Mariner Wealth Advisors and several other financial services firms based in the greater Kansas City area have agreed to a $25.5 million settlement fund to pay members of a class-action suit in which they claim the firms conspired to not hire each other's advisors and other staff in order to stifle pay.
The proposed settlement would end an antitrust suit brought in February 2024 by Jakob Tobler and Michelle McNitt, which alleges Mariner, American Century and Tortoise Capital conspired "to suppress and eliminate competition in the labor market by agreeing not to solicit, recruit or hire each other’s employees."
Tobler and McNitt, both former employees of Mariner, asserted claims on behalf of themselves and roughly 5,000 former and current employees of the group of wealth and asset management firms.
The plaintiffs alleged that because of the defendants’ misconduct, plaintiffs’ and the class members’ compensation "was artificially deflated and lower than what their wages should have been in a competitive marketplace."
For several years, Tobler and McNitt said in their original complaint, the "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" and "secretly agreed to restrict, suppress and eliminate their competition in the recruitment and hiring of asset and wealth management professionals and other skilled workers."
The firms "entered into this agreement for one clear and overarching reason —so they could pay these highly-skilled employees less than they would be paid in a competitive market," the suit contends.
Mariner declined to comment on the proposed class-action settlement.
American Century said in a statement shared with ThinkAdvisor that “civil litigation commonly follows government enforcement actions, and with this class settlement, we are glad to be in the process of resolving this matter. American Century remains committed to fair and honest competition in compliance with all laws and regulations.”
According to the settlement, "through non-prosecution agreements with the Department of Justice, Montage and its related entities (including the company formerly known as Mariner Holdings, LLC, as well as companies in which Montage Investments, LLC or Mariner Holdings, LLC had a direct or indirect ownership interest of greater than or equal to 50%) and ACI admitted that, beginning no later than March 2014 and continuing until March 2018, they conspired to suppress and eliminate competition by entering into and managing a bilateral market allocation agreement not to solicit, recruit, hire, or otherwise compete for each other’s employees," in violation of Section 1 of the Sherman Act.
They also admitted that their "No Poach Agreement diminished employee mobility between Mariner and American Century defendants, and in that manner, limited the opportunities of employees to negotiate for better compensation, benefits, and other terms of employment," the settlement states.
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