BOSTON -- Wellington Management Co. sued former client RJR Nabisco Inc. to keep RJR from interfering with Wellington's attempts to enforce a noncompete contract with Arnold Schneider.
Wellington attorneys said they filed the suit, in U.S. District Court in Boston, because they thought RJR was preparing a lawsuit against Wellington. As of May 29, RJR had filed no lawsuit, although the New York-based company continues to review its options, RJR spokeswoman Carol Makovich said.
Wellington spokeswoman Lisa Finkel said, "We're trying to clarify our rights in the matter and get in front of things."
A Massachusetts judge determined in February that Mr. Schneider, a former Wellington portfolio manager, violated his partnership agreement with Wellington when he took former Wellington clients with him to his new firm, Schneider Capital Management Inc. The judge ordered Mr. Schneider to give up clients RJR, Frank Russell Co. and Utah Retirement Systems.
Frank Russell and Utah have sued Wellington, claiming Wellington's lawsuit against Mr. Schneider interfered with their allocation of pension fund assets.
'The federal court in Philadelphia granted Russell a temporary reprieve from the Massachusetts ruling against Mr. Schneider, but federal court in Utah backed the Massachusetts decision.
CNF Transportation Inc. Retirement Plan, which had moved an undetermined domestic equity mandate to Schneider, has placed the money with Dodge & Cox, San Francisco, to avoid "being caught in the crossfire," said CNF spokesman James R. Allen.