Hiring experienced, top talent from the competition is nothing new, but the practice was taken to a new level when one bank set up a new division and hired 24 employees , nearly half of another bank’s unit , doing the same business.
Commercial Capital Bancorp, an Irvine-based savings bank with three offices in San Diego, last month hired James Daley to head up its newly established commercial banking division.
In a short time, Daley hired 23 additional staffers, all of them from his former employer , the financial services division of Comerica Bank in El Segundo.
In retaliation, Comerica, based in Detroit with one office in San Diego, filed a lawsuit in San Francisco Superior Court against Commercial Capital Bancorp for conspiring to misuse Comerica’s trade secrets and confidential customer information, and for raiding its work force.
Comerica also requested and was granted a temporary restraining order Aug. 1 by a San Francisco judge from “using, destroying, concealing and/or disclosing any of the Comerica Bank’s confidential, proprietary or trade secret information regarding Comerica’s customers and employees.”
Comerica spokeswoman Sharon McMurray said the bank took the action “to protect our rights.”
Stephen Gordon, the chief executive of Commercial Capital, which has about $5.3 billion in total assets, said stealing the trade secrets from Comerica is the furthest thing from what his bank intends to do.
“We have our own customer information and trade secrets. We don’t need theirs,” Gordon said.
Vince Siciliano, the chief executive for 1st Pacific Bank of San Diego, said the number of employees who moved was surprising and probably irked Comerica.
“That’s pretty impressive to get that many people to move,” Siciliano said. “I think (Comerica) feels illegally damaged by the hirings. But once the people are gone, the barn door has been open, and they’re gone.”
Such talent poaching is common, but it usually doesn’t occur on this scale, he said.
“It happens from time to time and especially when banks are starting up new divisions, and with new banks,” Siciliano said.
Earlier this year, Seacoast Commerce Bank in Chula Vista hired the entire four-person staff handling SBA loans formerly working at San Diego Community Bank, a rival bank in Chula Vista. San Diego Community did not file suit against Seacoast.
In July, Merrill Lynch filed suit against RBC Dain Rauscher when the latter brokerage hired a head broker and nine other employees formerly working at a Merrill office in San Diego for its La Jolla office. Merrill’s lawsuit, which was filed in July in U.S. District Court in San Diego, alleged misappropriation of trade secrets and violation of non-disclosure agreements.
Client Loss A Concern
While Comerica likely is angry over the loss of longtime employees, what is even more problematic is the loss of potential clients, Siciliano said.
He said he’s read one report where bankers are successful if they can lure about half their former customers to make the switch to a new bank. But the shift may be greater if a large part of an entire division switches over, he said.
Creating A New Division
Daley was hired July 20 as executive vice president and to head up Commercial Capital’s new commercial banking division and its corporate financial services group in Irvine.
Daley, a veteran banker and former Cabinet head under the late Gov. Ronald Reagan, had been Comerica’s corporate executive vice president and the head of its financial services division in El Segundo since Comerica acquired Imperial Bancorp in 2001. Comerica Bank has total assets of about $54.7 billion.
Comerica’s financial services division consisted of 58 people, meaning Daley was able to attract about 40 percent of his former staff.