City broking firm found guilty of unlawfully poaching staff

A city broking firm has been found guilty of unlawfully conspiring to poach staff from its rival.

BGC Partners and its employees Tony Verrier and Shaun Lynn plotted to encourage 10 brokers from rival Tullett Prebon to breach their employment contracts and move to BGC, the High Court held.

Verrier, a previous employee of Tullett Prebon, left the firm in 2008 and joined BGC.

High Court judge Justice Jack said: “It was Mr Verrier’s intention to recruit primarily from Tullett. There were two reasons. One was that it was the company which he knew and where he was known and where he had friends. Second, recruiting from Tullett was a way of getting his own back on Mr Smith [chief executive of Tullett Prebon].”

The 10 poached staff made claims of constructive dismissal in an attempt to break their contracts, but these claims were dismissed.

Tullett Prebon has been granted the right to seek damages, and the poached staff could now be forced to pay back loyalty bonuses and retention payments worth up to £500,000 which were made in the months before they left the company.

Stephen Simpson, an employment law editor at XpertHR, said the case highlighted the importance of ensuring restrictive covenants – clauses in employment contracts that restrict employees’ freedom to work for competitors – were “watertight”.

He said: “This case is a useful reminder for all employers, large or small, of the importance of having watertight restrictive covenants in contracts of employment.

“There is nothing that an employer can do to prevent a rival poaching key staff or even entire teams unless the staff in question are in breach of contract.”

Injunctions against BGC, Verrier and Lynn, preventing them from recruiting Tullett Prebon staff, have been extended to 2 April. Nine of the 10 poached employees will be forced to remain on gardening leave until 26 March.

Comments are closed.