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Compliance March 6, 2009
Deutsche Bank Sued by Merrill over Hiring ‘Raid’
Merrill Lynch has sued Deutsche Bank, calling its poaching of a group of 12 employees that had collectively 'generated tens of millions of dollars in annual revenues for Merrill Lynch' a 'raid.'
Reported by Alison Cooke
The lawsuit, filed Tuesday in New York State Supreme Court in Manhattan, says Merrill Lynch Treasurer Eric Heaton and 11 other employees resigned on February 3. “Deutsche Bank lured away every single one of these 12 Merrill Lynch employees in virtually simultaneous fashion. These employees gave notice at such a rapid clip that at least one Merrill Lynch employee tried to give notice of his resignation before another of the employees even had finished giving notice himself,’ the suit says. Deutsche Banks announced the hiring of the employees the same day.
According to Merrill “these mass resignations occurred in rapid-fire sequence, were carefully orchestrated, and clearly were part of a plot by Deutsche Bank to raid a key and very profitable Merrill Lynch business unit, the Financial Institutions Group.’ The plans were allegedly made by Deutsche Bank “many months in advance.”
The lawsuit says Heaton failed to give a required six months written notice before leaving, and also violated a noncompetition agreement by joining Deutsche Bank.
Merrill is asking for compensatory damages of more than $100 million, as well as punitive damages, and is also asking for an order to enforce its contract against Heaton.
The case is Merrill Lynch & Co vs. Deutsche Bank AG, New York State Supreme Court, No. 600661/2009.