Some Florida residents may remember BankUnited, a failed Florida bank that has now been acquired by a former owner of North Fork Bancorp. After selling North Fork to Capital One and apparently signing a non-compete agreement, the community banker acquired BankUnited and last year scooped up another small bank. That move, however, has led the community banker into significant legal trouble regarding alleged violation of the non-compete agreement set out by Capital One.
Violation of non-compete agreements are not often taken lightly by the companies that set them out, and this man is learning firsthand what happens when it appears you’re in violation of one of these agreements.
Capital One argues that the non-compete agreement was breached when the community banker purchased both BankUnited and Herald National Bank, a small New York lender. The company apparently began to place help-wanted ads for jobs in the same area in 2010. Capital One’s non-compete agreement stipulates that the community banker could not compete in banking for at least five years after signing the agreement in 2006.
While it may appear to some Florida residents that a violation of the non-compete agreement has been made in this case, it is also argued that the community banker has not yet taken part in any business practices that compete against Capital One. He has argued that he had only simply begun building the blocks for a re-entry into banking once the five-year agreement was up. It is also argued that Capital One’s non-compete agreement is vague and ambiguous. While it remains to be seen how the case will be decided, a trial date has been set for July 23.
Source: Crain’s New York Business, “Trial looms between North Fork’s Kanas and Capital One,” Aaron Elstein, May 8, 2012