Restrictive covenants are a big deal in the City, but are they worth the paper they are written on?
Over the summer the High Court was kept busy by a case involving a bunch of investment advisors. Employees at a firm called Edward Jones declined to stay at the business when the firm was taken over by another, called Towry, instead upping sticks and moving to rival, Raymond James.
However, their old employer said that they had taken old clients with them, which they say broke a clause in their restrictive convents saying that they weren’t allowed to contact old clients for up to 12 months. The court is expected to give its verdict on the landmark case next month.
Restrictive covenants are a fact of life in the City, and something that HR professionals have to deal with regularly as part of many recruitment processes. These days when firms are keener than ever to hold on to clients it’s more important than ever that they are watertight.
Do you deal with restrictive convents? And if so, what do you think about them? Are they fair? Are they enforceable? Or are they a waste of time?
I’m writing an in-depth report for a law firm, to be published in November, that’s bound to make interesting reading for those who work in HR. I’d love to hear the views of HRZone readers who work in financial services.
To start with, we’re running a survey and would be grateful if you might be interested in filling it out – it’s very short and will only take a couple of minutes. Here it is:
And if you are interested in contributing further, or have something interesting to say on the topic either on or off the record, please get in touch with me at: jeremy.hazlehurst@gmail.com. I’d love to hear your views and of course there is scope to be included in the final report.
Jeremy Hazlehurst is a freelance journalist who, among other publications, writes for The Times, FT Wealth and Management Today.
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