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Aug 1, 2005 11:41 pm

I am leaving a large wirehouse with a non-compete on my contract. How are others of you who have left, fairing out there? Does anyone know the general course of action (legal issues) after you leave a B/D for another?

Aug 2, 2005 4:25 am


im fighting with my old firm as we speak.  Make sure you follow the advice of your legal counsel.  If you do not have a good labor atty you need to find one asap.  Follow his/her advice and do not stray.  If you do not have someone picked out dont leave until you speak to one and have a game plan mapped out.  This is more important than how many clients will follow you.. I

Aug 2, 2005 6:00 pm

[quote=gridiron]I am leaving a large wirehouse with a non-compete on my contract. How are others of you who have left, fairing out there? Does anyone know the general course of action (legal issues) after you leave a B/D for another?[/quote]

I can't speak for you non-compete, but I can tell you from my experience that non-SOLICIT agreements such as the one I signed can be worked around by newspaper advertising and being very visible in your clients' communities, having an open-house, etc.  You can't call, write or email your old clients, but if they come to you, there is an NASD rule that prohibits firms from restricting clients from doing business with another firm, so it appears that they are fair game if they come to you on their own.

A non-COMPETE is another story.  It's pretty difficult to avoid the non-compete unless you don't mind physically moving your office.  If you choose to compete in your current geographical market, be prepared to make a settlement with your former employer to put it to rest.  From wha I hear anecdotally, B/Ds and reps usually settle before they go to arbitration.

That being said, there are all sorts of circumstances that can change what I've just said, such as the state you work in, what kind of a non-compete/non-solicit you've signed, when you became aware of and/or signed the non-compete, other covenants and/or breaches of your employment contract by either party, and how you leave your old firm.  The best advice that you'll hear ad nauseum is to hire a good attorney in this area.  It will be the best investment you can make in your new venture.  Whatever you do, consider going completely independent so you never have to sign one of those stupid things again.

Aug 3, 2005 4:06 am

Indyone makes a lot of good points.  Hire the ATTY ASAP!  Did you recieve any up front $$ from your current b/d?

Aug 7, 2005 4:03 am


Here we go again.  Guys, you are all practicing Wall Street voodoo and urban legends.  Doesn't anyone ever ask what the terms of a contract mean before they sign?  Don't you all think it would be worth a few hundred dollars to hire a lawyer to counsel you on what the non-compete and other clauses mean before you sign --- and, if you subsequently leave, you would have prepared a file with the lawyer's prior advice.


Hey, Bill, no offense, but when you join a firm, and a few days after you start, they shove this foreign-looking thing called a non-compete in front of you and ask you to sign, what do you think is going to happen? I mean, come on, assuming you're 22 years old and you get the impression that you need to sign or look for other employment, you smile, pledge your loyalty and sign.  Sure, you should talk to an attorney, but most rookies in this position will be so intimidated that they'll sign and hope that the contract never comes into play.

Now come on...cut me some slack...I behaved and advised the poster to talk to an attorney.

All kidding aside, I think I speak for a lot of advisors who visit this site when I say thanks for all the good advice you choose to share with all of us "RRs".  Just understand that most of us aren't pre-disposed to call a lawyer until we're in trouble.

Aug 8, 2005 3:13 am

Thanks you guys for all your help.

Bill, I read each link and they were extremely informative. I do have a follow up question. You wrote a little bit about some differences with "getting fired" compared with "quitting".

Does "getting fired"  (not for gross misconduct issues) help me in fighting the Non-compete and EFL repayment issues?

It seems like that is the case, especially since you mentioned it does not mean a yes on the u4.

Aug 8, 2005 4:25 pm

Bill, if a rep had an attorney review the the rep contract & the attorney identified elements that he’d recommend changing, from your experience what is the reality of the broker-dealer actually agreeing to change anything of substance?   I just assume the Merrill Lynches of the world are not going to agree to separate & unique contract terms among their reps.  If that assumption is correct, then I’d guess the major benefit of an attorney review is to make sure the rep is fully aware of what he\she is signing.  Right??

Aug 8, 2005 9:33 pm

Thanks, Bill, as always.

Yes, I followed the military active duty RR efforts.  That was a great thing.  While it (fortunately for me) didn't affect me at my age, I know it will help many of our brethren.  Thanks for all you did with it!

Aug 9, 2005 8:53 pm

Legal advice will only get you so far, so be prepared for things your
attorney didn’t expect.  In my case, the TRO, which was
essentially “no contact with any XXX-firm’s clients,” was what
mattered, and this TRO gave XXX firm a strong hand during the
negotiations which followed.  I had no written contract and the judge still handed down a pretty nasty TRO (which came as a surprise to me and my legal counsel).

Aug 10, 2005 3:28 am

No contract and the judge entered a TRO which said you could not contact any of your former clients?

I realize that I might not have standing to ask such a question here, but I gotta ask for more details. On its face, that is bizarre, and I would love to hear more of this story, or to see the pleadings and the TRO.

If you don't want to post it in public, feel free to email me at [email protected]


Aug 18, 2005 6:10 am

I will be reviewing one of these documents in the next week. How can I find an attorney to help me decipher this thing? Would I call your office, would I look in the yellow pages? Should I seek an attorney with securites experience?

Thx for your help!!

Sep 9, 2005 3:44 am

I joined my firm in 2000, and I can't remember everything that was signed.  I don't even know if a non-compete exists.  If I were to make a move, am I toast?  Is there something I could do to get this info?