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.
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.
