The Delaware Court of Chancery has denied BankUnited’s motion seeking a preliminary injunction against several former high-ranking employees and their new employer, Customers Bank. The injunction aimed to stop the defendants from soliciting BankUnited’s employees and customers. Vice Chancellor David ruled that based on the evidence presented at a recent two-day hearing, BankUnited was unlikely to succeed on its underlying claims, which included breach of contract, breach of fiduciary duty, tortious interference, and aiding and abetting breach of fiduciary duty.
The Departure from BankUnited
The dispute centers on the exodus of key personnel from BankUnited’s National Title Solutions (NTS) division, which BankUnited, Inc. formed in 2023 to serve the title industry. Defendant Brett Shulick led this division as Executive Vice President and Managing Director. During his tenure, the NTS division grew significantly in clients, deposits, and profitability.
By the summer of 2025, Shulick, along with three senior vice presidents reporting to him—Magdalena Grochola, Anthony Kurche, and Kyle Harris—became dissatisfied with BankUnited’s technology, compensation structure, and senior leadership. They agreed to seek new opportunities together.
Shulick began discussions with Customers Bank, a “branch-light” institution looking to build a similar title solutions business. These discussions, which involved Shulick creating a proposed budget for the new division that included migrating BankUnited employees and their projected salaries, took place in June and July 2025.
Crucially, Customers Bank inquired about any non-solicitation agreements the departing executives might have. Shulick and the others consulted outside counsel and reviewed documents like the Code of Conduct and Employee Handbook, finding no mention of non-solicitation clauses. They eventually accepted offers from Customers Bank in early August, resigning en masse on Friday, August 15, 2025.
That same weekend, Customers Bank actively recruited 15 employees from BankUnited’s NTS division, ultimately securing 11 who accepted offers to join the new venture. BankUnited alleges that immediately following their resignations, the former executives began aggressively targeting BankUnited’s clients.
The Contractual Dispute: Code of Conduct vs. Award Agreements
BankUnited sought to enforce non-solicitation restrictions based on two sets of documents: the Code of Conduct and certain equity award agreements.
The Court swiftly dismissed the Code of Conduct argument. Vice Chancellor David noted that Delaware law generally holds that employee handbooks or codes of conduct do not create enforceable contracts unless employment is for a definite term. Furthermore, BankUnited’s own Code of Conduct explicitly stated it was “not intended to and does not create any obligations to or rights in any employee.” Therefore, this basis for relief was rejected.
The more complex issue involved the Restricted Stock Unit (RSU) and Restricted Stock Award (RSA) agreements (collectively, the “Award Agreements”). BankUnited claimed these agreements, accepted annually when equity awards were granted, contained both employee and customer non-solicitation provisions lasting for one year post-employment.
The Individual Defendants argued they never assented to these terms, claiming the online portal through Merrill Lynch, where they clicked “accept,” did not allow them to review the agreements beforehand. While the Court found evidence suggesting the portal *did* require viewing the documents, making it likely BankUnited could prove assent, the Court ultimately found the restrictions themselves unenforceable due to overbreadth.
Overbroad Restrictions Doomed the Contract Claims
Delaware courts scrutinize non-solicitation covenants to ensure they are reasonable in scope and duration and advance legitimate business interests. The Court found the provisions in the Award Agreements failed this test decisively:
1. Customer Non-Solicitation: This clause barred contact with any BankUnited client the employee “received information about” during the two years prior to departure. Because the executives received daily reports listing over 4,500 entries (including about 1,200 “households”), BankUnited argued the restriction covered thousands of clients, many with whom the executives had zero interaction. The Court deemed this “vastly overbroad,” noting that preventing solicitation of clients a person never met does not protect a legitimate goodwill interest. The provision also covered “prospective” customers and prohibited even an “attempt” to contact, which the Court found unreasonable.
2. Employee Non-Solicitation: This clause banned soliciting, inducing, or even “encouraging” any employee to leave. The Court cited recent precedent indicating that a ban on “encouragement” is facially overbroad as it restricts non-competitive speech unrelated to unfair competition.
Because both provisions were deemed unenforceable, BankUnited was unlikely to succeed on its breach of contract claim.
No Evidence of Fiduciary Breach
BankUnited also alleged the Individual Defendants breached fiduciary duties by soliciting customers and misappropriating confidential data. The Court questioned whether all defendants, except perhaps Shulick, qualified as “key managerial personnel” who owe such duties.
Even assuming Shulick owed a duty, the Court found no evidence of a breach. Under agency law, an agent can make preparations to compete before leaving, provided they act fairly. The evidence showed:
* The four leaders decided to leave together; Shulick did not solicit them to breach their duties.
* Shulick accessed the crucial “PRC Householding report” the day he resigned, but credibly testified it was only to prepare for a routine status meeting, not to download or copy data.
* The budget Shulick created for Customers Bank used publicly available data (employee names, RSU vesting schedules) and was based on projections, not confidential compensation figures.
* Client contact lists found on the defendants’ phones were minimal, undermining claims of systematic data theft.
Consequently, the fiduciary duty claim against the executives was unlikely to succeed.
Claims Against Customers Bank Fail
Since BankUnited could not establish enforceable contracts or breaches of fiduciary duty by the employees, the derivative claims against Customers Bank—tortious interference with contract and aiding and abetting breach of fiduciary duty—were also deemed unlikely to prevail.
Because BankUnited failed the first element of the preliminary injunction standard—reasonable probability of success on the merits—the Court denied the motion entirely and dissolved the previously issued Temporary Restraining Order (TRO).