McCann Sues Bank of America Seeking to Void Non-Compete Clause

Former Merrill Lynch & Co. brokerage head Robert McCann sued Bank of America Corp. to force the company to release him from exit terms that keep him from taking another job.

Bank of America fired him without cause after rejecting his resignation, making the Charlotte, North Carolina-based company unable to enforce a non-compete clause, McCann said in a suit filed yesterday in New York State Supreme Court.

McCann, 51, announced plans to leave Bank of America in January, less than a week after the company completed its $18.5 billion acquisition of Merrill Lynch. He said in the suit that he left for “good reason” after his role was “severely diminished” and he didn’t get a bonus following the sale. After initially saying McCann’s resignation would be effective in July, the bank fired him in February, according to the suit.

UBS AG, Switzerland’s largest bank, was close to hiring McCann as head of its wealth management unit in the Americas, the Financial Times said this month. The newspaper also reported McCann’s suit yesterday.

Bank of America spokesman Scott Silvestri declined to comment on the suit. UBS spokesman Mark Arena didn’t return a call for comment.

McCann said in his lawsuit that Bank of America was required to buy his Merrill Lynch shares for more than $18 million after firing him and hasn’t done so.

He was named in 2003 to head the brokerage unit that Bank of America Chief Executive Officer Ken Lewis last year called Merrill Lynch’s “crown jewel.” Dan Sontag replaced McCann in January, and Sallie Krawcheck, who previously led Citigroup Inc.’s Smith Barney brokerage, took over for Sontag this month.

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