Home » Employee Issues » Access to Client Lists May Warrant Litigation Over Noncompete and Nonsolicitation Agreements

Access to Client Lists May Warrant Litigation Over Noncompete and Nonsolicitation Agreements

With increasing job mobility, lower profit margins and heightened competition, and the ease of access to confidential information, more companies across various industries require their employees to execute non-compete and/or non-solicitation agreements. Employees may still retain the ability to move jobs but they may be restricted in their performance of those new positions, particularly when moving to a competitor in the industry.

On April 13, 2015, Citibank initiated litigation in New York to prevent a former vice president of its private banking division, Citi Private Bank, from using its client information to solicit business in his new position with one of its direct competitors. Citibank argues in its lawsuit that the former vice president, Mourra, is improperly utilizing confidential information, namely client lists and contact information, to reach former clients and solicit them to move their business to his new company. In this case, the conduct allegedly runs afoul of a one-year non-solicitation clause and a confidentiality provision in his employment agreement with Citibank. As is typical of most litigation over non-compete and non-solicitation agreements, Citibank initially seeks an injunction preventing Mourra from communicating with his former clients and using Citibank’s confidential information.

As part of its effort to prevent Mourra from soliciting former clients, Citibank makes a point of alleging that he did not originate any of the former clients himself. Instead, as Citibank claims, the 49 families with about $5.7 billion in assets under management either had existing relationships with Citibank or were originated by other employees and serviced by Mourra. The point is, none of the clients were actually his individual clients and the only way he had any contact with them was due to his employment with Citibank. As such, the argument goes, the information was confidential to Citibank, was only available to Mourra because of his employment with Citibank, and could not be properly used by Mourra in his new position with a direct competitor.

Employers and employees alike must remain sensitive to non-compete and non-solicitation issues, especially in an era of increasing job mobility and heightened competition for often limited or finite business resources. And customer or client lists may be of sufficient value – in this case $5.7 billion in assets – to warrant litigation.

Citibank NA v. Mourra, Case No. 651215/2015 (Sup. Ct. NY)


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