Salomon & Ludwin, LLC v. Jeremiah Winters
150 F.4th 268
4th Cir.2025Background
- Several employees of Salomon & Ludwin, LLC, a financial services firm, resigned to start a competing firm (Albero Advisors, later Founders Grove Wealth Partners) and began soliciting former clients.
- Those employees had signed agreements with Salomon containing non-solicitation and confidentiality provisions, but Salomon was also a signatory to the Protocol for Broker Recruiting, which allows limited client solicitation by departing advisors if certain procedures are followed.
- The employment agreements explicitly stated they take precedence over the Protocol in case of conflict.
- Salomon sued the former employees and the new firm for misusing client information and soliciting clients in violation of both federal and state trade secrets laws and contractual obligations, seeking and obtaining a preliminary injunction against all defendants.
- The district court found Salomon likely to succeed on trade secrets claims and held that even if the Protocol applied, the "raiding" exception allowed relief; the defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the "raiding" exception to the Protocol applied | Defendants' conduct was raiding, so Protocol's protections don't apply | Departure and client solicitation not "raiding" under Protocol | "Raiding" requires outside firm poaching; not present here |
| Whether employment agreements or Protocol controlled | Agreements prevail over Protocol by their terms | Protocol should apply since both firms are signatories | Agreements control over Protocol; employees violated agreements |
| Whether former employees' conduct was enjoinable | Employees breached contracts by soliciting clients and using information | Protocol shielded conduct if procedures followed | Injunction proper as to former employees under agreements |
| Whether the injunction should extend to the new firm | New firm acted as vehicle for breach and should be enjoined | New firm not party to agreements; no independent bad acts alleged | No injunction against new firm itself; not party to agreements |
Key Cases Cited
- Direx Israel, Ltd. v. Breakthrough Med. Corp., 952 F.2d 802 (4th Cir. 1991) (standard for granting preliminary injunction)
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (articulates four-factor test for preliminary injunctions)
- Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, Owned by Sandra Townes Powell, 915 F.3d 197 (4th Cir. 2019) (abuse of discretion and error standards on preliminary injunction review)
- TravCo Ins. Co. v. Ward, 736 S.E.2d 321 (Va. 2012) (contract terms given ordinary meaning in Virginia law)
- Ames v. Am. Nat'l Bank of Portsmouth, 176 S.E. 204 (Va. 1934) (contract construction guided by intent expressed in contract's words)
- TM Delmarva Power v. NCP of Virginia, 557 S.E.2d 199 (Va. 2002) (contracts construed as written)
- Wilson v. Holyfield, 313 S.E.2d 396 (Va. 1984) (court must not add or subtract from contract terms)