Staff poaching row ends up in court
A fierce row over poaching of top-level staff has erupted between two leading City firms.
Legal battle: Terry Smith's firm Tullett Prebon has accused rival BGC of poaching staff
Tullett Prebon, the inter-dealer broker chaired by combative City veteran Terry Smith, yesterday accused its rival BGC of underhand behaviour in trying to persuade staff to jump ship.
Smith's firm - one of the leading players in the world of inter-dealer brokers, which allow players in the capital markets to deal anonymously - recorded a 35% increase in pretax profits to £155m last year.
But it has launched legal proceedings against BGC because it says its staff are being encouraged to break their contracts.
Last year, Tulletts became embroiled in a heated legal battle with its former chief operating officer Tony Verrier, who quit - initially to go to a Swiss-based inter-dealer broker, but who then opted to join BGC.
Now, Tullett has launched legal proceedings against BGC and Verrier. BGC has been trying to get Tullett staff to quit - although their contracts still have years to run.
The dispute came to court yesterday. Tullett asked for an injunction to stop BGC approaching its staff. BGC has offered undertakings to try to stem the dispute. But Tullett said these were insufficient.
Daniel Oudkerke, QC, representing BGC, said: 'Large sums of money have been paid to individuals at Tullett Prebon to act as recruiting sergeants. These representatives have been acting wholly unlawfully.'
He quoted from a witness statement in which it was alleged that James Hall, who headed a group of dealers at Tullett Prebon, sent text messages to a team on behalf of BGC instructing them to refuse to talk to their employer about their careers. 'Mr Hall is there plainly acting as a recruiting sergeant for BGC,' said Mr Oudkerke.
BGC was offering £3.5m in cash plus £1.9m in cash to be split among a team in order to persuade them to leave, he added.
Dozens of employees had been approached - either by Mr Verrier or by his personal assistant Clare Howell. Individuals were offered signing-on payments of up to £300,000 to move to BGC, said Mr Oudkerke.
And some of the individuals being targeted were offered a template letter to give to Tullett Prebon in which they could complain about the way they had been treated.
This was aimed at giving people who wanted to leave 'the flimsiest argument for constructive dismissal,' Mr Oudkerke told the court.
A judgment is expected today.
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