Nine private client stockbrokers who resigned from Credit Suisse Asset management last August over what they called a clash of cultures, and were immediately sent on "gardening leave" which prevented them working during their notice period, have won the right at a High Court hearing to start work immediately with their new employer, James Capel.
Although six were on 12-month contracts, which are common in the City, notice is usually worked in full or part. The Deputy Judge, Mr David Steel, ruled that their skills could begin to atrophy if they were unable to work anywhere for a full year as Credit Suisse demanded, and six months was the maximum reasonable period for gardening leave.
If the judgment is upheld, it could set a precedent in situations that are becoming increasingly common. But Mr Steel also ruled that restrictive covenants in the nine contracts, preventing the individual brokers from having contact with clients they had dealt with at Credit Suisse for up to 12 months, are enforceable.
This ruling means that up to 700 private clients who have transferred their business from Credit Suisse to James Capel to stay with their long- standing advisers could be denied access to them for a further six months. The nine stockbrokers have launched an appeal which is due to be heard in about a fortnight. Credit Suisse also has the right to appeal against the ruling on garden leave.
The appeal will be held in open session and is expected to bring into the open details of the clash of cultures, which replaced traditional broker-client services and single fees with a centralised system with multiple charging structures.Reuse content