According to Reuters, Capital One Financial Corporation recently filed a suit in U.S. District Court for the Eastern District of Virginia against its former CEO John Kansas for breaching a non-compete agreement. The lawsuit was filed last Thursday.
In its filing, Capital One alleges that Kansas had, upon ending his employment with the company back in August 2007, signed a non-compete agreement spanning the New York, Connecticut, and New Jersey area until 2012. At present, Kansas is the CEO of Bank United Incorporated. The suit also named John Bohlsen, who had been the head of Capital One's commercial banking business.
Capital One's lawsuit relates particularly to Bank United's agreement to purchase a small New York lender by the name of Herald National back in June. Other actions, however, are also part of the suit. Doing so was apparently a violation of the non-compete agreement. Bohlsen is currently the vice chairman and chief lending officer for BankUnited.
According to a spokesman for Capital One said both Kansas and Bohlsen had "received compensation" in exchange for the non-compete agreements. Sources said Mr. Kansas denies that he has violated the non-compete agreement.
Different states have different rules regarding the enforcement of non-compete agreements. Most states will recognize and enforce different forms of non-compete agreements. In Virginia, for instance, non-compete agreements are generally not favored, and must be narrowly drafted and not offend public policy in order to be upheld. In D.C., covenants not to compete must be necessary to protect the employer's business interest, not prevent the employee from earning a living, must be clear and unambiguous, and meet a number of other parameters to be considered reasonable.
Source: Reuters, "Capital One sues former executive," 15 July 2011.