PROVIDENCE, RHODE ISLAND, Oct 14 : A former semiconductor fund manager at Fidelity Investment Management has sued its parent company FMR, claiming it refused to pay him a "multimillion-dollar" compensation package after he joined DFO Management, the family office of billionaire Dell Technologies founder Michael Dell.
The suit, filed by Adam Benjamin in the Suffolk Division of the Superior Court of Massachusetts, alleges that after Fidelity executives failed to persuade him to stay at the firm, the company "turned on a dime" and terminated him on July 10 of this year. Fidelity then imposed a non-compete clause, causing him to forfeit a compensation package totaling in the millions of dollars.
"Rather than protecting any legitimate business interests, the provisions are being broadly misused by Fidelity as a retention tool or improper barrier/deterrent to" Benjamin's ability to pursue other professional opportunities, the lawsuit alleges.
Fidelity declined to comment on the lawsuit, which was filed on Friday. Neither Benjamin nor his lawyers could be reached for comment.
Non-compete agreements are common in the asset management industry.
Benjamin managed the $48 billion Fidelity Select Semiconductors Portfolio, which is up 58 per cent so far this year, compared to 13.3 per cent for the S&P 500 index.
Its average annual return of 37.4 per cent over the last five years puts it in the top percentile of all comparable funds rated by Morningstar, which awarded the fund five stars and a gold medalist rating, its top score.
Benjamin began working at DFO on October 1, the lawsuit said. He alleged that Fidelity's withholding of compensation rests on the false claim that he was joining a competitor. He said he has never worked for Fidelity's own family office business.