Facing an Exodus of Employees? Could It Be an Unlawful Team Move?

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Team moves, in which key personnel simultaneously resign and move in concert to a competitor, can destabilise the foundation of a business. Those on the receiving end of such a manoeuvre may have remedies available in response where the move is deemed unlawful.

Jefferies International Ltd and Others v Cantor Fitzgerald & Co and Others is one such case in point; proceedings are currently ongoing before the High Court of England and Wales.

The case concerns the concerted resignation of 26 employees from the financial group (‘Jefferies’) who worked in various locations around the world.  Despite the fact that some of the Employees worked in the New York and Hong Kong, all the employees resigned on the same day, at 11.00 am London time. All the employees then instructed the same solicitors and then took up employment with the same competitor group company (‘Cantor’).

The financial services group (‘Jefferies’) commenced legal proceedings against three of its former employees who resided in the UK for breach of contract.

Furthermore, Jefferies also commenced legal proceedings against the English, US and Hong Kong branches of the competitor group company (‘Cantor’).

Jefferies allege a “strong inferential case of tortious wrongdoing against Cantor” i.e. that Cantor directed and coordinated the group resignations, thus inducing the 26 to breach their contracts. It has also been alleged that Cantor directed the 26 Employees to refuse to honour contractual bonus repayment obligations which were triggered by their resignations and subsequent employment by Cantor.

At a preliminary hearing, Cantor argued, amongst other things, that the Claims against the US and Hong Kong companies with the Cantor group  fell outside the jurisdiction of the courts in England and Wales and that those matters should be dealt with by the New York courts or alternatively arbitration.

The High Court, however, found that England was the proper place for the case to be heard and that the interests of justice would be best served by a trial taking place promptly and without further delay.

You can read the full case here.

For advice on any employment contract matter, please contact Vina Madhavji on 01254  311 282, email enquiries@watsonramsbottom.com, talk to us via live chat or alternatively complete our online enquiry form and one of our experts will contact you.

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