Lawsuit: Mariner, American Century Made Secret ‘No Poach’ Deal

Mariner Wealth Advisors, American Century Investment Management and other financial firms based in the Kansas City area entered into an illegal, secret “no poach” agreement to suppress competition for and compensation paid to employees in the wealth management industry, according to a lawsuit recently filed by two financial professionals.

Mariner and American Century, along with affiliates, agreed not to recruit or hire each other’s employees, the putative antitrust class-action complaint alleges.

Senior executives at firms named in the complaint “boasted among themselves and to other defendants about the money they would save and did save through the unlawful agreement at the expense of their workers,” the suit alleges.

Mariner, in return for avoiding criminal prosecution, admitted last year that certain firms it’s affiliated with had agreed with a peer not to recruit or hire each other’s employees or otherwise compete for wealth management talent, and agreed to establish a $1 million fund to compensate victims, according to the lawsuit.

The pact lasted from March 2014, if not earlier, to March 2018, but wealth management professionals associated with Mariner didn’t learn about it until contacted by the victim compensation fund administrator in August 2023, the lawsuit contends.

American Century separately agreed to avoid criminal prosecution and pay $1.5 million to current and former employees for its involvement in a no-poach agreement, according to the lawsuit, which contends professionals associated with that firm didn’t find out for years either.

“This antitrust action concerns the rights of employees to free and fair markets,” according to the lawsuit, filed in U.S. District Court in Kansas states.

“For several years, defendants — comprising some of the top asset and wealth management companies in the country — conspired to refrain from competition when it came to hiring and recruiting each other’s employees,” the complaint alleges.

“By agreeing not to recruit and hire each other’s employees, defendants were able to pay their asset and wealth management professionals lower wages than would have prevailed in a competitive market and deprived such workers of job opportunities, experience and many other benefits that accompany professional mobility,” the complaint says.

By March 2014, if not earlier, the firms “explicitly agreed not to hire or recruit each other’s asset and wealth management professionals … so that (they) could artificially depress their own labor costs, thereby depriving workers of the compensation they would otherwise earn in a competitive marketplace,” according to the lawsuit.

The investment firms “expressly discussed this shared objective with each other,” it says.

The Justice Department pursued a criminal investigation against Mariner, finding the firm had violated the Sherman Antitrust Act and evidence of the alleged no-poach conspiracy, leading Mariner to enter into a non-prosecution agreement, or NPA, the lawsuit says.

Mariner admitted that affiliate Montage Investments and related entities, including Mariner Wealth Advisors (formerly known as Mariner Holdings LLC) and companies in which Montage or Mariner had at least a 50% ownership interest from March 2014 to March 2018, conspired to suppress competition by engaging in a bilateral no-poach agreement with a competitor, the lawsuit contends.

The NPA forbids Mariner from making public statements contradicting its acceptance of responsibility, the lawsuit states. Mariner also agreed to set up a $1 million victim compensation fund, which under the NPA doesn’t preclude victims from pursuing lawful claims against the firm or limit civil liability, according to the complaint.