A decision by a Mellon Bank Corp. subsidiary to sue five defecting money managers last week is an unusual maneuver that could signal that banks are willing to get tough to retain employees.
Banks are "establishing their posture" with respect to investment activities and the people who manage them, said Brian Smith, a lawyer with Mayer, Brown & Platt, Washington, who specializes in banking issues.
With the suit "people will know banks are as sophisticated at handling their problems as securities firms are," Mr. Smith said.
The suit, which was filed on April 21 by Boston Co. Asset Management Inc., a Mellon unit, charged the five employees with hatching a plot to set up a competing firm and steal business away from their former employer. The suit names Desmond J. Heathwood, former chairman of Boston Co. asset management group.
According to the complaint, which was filed in Suffolk County Superior Court in Massachusetts, the money managers took trade secrets, customer lists, and confidential information with them when they abruptly resigned last week.
While the charges are potent, lawyers aren't convinced that Boston Co. has much of a case.
"As a money manager you're entitled to the information you develop in growing your career," said James Archibald, partner at Venable, Baetjer, Howard & Civiletti in Washington. "And clients are entitled to go wherever they want."
It's hard to convince juries that workers, including money managers, should be blocked from a new job or starting their own business, he said.
Mr. Heathwood released a statement calling the lawsuit "ridiculous" and saying there is no truth to any of Mellon's allegations.
Earlier this week, Mellon confirmed that an additional 13 employees of the asset management unit - including money managers, analysts, and traders - also stepped down.
