As we have discussed on this Blog over the past several years,
the Protocol for Broker Recruiting ("Protocol") allows
for reciprocal poaching of brokers. More specifically, if a broker
leaves one Protocol firm for another Protocol firm, the broker can
(a) take certain account information (client names, addresses,
telephone numbers, email addresses, and account title information)
to his/her new firm and (b) solicit the clients he/she serviced at
his/her former firm. Naturally then, the Protocol's
requirements conflict with confidentiality and restrictive covenant
provisions that are commonly found in broker employment agreements
and firm policies.
In a stunning move, two founding members of the Protocol, UBS
Financial Services and Morgan Stanley, withdrew from the Protocol
late last year. In doing so, both firms made clear that they
intended to start enforcing the restrictive covenant and
confidentiality provisions found in their broker agreements. As
noted by Andrew
