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Beware of Promises When Considering a Job Switch
rokers considering a job switch should remember the lessons learned by a broker who thought he had found the "perfect" position.
The broker was excited in speaking to the headhunter. After all, the broker had an interest in expanding his already successful business and taking advantage of the resources of a major wirehouse, and those goals nicely coincided with the firm's ambition to penetrate rural America. The broker thought that he had done his due diligence. He asked questions. He received solid answers and commitments. Consequently, the broker accepted the employment offer.
The parties executed two agreements. The first related to compensation -- salary, bonuses and deferred compensation. The second related to employment and covenants not to compete. Notably, while the employment agreement provided that the broker's employment could be terminated for any reason or for no reason, neither agreement contained an "Integration Clause". An integration clause reflects the parties' express agreement that the four corners of the written agreement control their rights and obligations. That is an important clause because, without it, a party challenging the agreement can properly introduce other evidence of agreement (oral promises, other writings and so forth) to modify the terms of the agreement.
The employment agreement also required the wirehouse to provide training, suitable office facilities, suitable sales support, suitable execution, processing and clearing functions as well as career development supervision. So what, you may ask? Read on.
The wirehouse had no existing office in the rural area. It had to find one, lease it, build it out, furnish it, and make it fully operational. It promised to do so by a certain date. The broker relied upon that promise and dutifully gave his notice of resignation to the former employer.
As you may guess, the firm missed the date. It missed the date not just by a few days, but by a few months! Scrambling, the firm found "temporary" office space for its new broker - temporary for two months! The broker's new, temporary home was an empty hotel room, with no telephones (let alone telephone service). It took almost a week to obtain local telephone service, about two weeks for long distance.
Electronic communication was worse, owing to the firm's failure to provide the necessary connections. The broker was forced to attempt to connect to the firm through America On-Line. As ridiculous as it sounds, problems persisted not only for the two months at the temporary space, but also thereafter for about 8 months.
There were more problems still. Suffice to say that all of the problems significantly impacted the broker's ability to transfer customer accounts, service accounts and prospect for new accounts. After a year of headaches and lost business, the broker resigned. He has not recovered.
There are many lessons to be learned from this broker's experience. First, be careful when you switch to a firm that is setting up a new shop in a new locale. Once you believe you have done your due diligence, do it again.
Second, pay attention to what the parties are promising each other. If the lawyers representing the firm fail to include an Integration Clause in your agreement with the firm, as happened to the broker, your bases for imposing liability upon the firm and recovering damages are much greater.
Third, examine what the firm is promising you in the parties' agreements. Who would have forcast that the firm's promises to provide training, suitable office facilities, suitable sales support, suitable execution, processing and clearing functions as well as career development supervision would be so important?
Fourth, if you do choose to switch jobs, but then notice or suspect that things are not turning out the way that you anticipated, you should maintain accurate, detailed and legible notes recording events and conversations, with dates, parties identified, and so forth. These notes can help prove your allegations in any subsequent litigation.
These lessons may help you avoid a "frying pan to the fire" scenario.
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