The dos and don’ts of being headhunted

YOU may be forgiven if the case of Lonmar Global Risks v West & Others, which came to a conclusion in the High Court earlier this month, passed you by. But the verdict may well have a significant impact on you if you are in one of those City jobs where you work in a team, and you ever plan on moving companies, especially as a group.

The case of Lonmar et al was about poaching, and follows such high-profile cases as that of Tullett Prebon, the interdealer broker which won a court case against its rival BGC, which in March of this year was judged by the High Court to have poached 10 of Tullett Prebon’s staff. Following that case, and several other similar ones, there was much confusion in the City – and among lawyers – about what you can and can’t say when talking to a potential employer. Last week’s verdict clears up some of the confusions, and appears to mean that you are less likely to face legal action for talking to a potential employer.

The problems arise because those who lead teams are often directors of a company and therefore are fiduciaries, with duties to the company, says Gary Freer, an employment lawyer at law firm McGrigors. The difficulty comes in judging who has such duties. Even if not directors, senior employees with influence over other employees and access to confidential information can also in some situations be considered to have the same duties as fiduciaries. This makes it hard for them to talk to potential new employers.

Some recent legal judgements have appeared to imply that even more junior members of a team have the same duties. That places people in an unusually sensitive position, and can be interpreted as meaning that no member of a team can talk to another employer. Last week’s verdict overturns that absurdity, saying that being employed by a company does not imply that you have a fiduciary duty to it, but this is still a sensitive area. So if you are a member of a team, and you are being headhunted, what can and can’t you do?

For a start, says Freer, ensure that the potential employer doesn’t compromise you. “If your new employer and its headhunters have been shrewd, they will have approached and negotiated with the team members not as a group but as separate individuals: the less each individual knows about the discussions which the others are having, the better,” he says. Make sure that you act as a sole agent, even if your whole team is being headhunted. “There should be no ‘recruiting sergeant’ who is orchestrating the team move and persuading the other team members what to do.”

One particularly tricky area concerns what legal duties a team member has to tell the existing employer that colleagues have been approached. “In practice many team members will compare notes and have at least some knowledge of what is going on,” says Freer. “Those who are fiduciaries should disclose this knowledge – they cannot keep silent.” Following the Lonmar case, it is clear that others do not have such a duty.

However, even after the Lonmar case there are certain things that you should definitely avoid saying, says Freer. For example, do not discuss your possible move with clients or customers, or even sound them out about whether they will follow you. Do not direct business away from your present employer to your new one; and do not pass sensitive financial or client information to your new employer during negotiations (or afterwards); do not copy it or transfer the data.

Even in seemingly innocuous matters it is important to think very carefully about what you say. Neil Owen, director of UK operations at recruiter Robert Half, says that you should even be careful when providing your work history: “Stay focused on your skills and experience in relation to the role rather than specific company information that may be confidential.”

Before the interview, make sure that you know what you can and can’t say. “Re-familiarise yourself on your current company’s policies and employment clauses,” says Owen. “This is of particular importance if you are working in financial services as information shared on company performance or stock information may have legal repercussions.”

Also be careful about sharing your plans with colleagues. “As the line between colleague and friend is often blurred, you may feel tempted to share your job seeking plans with co-workers,” Owen says. “Even if unintended, there is an increased chance that your plans may be leaked to company management.”

JOB SEEKING | LEGAL DOS AND DON’TS

DO
Behave as an individual, even if you know you are being headhunted as a member of a team. Conspiring together looks bad in court.

If you are a fiduciary, make sure that you disclose information that could potentially damage the company. If you are not a fiduciary, however, you have no such duty.

Talk about your skills and experience in interviews, but be careful not to divulge information about the company’s performance. Stay focused on your specific role.

DON’T
Compare notes with others who you know are being headhunted.

Talk too openly about your current employer’s performance.

Tell clients or customers about any potential moves, or ask them if they will follow you, or direct business away from your current employer.

Tell your new potential employer any sensitive or client information during negotiations.