Cloud-banking vendor nCino settles 'no-poaching' antitrust claims (updated)

nCino

29/08/2023 19:55

(Updates with comment from nCino)
    By Mike Scarcella
       Aug 29 (Reuters) - Cloud-banking software company nCino
 NCNO.O  has agreed to pay $2.2 million to resolve claims that
it conspired with other financial technology companies to
restrict employee hiring in violation of U.S. antitrust law.
    Plaintiffs' lawyers who sued nCino and the other defendants,
Live Oak Bancshares and Apiture, filed the proposed settlement
in a Wilmington, North Carolina, federal court on Monday.
    The deal was the third and final one reached in the case,
and it will require approval from Chief U.S. District Judge
Richard Myers II, who is presiding over the litigation.
    Myers last year approved the plaintiffs' settlements with
Live Oak and Apiture. Live Oak paid about $3.9 million, and
Apiture paid about $777,200.
    The case was filed in 2021 amid a wave of private and
federal antitrust actions challenging restrictive "no poach"
employment practices that critics contend stifle competition and
suppress wages.
    The U.S. Justice Department closed a criminal investigation
of nCino's employment practices without an indictment, the
plaintiffs' attorneys said in Monday's filing.
    A spokesperson for the Justice Department declined to
comment.
    nCino, Live Oak and Apiture did not admit liability in
settling the plaintiffs' claims.
    In a filing on Tuesday, nCino said it "strongly believes
that it would prevail on the merits" of the plaintiffs' claims
and has agreed to settle "to avoid the distraction and expense
of protracted litigation," among other considerations.
    A spokesperson for nCino referred to the company's court
filing.
    As part of the first two deals, Live Oak and Apiture said
they would cooperate with the plaintiffs' lawyers in the case
against nCino.
    In June, Wilmington-based nCino had a market value of about
$3.6 billion. The company, spun from Live Oak in 2011, provides
cloud software to banks and financial institutions to aid
processes including lending and deposits. nCino has attracted
takeover interest, Reuters has reported.
    The settlement class includes nearly 2,000 employees who
worked for nCino, Live Oak or Apiture between early 2017 and
March 2021.
    "The express purpose of the no-hire agreement was to prevent
the companies from having to pay competitive wages to attract
and retain talent," the plaintiffs' attorneys said in Monday's
filing.
    The attorneys called the nCino settlement "a strong result
when weighed against the risks of further litigation."
    Myers last year awarded $1.2 million in fees to the
plaintiffs lawyers after the first two settlements. 
    
    The case is Joseph McAlear v. nCino Inc, U.S. District
Court, Eastern District of North Carolina, 7:21-cv-00047-M.
    For McAlear: Robert Elliot and Daniel Lyon of Elliot Morgan
Parsonage; Dean Harvey and Anne Shaver of Lieff Cabraser Heimann
& Bernstein
    For nCino: David Zinn and Jonathan Pitt of Williams &
Connolly 
    
    Read more:
    McDonald's must face antitrust claims over worker
'poaching,' court rules
    High-fashion workers' bid to revive antitrust lawsuit gets
US Justice Dept, state AG support
    After DOJ antitrust losses in employment trials, defense
lawyers urge 'rethink'

 (Reporting by Mike Scarcella; editing by Leigh Jones)
 ((Mike.Scarcella@thomsonreuters.com;))