Adam Benjamin gave Fidelity Investments fifteen years. In that time he rose to run technology funds worth $48 billion, steering the Select Semiconductors portfolio with its stakes in Nvidia and AMD, the chip companies on which so much of this age is being built. Then, in July, he announced he was leaving — retiring, as he put it — to manage money for DFO Management, the family office of Michael Dell, the billionaire behind Dell Technologies. What happened next is now a lawsuit in Suffolk Superior Court, filed Oct. 9 against Fidelity’s parent company FMR, and it reads like a parable of how the great houses of money treat those who walk out the door.
A retirement, then a firing
According to the complaint, as the Boston Globe reported, Fidelity first tried to talk Benjamin into staying. When persuasion failed, the suit says, the firm “turned on a dime” and fired him the following week. Then, “like a scorned ex,” Fidelity accused Benjamin of violating a noncompete clause — reasoning, the lawsuit says, that it regarded Dell’s family office as a competitor. That alleged violation, the firm claimed, let it withhold a “multi-million dollar” payout Benjamin had earned across his fifteen years. Reuters first reported on the lawsuit.
The heart of the dispute is the very idea of competition. Benjamin’s suit argues that his work at Fidelity was separate from the company’s Family Office business, and that Dell’s operation — which manages one family’s fortune and offers no investment services to the public — competes with no one at Fidelity. Fidelity, the complaint says, “took the blatantly meritless and bad faith position that DFO is somehow competitive with Fidelity’s Family Office business ... and sought to punish Mr. Benjamin.”
The rule of seventy
Benjamin’s departure, the lawsuit insists, was a retirement in the firm’s own sense of the word. Under its rules, an employee qualifies when age plus years of service reaches seventy; Benjamin turned 55 in April, and the arithmetic was done. His July 1 retirement letter, now in the court record, is a study in courtesy. “I have greatly enjoyed my 15+ years here at Fidelity and believe I have been a valuable contributor to the firm’s success,” he wrote, adding: “As I embark on the next chapter of my career, I expect to maintain a very positive relationship with you as well as the rest of the management staff and all of the Asset Management professionals.”
Retirement, the suit says, made him fully vested in all of his Fidelity equity compensation — a “substantial” eight-figure sum, at least $10 million, now owed to him. Instead of paying it, the firm invoked a separate clause called Forfeiture for Competition and threatened a seven-figure penalty if he joined Dell’s group before a twelve-month restrictive period expired. During the retirement negotiations, the complaint adds, no one at Fidelity had suggested that working for the Dell office would breach anything.
Two versions of an agreement
Benjamin’s lawyers raise two further points. Fidelity acknowledged his signature on the restrictive agreements, the suit says, but never signed them itself. And because the firm terminated his employment without cause after he announced his plans, it cannot withhold his funds. He asks the court to award him compensation and damages and to invalidate the noncompete clause altogether. Benjamin and his lawyers did not respond to requests for comment on Friday.
Fidelity, for its part, told the Globe the noncompete is an industry standard meant to protect customers’ interests when investment professionals depart: under its terms Benjamin would draw his Fidelity salary for six months while refraining from related activities with a competitor, and the firm says he knew the restrictions he signed. It is an old arrangement, the golden cord that ties the departing servant to the house he served. The question a Massachusetts court must now answer is whether a billionaire’s private counting house is truly a rival to one of the largest asset managers on earth — or whether the cord was simply pulled tight because a valuable man chose to leave.