More than half of the 50-plus brokers in Prudential Securities West Bloomfield, Mich., branch have banded together to protest the firms new noncompete policy. The brokers sent a signed letter to the firms senior management refusing to sign what had been presented as a mandatory agreement prohibiting any departing broker from contacting inherited accounts. We said if that means we wont get house accounts, so be it, says a broker in the branch.
Members of the group decided on the letter when they read the agreement and found the actual language to cover more than inherited accounts, the West Bloomfield broker says. The agreement says all accounts in my book are at the discretion of management to redistribute as they wish for an unspecified period of time. One broker here had a labor attorney review the agreement, and he sald if we signed it, the firm would have ownership of our books.
Although senior management has told brokers its intent is to cover only inherited accounts, the broker says, the West Bloomfield group hasnt yet received a response to its letter.
Weve heard that many branch managers never gave information to brokers about the agreement, says the West Bloomfield broker. Brokers in other Prudential branches agree.
Branch managers appear to have discretion in asking brokers to sign the agreements. Our branch manager has been in the system a long time. Hes not about to piss everyone off, says a broker at another Prudential office made up mainly of veteran brokers. He says he recently received some inherited accounts and wasnt presented with the agreement. The young, gung-ho corporate types are more likely to ask brokers to sign, the broker says.
An East Coast broker with the firm more than 20 years says his manager knows better than to ask me to sign such an agreement. He says he hasnt seen the agreement, but word has traveled through the branch system that the language is broader than just inherited accounts. I wouldnt sign it anyway. Id be opposed to signing something that gives the firm the upper hand.
Prudential wont comment on the noncompete agreement.