A lawsuit has been filed against Encore Bank and a number of affiliated individuals in Jefferson County Circuit Court by Simmons Bank, headquartered in Pine Bluff, for declaratory judgment, alleging breach of contract, tortious interference with Simmons' business expectancies based on improper use and disclosure of Simmons trade secrets, misappropriation of trade secrets, conversion theft and misappropriation of Simmons' property, unlawful aiding and abetting, deceptive trade practices, breach of fiduciary duty and civil conspiracy.
In court documents obtained by the Pine Bluff Commercial, the 64-page document details how former employees of Simmons Bank, now employed with Encore Bank, are alleged to have participated in wrongful acts.
Simmons says special knowledge and skills that a Simmons' employee learned on the job at Simmons are considered proprietary and included in the definition of Simmons trade secrets and confidential and proprietary information and property.
Simmons alleges that the defendants for their own pecuniary gain, individually, collectively, and with the knowledge, support and authority of Encore, breached or violated duties and obligations owed to Simmons under various agreements or by virtue of statute or common law.
Encore is an Arkansas banking company with its principal place of business located in Little Rock. Encore currently employs all of the individual defendants, including some in executive and senior-level roles.
According to Simmons Bank, 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.
The court documents break down each defendant's alleged contractual obligations to Simmons Bank.
Those defendants include Chris Roberts, chairman and CEO of Encore Bank and former executive vice president in the private banking department at Simmons; Jimmy Burton Hicks, president and chief strategy and growth officer at Encore and former vice president of mortgage lending in the Simmons mortgage lending department; Phillip Jett, senior vice Chairman and president of Encore; Justin Moore, executive vice president director mortgage banking at Encore and former manager of mortgage lending in the mortgage lending department of Simmons; and Karla Dial, Encore Bank senior vice president and deposit operations manager and former director of operations in the operations department of Simmons.
Also Craig Caldwell, executive vice president director of specialty finance at Encore and former commercial banker II in the equipment financing department of Simmons; Melvin Doug Parker, executive vice president and southwest Missouri regional president at Encore and a former regional community president in Simmons' southwest Missouri region in the chief banking department at Simmons; Stacy McCann, senior mortgage loan specialist at Encore and former senior loan processor in the mortgage department at Simmons; Mary Frosto, senior vice president in the SBA funding department at Encore and former senior vice president in the SBA funding department at Simmons; Julie Fuller Jones, executive vice president and director of SBA lending at Encore and former regional SBA banker in the SBA lending department at Simmons; and Mark Yeager, senior vice president at Encore and a former commercial banker in the equipment financing department at Simmons.
Simmons court documents say the defendants breached the duties and committed the unlawful torts and violations of the applicable law and statute naming some of the defendants directly soliciting or taking actions to assist themselves and Encore in and interfering with Simmons customers and the taking of Simmons customers; directly soliciting or taking actions to assist themselves and Encore in soliciting or interfering with Simmons employees or to otherwise terminate employment with Simmons; individually and on behalf of Encore and with the full knowledge and authority of Encore taking, using and divulging Simmons trade secrets and confidential and proprietary information and property to the detriment of Simmons.
The lawsuit alleges that Encore unlawfully solicited the following Simmons mortgage loan department employees to leave Simmons and to become employed in the mortgage loan department of Encore. The dates indicate when each employee left Simmons.
• Sept. 27, 2019, Stacey McCann.
• Nov. 5, 2019, Julie Mott.
• March 6, 2020, Jessie Williamson.
• April 4, 2020, Mandy Hawthorne.
• April 4, 2020, Jerry Despain.
• Oct. 29, 2020, Brock Wisenhunt.
The court documents say that Caldwell, while still employed at Simmons and with the full knowledge and authority of Encore -- Roberts; Hicks; Jett; and a yet to be named defendant -- also took with him to his employment at Encore at least four large boxes of Simmons trade secrets, and confidential and proprietary information and property belonging to Simmons as "prohibited by the Caldwell RSU Grant(s) and by statute and common law."
Documents also allege that before leaving Simmons' employment and after accepting employment at Encore, McCann electronically forwarded to her own email account various tranches of Simmons trade secrets and confidential and proprietary information, including proprietary Simmons forms and checklists, to be used in her new job at Encore. Simmons alleges that this occurred on Sept. 16, 2019, or approximately two weeks before McCann left Simmons' employment for her new job at Encore.
The court documents include private texts and emails reportedly sent between the defendants, including one from Frosto. Documents allege that before leaving Simmons for Encore, Frosto on several occasions forwarded to her personal email account Simmons business-related emails, and in the process transferred numerous tranches containing sensitive Simmons business and proprietary information, including customer names, loan amounts, loan and related documents, and Simmons policies.
The court documents allege that Frosto admitted this conduct in one instance by stating in an email: "so now it's not Simmons' anymore, I corrected an item...so now it's mine; and of course I changed the heading...LOL. Call me & I can walk you through it...as you should need... PS>>>>Please DELETE this email & DELETE AGAIN, so you and I won't get into any trouble."
The suit seeks a declaratory judgment, and alleges breach of contract; tortious interference with contractual relationships and business expectancies; misappropriation of trade secrets and confidential information; conversion, theft and misappropriation; aiding and abetting; violation of the Arkansas Deceptive Trade Practices Act; breach of Fiduciary duty and duty of loyalty; and civil conspiracy.
