Simmons Calls Encore Into Court Over Non-competes


Simmons Calls Encore Into Court Over Non-competes
Chris Roberts, left, Phillip Jett and Burt Hicks, executives at Encore Bank in Little Rock, are named in a Simmons Bank lawsuit. (Karen E. Segrave)

Simmons Bank hauled Encore Bank into court last week over accusations that include improperly luring executives and customers away from the Pine Bluff bank.

Simmons and its parent company, Simmons First National Corp., filed the lawsuit in Jefferson County Circuit Court and named several former executives who left Simmons for Encore Bank of Little Rock.

About a dozen bank officers were named as defendants in the 64-page complaint, including Chris Roberts, Encore’s chairman and CEO; Burt Hicks, senior executive vice president and chief operating officer; and Phillip Jett, vice chairman and president. Other defendants are expected to be named later.

Simmons said in the lawsuit that it tries to reduce unfair competition by awarding certain employees company shares if they agree to wait a year after leaving before trying to woo away other Simmons employees or its customers. Ex-employees are also contractually prohibited from leaking or using Simmons’ trade secrets or other related information for five years or until the information enters the public domain.

Simmons alleges that the defendants breached their contractual duties owed to the bank by trying to move Simmons’ customers to Encore. The defendants also allegedly targeted Simmons employees and tried to get them to jump to Encore.

Simmons also accused some defendants of spilling Simmons’ trade secrets and other confidential and proprietary information.

“Defendants’ intentional and improper actions have and will continue to result in damage and loss to Simmons,” the suit said.

Enforcement

Simmons wants a judge to say that the employment agreements several of the defendants signed are enforceable.

It also is seeking damages that include breach of contract and tortious interference with contractual relationships and business expectations.

“Encore was aware or should have been aware of the subject agreements between Simmons and the individual Defendants,” Simmons said in the lawsuit, which was filed by attorneys at the Little Rock office of Kutak Rock LLP.

The lawsuit also said that Jett was aware of or should have known about the agreements Simmons had with its employees. But he and Encore encouraged several of the defendants to breach their agreements by instructing them to “lead Encore’s efforts to expand its business, remove, take and use Simmons Trade Secrets and Confidential and Proprietary Information and Property, and then hiring in rapid succession many Simmons employees and in turn solicit Simmons’ customers, many if not all of which the Defendants had solicited,” the suit said.

The defendants’ “actions were intended to, and did, interfere with and disrupt Simmons contractual relationships, business relationship and expectancy with its employees and customers,” the suit said.

Simmons said that unless all of the defendants are stopped from committing the alleged misconduct, “Simmons will be irreparably harmed.”

Strenuous Denial

Encore “strenuously” denies Simmons’ allegations, Encore’s attorney, Patrick James of James House Downing & Lueken of Little Rock, told Whispers last week.

James said the mass exodus of Simmons’ employees during the past few years wasn’t caused by Encore, but from “widespread discontent among Simmons Bank’s employees.

“These individuals left Simmons to go to a multitude of other employers, some of which Simmons Bank has also sued or threatened to sue,” he said.

As of Sept. 30, Simmons’ total assets were $21 billion, while Encore’s were $584 million.

“While Encore Bank does not have the size and resources of Simmons Bank, it will nevertheless vigorously defend its reputation and business practices,” James said. “Encore Bank is confident that when all facts are revealed this lawsuit will be seen for what it is: an effort by Simmons Bank to suppress fair and open competition in the state of Arkansas.”


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