Empower reaches tentative deal with 13 ex-advisors it sued for poaching

Empower has reached a settlement agreement with 13 advisors who left the firm to create a competing advisory business.

In a federal lawsuit filed March 13 in Colorado, Empower accused the firm, known as Atomi Financial, of misappropriating its trade secrets and using the trade secrets to steal its clients. Atomi does business as Compound Planning, with offices in San Francisco and New York.

"Instead of competing for clients fairly and honestly in the marketplace, Compound Planning chooses to poach employees and clients from its competitors, like Empower, by inducing its competitors’ employees to misappropriate trade secrets and engage in other unlawful conduct," the Empower lawsuit reads. "Publicly, Compound Planning has also relied upon a comparative advertising strategy that inaccurately and falsely misrepresents the services and products of its competitors, including those of Empower."

A motion filed Tuesday asks the court for a preliminary injunction and outlines the terms of a settlement.

Part of Great-West Life of Winnipeg, Manitoba, Empower dates its U.S. business to 1906. The "modern iteration" of Empower began doing business in 2014, according to its website, and an aggressive growth plan followed with multiple significant acquisitions. In 2020, Empower paid $1 billion for Personal Capital, a robo-advisor with $13 billion in assets.

Empower is the second-largest retirement plan provider in the United States and serves more than 17 million individuals and over 69,000 different organizations.

According to the lawsuit, the 13 defendants were employed by Personal Capital when Empower bought the company. Compound Planning "induced these employees to misappropriate Empower’s trade secret customer list and to divert Empower’s clients to Compound, all in the name of turning a profit."

No soliciting

The proposed settlement prohibits the defendants from "soliciting any business from, or initiating any further contact or communication with, any Empower client whom any of the Advisor Defendants serviced while employed by Empower, or who was a prospective client of Empower within the six-month period prior to a Party’s resignation from Empower."

The proposed settlement further restricts the 13 former employees from using any trademarks belonging to Personal Capital or Empower.

"Until such time as the parties agree otherwise in writing, or until such time as the Court rules otherwise, Compound Planning shall remove all references to Empower and/or Personal Compound from its website and/or any other marketing or public-facing materials, including any comparative advertising," the proposed settlement reads.

The settlement proposal does not include any admission of wrongdoing.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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