Centennial Bank files federal lawsuit against former employees in Lubbock area

Centennial Bank, which took over Happy State Bank in 2022, has filed a federal lawsuit against...
Centennial Bank, which took over Happy State Bank in 2022, has filed a federal lawsuit against 16 former employees in the Lubbock area.(kfda)
Published: May. 1, 2023 at 7:25 PM CDT
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LUBBOCK, Texas (KCBD) - Centennial Bank, which took over Happy State Bank in 2022, has filed a federal lawsuit against 16 former employees in the Lubbock area.

The lawsuit claims the employees “pilfered trade secrets and committed computer fraud” before leaving the company and taking jobs at branches of American State bank located in Lubbock, Plainview and Amarillo, according to a release.

Of the 16 defendants, 12 are being represented by Schiffer Hicks Johnson out of Houston.

The firm has released the following statement:

Financial giant Centennial Bank has filed a bogus federal lawsuit as a “vehicle for retribution” to punish 16 former officers and employees for exercising their right to take jobs with a small-town rival that features a more personal corporate culture, says a motion filed today in Lubbock federal court.

The motion — filed by the Houston law firm Schiffer Hicks Johnson (SHJ) on behalf of 12 or the 16 former Centennial officers and employees — asks the Court to dismiss the bank’s March 3 lawsuit, which alleges the former employees pilfered trade secrets and committed computer fraud before taking jobs at newly opened branches of American State Bank in Lubbock, Amarillo and Plainview.

Today’s filing by SHJ refutes those allegations, explaining that the former employees left en masse because they were dismayed by Centennial’s impersonal, bottom-line culture and management choices after its April 2022 acquisition of Happy State Bank, where the managers were originally employed.

“In the face of their locally owned employer (Happy) being swallowed by a much larger publicly traded bank (Centennial), they exercised their right under Texas law to work elsewhere for the employer of their choice alongside many former colleagues,” the filing says.

“Far from an indicium of nefarious conduct, the fact that many clients chose to follow these staffers to a new bank is simply a testament to the power of personal relationships in the small-market banking world,” the brief continues. “For Defendants, this lawsuit is nothing more than a vehicle for retribution brought by a jilted multi-billion-dollar business with unlimited resources.”

Andrew S. Hicks, managing partner of SHJ and one of the attorneys representing the 12 defendants, said today’s filing also asks the court to make Centennial “show its hand” with hard facts backing up its vague claims.

“Centennial has made a big point of saying how it has spent $5 million on a forensic investigation into the purported thefts and fraud. Its original complaint is littered with more than three dozen references to ‘forensic evidence’ or ‘forensic data’ or ‘forensic analysis.’ But we have yet to hear of any concrete findings,” said Hicks.

“Without a core of facts, this lawsuit is nothing more than a legal shell constructed with the specific purpose of exacting revenge against my clients by smearing their reputations and saddling them with tens of thousands of dollars in legal fees,” said Hicks, adding that Centennial’s lawsuit amounted to “litigation overkill” because it includes 143 different claims and could involve up to 100 witnesses.

Hicks said that it is common for banks to experience employee attrition during mergers, and that in Centennial’s case, there were indications as early as 2021 that its acquisition of Happy Bank would trigger a mass exodus of employees who were committed to the former management’s style of personalized banking based on relationships with local customers.

The defendants being represented by SHJ are Jay House, Channing Baisley, Drew Phillips, Willis McCutcheon, Michael Jackson, Jessica Terrell, Jason West, Samuel “Trey” Weaver, Derek Dollahite, Brian Murray, Diana Richarte and James Sikes.

Four other defendants have separate counsel and filed similar motions Monday to dismiss the case.