According to The Wall Street Journal, the public may soon know the names of hundreds of top bankers at Merrill Lynch who received hefty bonuses prior to that company’s merger with Bank of America. Merrill Lynch paid out $3.6 billion in bonuses before it was rescued by its merger with Bank of America.
Bank of America, which has received tens of billions of dollars in taxpayer funds since that merger, recently tried to prevent the disclosure, claiming the banker’s names and salary data are protected by trade secret law. This argument was made in Bank of America’s legal action against New York Attorney General Andrew Cuomo, who requested the bankers’ names and salaries.
On March 18, a New York state judge denied the trade secret claim, saying:
“The record indicates that Bank of America has not taken the kind of measures to protect the secrecy of its employee-compensation information that one would expect it to have taken if this information were a trade secret.”
The judge found that the bankers were not legally required by their employers to keep their salary information secret.In a February 24th deposition, John Thain testified that he did not know of any policy that prevented Merrill Lynch employees from discussing their compensation, and that he knew that bankers routinely mention their compensation to external parties, such as headhunters.
A common measure required to protect trade secrets are legal contracts that prevent disclosures to outside parties. These contracts are called non-disclosure agreements (NDAs). Apparently, neither Bank of America or Merrill Lynch required their bankers to sign NDAs relating to their salaries.
To learn more about trade secret NDAs, please see this prior post.