

A Merrill Lynch spokesman has indicated that Merrill is a member of the Protocol and anticipates Bank of America Investment Services will join the Protocol in the future, but there is no date that is certain.

There are approximately 300 members of the Protocol.  As long as Bank of America does not participate it retains the right to sue departing brokers or financial advisors for violation of non-compete or non-solicitation agreements.

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