A Pennsylvania appeals court has denied a request by an investment advisory business for an injunction to block three financial advisors from leaving to work for a competitor, Financial Advisor reports.
A three-judge panel for the state Superior Court upheld a lower court ruling against First National Trust Company, which does business as FNB Wealth Management. (FNB) The firm was trying to stop the three advisors from working at registered investment advisory firm Capital Wealth Advisors. (CWA)
FNB contended that the advisors violated the noncompete and non-solicitation provisions of their contracts and misappropriated confidential information when they joined CWA in 2025. A request was made for a preliminary injunction to enforce the post-employment non-solicitation covenants in the employment agreements of the three advisors, Stephen G. English, Benton H. Elliott Jr., and Zachary A. Craig, and to preclude CWA from employing them. FNB was trying to stop them from continuing to serve clients at their new firm while the broader case proceeds through the courts.
The appellate panel concluded that FNB “failed to establish the requisite irreparable harm that would result” if its motion were denied. The court found no proof the advisors improperly solicited clients or took proprietary information, and said the clients were free to follow their advisors.
Findings by the trial court indicated that the advisors did not affirmatively reach out to clients to join them at the new firm but instead waited for clients to contact them, and only then discussed whether and how the advisor-client relationship could continue at CWA. Thus, they did not violate the customer non-solicitation clause.
The trial court also found that many clients learned of the departures from FNB itself, which notified customers shortly after the resignations, after which numerous clients communicated that they wanted to remain with the departing advisors.
The appeals court’s opinion also suggests FNB’s non-solicitation agreement was void for geographic reasons. The court held that FNB’s non-solicitation provisions were “unenforceable as written,” saying, “Our review of the non-solicit clause … confirms the lack of any geographic scope.”.
The opinion held that the advisors did not provide customer lists or account information to their new employer. When the advisors shared preliminary estimates with Capital Wealth Advisors about potential revenue or assets, the court characterized those figures as general, “back of the napkin” projections—not confidential data. The trial court concluded that such information was not proprietary.
FNB’s request for a preliminary injunction was initially denied by the trial court in August 2025.
If you are looking to move from one firm to another, planning to go open up or join an RIA, looking to sell your firm or grow through acquisition or bringing on new advisors, the attorneys at Hyman Cotter have the experience to guide you through the process to protect your interests. Regardless of whether the transition involves protocol or non-protocol firms, we will properly advise you so that you can focus on your transition and we will work to limit the risks you face during this transitional period. For more information, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a free consultation.
