Olshan Prevails in Hard Fought Broker Dealer Restrictive Covenant FINRA Litigation
In September 2013, a prominent broker dealer consulted Olshan’s Employment Practices Group about hiring a senior executive then employed at a major consulting firm used by many large banks. The broker dealer planned to use the executive’s talents to found its own consulting business. The executive was hired, along with several other junior employees, and the client launched a now successful business. The former employer responded with aggressive litigation in the Commercial Part of the New York County Supreme Court and before FINRA Arbitration, claiming breach of the employees’ restrictive covenants including non-solicitation and non-hiring covenants, and raiding. Olshan obtained an order from the Appellate Division, First Department, halting discovery in the Commercial Part action. Olshan also prevailed in a separate proceeding in the Commercial Part, staying perhaps the largest claim in the arbitration. This stay prevented the FINRA Arbitration from growing even more protracted. Olshan’s employment litigators filed counterclaims in the FINRA Arbitration on behalf of three former employees relating to the consulting firm’s failure to pay them wages and bonuses. After more than 14 hearing days before FINRA, between October 2015 and February 2016, the verdict was a resounding victory for Olshan’s clients. The FINRA Arbitration panel dismissed all claims brought by the former employer and awarded substantial damages to the three individual defendants on their wage claims. Olshan accomplished all of this efficiently with a trial team of two attorneys, with Litigation Department Chair Thomas Fleming taking the lead, while the former employer routinely used five or more attorneys at trial.
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