Lawyers for Bank of America Corp and former Merrill Lynch & Co brokerage chief Robert McCann were in talks Wednesday to resolve his lawsuit accusing the bank of blocking him from taking a job with a rival.

McCann sued the largest U.S. bank last month, seeking to lift a non-competition clause in various Merrill agreements and thus freeing him to take a job with a rival. Published reports said the rival was Swiss bank UBS AG .

Bank of America is arguing that McCann must stay put through January 2010. The bank bought Merrill on January 1.

The outcome is critical for Charlotte, North Carolina-based Bank of America, whose chief executive, Kenneth Lewis, called Merrill's brokerage the crown jewel of that company when he announced the purchase of Merrill a year ago.

Merrill had about 16,000 brokers at the time, and its profits have helped Bank of America offset rising losses from credit cards and other consumer credit.

In a court filing on Tuesday, McCann contended that he gave written notice on January 5 that he would resign and that Bank of America accepted his reason for leaving.

He said the bank rescinded its acceptance the following month, fired him effective January 30, 2009, and won't let him take a job with a rival until a year after the firing.

I face the likelihood of missing out on what I believe is a 'once in a lifetime' opportunity, he said. At age 51, given the recent contraction of the financial industry and the scarcity of positions at the very senior level that are appropriate for me, I may never have a job opportunity like this again.

Bank of America, in court papers filed Saturday, said McCann is intimately familiar with its long-term strategic plans and that it would lose plenty of business if he went to work for a rival.

At a competitor, McCann could and likely would act as a 'magnet' to attract top talent and important clients and business partners away, the bank said. The potential damage to Bank of America should this occur is incalculable.

In August, Bank of America hired Sallie Krawcheck, the former chief financial officer and wealth management chief of Citigroup Inc , to run the combined brokerage of Bank of America and Merrill Lynch.

McCann and Bank of America are also sparring over whether he can recover more than $18 million relating to company stock. That issue is separate from whether he can take another job.

Bank of America shares were up 40 cents, or 2.4 percent, at $17.19 in midday trading on the New York Stock Exchange.

The case is McCann v. Bank of America Corp, New York State Supreme Court (Manhattan), No. 602628/2009.

(Reporting by Grant McCool and Jonathan Stempel; editing by John Wallace)