Claimant Merrill Lynch sought a Permanent Injunction enjoining Respondent Connell from using client contact information and other data, and destroying certain records and documents purportedly in his possession. Claimant also sought an Order for the return of certain cited documents, particularly data stored on computers and storage devices.
In addition to unspecificed compensatory damages and attorneys' fees, Claimant sought payment of an outstanding Promissory Note executed by Respondent in the amount of at least $3.285 million plus interest accumulating at the rate of $220.52 per day since July 27, 2010.
Respondent generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim in which, among other causes of action, he asserted breach of contract, fraud in the inducement, defamation, and tortious interference with contracts and/or business relationships.
Comin' Out Swingin'
In his Counterclaim, Respondent requested $3.2 million in transition compensation; $950,000 that represented the first-year back-end compensation; and $4.6 million in back-end compensation that would have been due during years two through five; $26 million in lost commission for the next 14 years of intended employment. Moreover, Respondent sought interest on all amounts, expungement of his Form U5, punitive damages, attorneys' fee, and costs.
The FINRA Arbitration Panel denied Claimant Merrill Lynch's claims.
However, the Panel wasn't done - not by a long shot.
The Panel found Claimant Merrill Lynch liable to and ordered it to pay to Respondent Connell:
- $476,500 in compensatory damages
- $288,734 in attorneys' fees pursuant to the parties' contractual agreements
- $22,408.67 in costs.
The August 26, 2010 Permanent Injunction entered by the FINRA Panel in favor of Claimant was modified as follows:
- Claimant shall deliver within 30 calendar days the "Connell Proprietary Excel Spreadsheet and MS Word Templates" without any data; and upon said deliver, Claimant will cease using that product (and scrub it from all Claimant's computers and storage devices) and will so certify to Respondent.
- Within 10-days of the Award, Claimant will return to Respondent his personal computers and portable electronic devices but will all data scrubbed.
- In January 2011, the FINRA Panel ordered that Claimant Merrill Lynch could retain not more than $1.2 million in cash and a further $2.55 million in assets pending the Award. In its Decision, the Panel removed all restrictions on Respondent's personal accounts and ruled that Respondent Connell is entitled to retain $3.285,228.26 paid to him by Claimant.
- Respondent's request for expungement is denied
Bill Singer's Comment: Talk about your battle of industry employment law Titans! I would have loved to have been a fly on the wall during this FINRA arbitration.
Without a doubt, both parties got their money's worth when it came to lawyering up. This must have been a slugfest from the opening bell until the final round.
Claimant Merrill Lynch was represented by its go-to outside law firm in these matters, Rubin Fortunato & Harbison, P.C., of Paoli, PA. The opening paragraph on that high-powered firm's website says it all:
Rubin Fortunato is a law firm wholly dedicated to one focus: Employment Law. We built a strong reputation representing employers nationwide in high stakes litigation relating to non-compete restrictions and other restrictive covenants.
Respondent Connell was represented by Thomas Bedford Lewis, Esq. of Stark & Stark of Lawrenceville, NJ. The introduction to his online bio states:
Thomas B. Lewis is a Shareholder and member of Stark & Stark's Litigation Group and is Chair of the firm's Employment Group. Mr. Lewis practices in the area of corporate litigation, with an emphasis on employment trial litigation, arbitration, mediation and employment counseling.
Mr. Lewis represents companies and their executives in employment disputes and litigation including restrictive covenant issues, non-compete agreements, claims of sexual harassment, workplace discrimination, wrongful discharge, employment agreements, and severance agreements . . .