Tullett Prebon Plc and others v BGC Brokers LP 2010 AER 186

Tullett and BGC were rival inter-dealer broking companies. Mr Verrier, Tullett’s COO left by agreement to join BGC on 2 January 2009. He had given notice in April 2008 that he would be leaving his employment when his contract expired on 31 March 2009. After Mr Verrier left Tullett tried to stem the potential loss of further brokers to BGC. The 45 day case concerned the employees who left and who stayed and claims against BGC for inducing breach of contract and conspiracy amongst others.

The Court held Tulletts were entitled to injunctive relief and able to recover from the brokers who left the retention payments and the loyalty bonuses they had been paid as the clauses requiring them to do so were neither in restraint nor penalty clauses. Interestingly, 3 employees who had agreed to join BGC were also able to tear up their contracts and remain with Tullett without penalty on the basis that they could have no trust or confidence in BGC in being recruited in the way they were and so they were released from having to serve BGC.

Key point: Employers should be wary of contrived constructive dismissal claims where employees purport to be justified in walking out in order to join a competitor without the burden of their hitherto restrictive covenants.