Identity of Fidelity clients considered 'confidential information'.


Byline: Eric T. Berkman

A financial consultant who allegedly compiled a list of his former clients from memory after leaving the company to join a competitor could be considered to have used confidential information, a Superior Court judge has found.

Defendant Devin Callinan, who had left plaintiff Fidelity Investments for a job with defendant UBS Financial Services, argued that information he had retained in his head as opposed to a hard-copy or electronic list that he took with him did not constitute confidential information under his non-solicitation and confidentiality agreement with Fidelity.

But Judge Brian A. Davis, sitting in the Business Litigation Session, disagreed.

"The manner in which confidential information is retained by a former employee does not affect whether the information itself is, in fact, confidential," Judge Brian A. Davis wrote, granting Fidelity's motion for preliminary injunctive relief. "If the identity of Fidelity's clients constitutes 'Confidential Information' when the information is embodied in written form, such as a customer list, it remains confidential when it resides in the memory of a former employee, such as Mr. Callinan."

Meanwhile, Davis declined to revisit Smith Barney v. Griffin, a 2008 decision in which then-Superior Court Judge Ralph D. Gants announced a rule that departing financial counselors can inform clients they are leaving, where they are going, and the services they plan to provide. Davis rejected Fidelity's argument that such a rule was no longer necessary given how easily clients can find a departed counselor through an online search.

Still, Davis found, Callinan's telephone contact with former clients, which in some instances allegedly included a sales pitch for UBS, exceeded the simple written announcement contemplated by Griffin.

The 12-page decision is Fidelity Brokerage Services LLC v. Callinan, et al., Lawyers Weekly No. 09-021-19. The full text of the ruling can be found here.

Unsurprising result

The lawyers for Fidelity, Callinan and UBS could not be reached for comment before deadline.

But John R. Bauer, a Boston attorney who handles non-solicitation and non-disclosure cases, said the decision did not surprise him.

"I would expect most judges to find that the client list used by the employee constitutes protectable confidential information," Bauer said. "The list is not made public or easily ascertainable."

At the same time, Bauer said, if the court intended to rely on the...

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