Laissez-Unfair? Morgan Stanley Ordered To Keep Hands Off Merrill Lynch Staff
Everything seemed kosher. James Gorman abided by his agreement when he left Merrill Lynch not to go to work for a competitor for six months.
Everything seemed kosher. James Gorman abided by his agreement when he left Merrill Lynch not to go to work for a competitor for six months. The former head of retail brokers for individual investors was hired by Morgan Stanley CEO John Mack last summer, and finally joined the Merrill Lynch rival in February; a month later he announced two former colleagues from Merrill, Jerry Miller and Richard Skae, were joining him, with a third, Andrew Saperstein, coming aboard next week.
Under the contract, Gorman is not allowed to go after Merrill Lynch employees for a year. The Wall Street Journal reports, ML went to court to stop the brain drain, and won a temporary restraining order to keep Gorman’s hands off its staff members.
The two sides are to meet again March 30 to explain why the order should, or should not, remain in force. One perplexing issue is this: Gorman may not solicit Merrill Lynch folks, but what if they contact him? In its legal brief, Merrill Lynch says it “strains credulity” that the ML trio “reached out” to Morgan Stanley and that Gorman played no role in arranging their employment with him. To that, Morgan Stanley said the judge’s order “in no way prohibits any officer, branch manager, financial consultant or other Merrill Lynch employee from pursuing employment with Morgan Stanley.”