Simmons Bank sues former employees and rival bank

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By Ray King

More than two dozen former employees of Simmons Bank and Simmons First National Corporation have been accused of taking Simmons trade secrets and confidential information to the Little Rock based bank where they now work.

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In addition, a lawsuit filed in Jefferson County Circuit Court accuses the employees of taking Simmons customers and employees to their new employer.

Named in the lawsuit are Encore Bank, an Arkansas banking company based in Little Rock who currently employs the other individual defendants, some in executive and senior level positions, including many who worked for Simmons.

Those employees include Chris Roberts, who is Chairman and CEO of Encore Bank and was formerly Executive Vice President in the Private Banking Department at Simmons; Jimmy Burton Hicks, a former Vice-President of Mortgage Lending in the Simmons Mortgage Lending Department and currently holds the position of President and Chief Strategy and Growth Officer at Encore: Phillip Jett, who currently holds the position of Senior Vice-Chairman and President of Encore; Justin Moore, who was formerly Manager of Mortgage Lending in the Mortgage Lending Department of Simmons and holds the position of Executive Vice-President Director Mortgage Banking at Encore: and Karla Dial, a former Director of Operations in the Operations Department of Simmons. Dial left Simmons on April 30 and prior to that, had accepted a position at Encore Bank where she is Senior Vice-President and Deposit Operations Manager. All five of those individuals live in Arkansas. The complaint does not list Jett as a former employee of Simmons.

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Also named were Craig Caldwell, a former Commercial Banker II in the Equipment Financing Department of Simmons who lives in Tarrant County, Texas and is currently Executive Vice-President Director of Specialty Finance at Encore; Melvin Doug Parker, a former Regional Community President Simmons’ Southwest Missouri Region in the Chief Banking Department at Simmons. He currently holds the position of Executive Vice-President and Southwest Missouri Regional President at Encore and lives in Greene County, Missouri; Stacy McCann, a former Senior Loan Processor in the Mortgage Department at Simmons. McCann lives in Washington County, Arkansas and holds the position of Senor Mortgage Loan Specialist at Encore; Mary Frosto, a former Senior Vice-President in the SBA Funding Department at Simmons who lives in Tarrant County, Texas and holds the position of Senior Vice-President in the SBA Funding Department at Encore; Julie Fuller Jones, a former Regional SBA Banker in the SBA Lending Department at Simmons and currently holds the position of Executive Vice-President and Director of SBA Lending at Encore. She lives in Dallas, County Texas; and Mark Yeager, a former Commercial Banker Ii in the Equipment Financing Department at Simmons. Yeager, who lives in Tarrant County, Texas, holds the position of Senior Vice-President at Encore.

An additional 15 defendants, listed as John Does 1-15 are former Simmons employees who work for Encore or are not former employees of Simmons who work for Encore and participated and continue to participate in the “wrongful acts” of (the defendants).

According to the lawsuit, “the banking industry has and continues to experience extreme competition in markets served. Simmons reasonably minimizes unfair competition by contractually prohibiting certain employees who leave its employment from soliciting other Simmons’ employees or Simmons’ customers, and from divulging, taking and using Simmons’ trade secrets and other intellectual, confidential and proprietary information and property, including the violation of such contracts and the use of such information in the taking of customers.”

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The complaint goes on to say that Simmons devoted time, expenses and resources in recruiting employing and training personnel and special knowledge the employees learned on the job are “considered to be proprietary and included in the definition of Simmons’ Trade Secrets and Confidential and Proprietary Information and Property.”

Each of the listed defendants received stock options and bank shares under the company’s Incentive Plan and signed agreements promising not to divulge confidential information for at least one year and will not allow use or disclose confidential information which would allow others to solicit Simmons’s customers.

There is also a provision that bars employees who leave the bank from trying to get other bank employees to leave their jobs at Simmons’ for a job with a competing bank but the complaint alleges that at least 15 people who worked at Simmons were approached about jobs with Encore Bank.

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The lawsuit, filed by KUTAK ROCK LLP of Little Rock seeks compensatory and punitive damages, attorney fees, expert witness fees and costs.