Wealth Management Talent Tussles - Getting Legal Balance Right

Tom Burroughes Group Editor London 8 October 2019


The Credit Suisse spying case demonstrates that when banks try to enforce no-compete terms on former employees, there's a balance that has to be achieved. Litigation over such cases is rising, a figure in the employment law world says.

The Credit Suisse private banking spying drama has shone a spotlight on the sometimes fierce battle for talent and the legal balancing act this brings up.

All the talk of how humans might be cut out of the picture by robots has had a reality check. All-too-human senior figures are as sought-after as ever. The Swiss wealth industry has been rocked by the story of Iqbal Khan, now installed at Credit Suisse’s arch-rival, UBS. Revelations that Credit Suisse chief operating officer Pierre-Olivier Bouée had authorised surveillance on Khan to see if he tried to solicit old colleagues to move over, ended in a damaging scandal. Boueé has resigned from his job. Media reports at the weekend said prosecutors in Zurich are investigating Credit Suisse over the matter.

The saga suggests that banks have a difficult job in trying to balance the need to prevent former colleagues taking other co-workers away against the reputational damage of being seen to be play too roughly. That’s the view of Catriona Watt, partner at London-based law firm Fox & Partners. This firm focuses on areas such as employment law in financial services. 

“At a very senior level onerous restrictions are being enforced in courts and we are now seeing financial services firms more readily holding senior individuals to their terms,” Watt told this news service.

“In our experience, there are varying forms of action firms might decide to take where it suspects wrongdoing or potential damage to the business by a current or former employee, some technical and some more traditional, such as employee threat or email traffic monitoring software, use of CCTV, to even engaging a private investigator,” Watt said. 

“We have seen cases where firms do engage private investigators to follow departed/departing employees where they suspect an unlawful team move, breach of confidentiality, misuse of confidential information or unlawful solicitation of staff or clients in breach of restrictive covenants or fiduciary duties,” she continued. 

If a firm decides surveillance is justified – such as legitimate worries about a serious loss or other harmful activity – it should only be initiated at a senior management level, with strict guidelines in place, she said. 

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