Full service brokerage firm Edward Jones has secured an injunction against one of its former brokers, preventing him from soliciting his former clients for six months.
In a judgment released last week, the Supreme Court of British Columbia granted the to injunction Edward Jones, which was seeking to block Victoria broker and his assistant from soliciting their former clients after they left the firm to join rival brokerage RBC Dominion Securities.
According to the decision, Edward Jones claimed that the broker, Randy Voldeng, breached a term in his employment contract preventing him from soliciting his former clients for six months. The firm also claimed and that Voldeng and Brenda Jarvis, his assistant who followed him to RBC, improperly used confidential information such as client lists and statements. Voldeng denied that he solicited former clients, and denied that he and Jarvis have any confidential information in their possession. These allegations have not been proven, however the court did grant the injunction, subject to several conditions.
The injunction prevents Voldeng and Jarvis from soliciting securities and/or insurance business from any client he dealt with, or learned about, while at his former firm, until September 12, or the conclusion of the action, whichever is first.
According to the injunction, if any former client contacts Voldeng, he is “entitled to respond to factual questions and carry out instructions but he is not entitled to promote the benefits of RBC in any manner that can be interpreted as soliciting or enticing the client to move his or her account from the plaintiff to RBC.” Voldeng and Jarvis are also prevented from using account statements, files, customer lists, or other information acquired at Edward Jones.
The court said it accepts that an injunction will interfere with a broker’s ability to contact former clients and that this may result in irreparable harm to them. However, it also says that the refusal of an injunction will deprive a plaintiff of the only effective remedy for an alleged breach of the non-solicitation provision in an employment agreement. “Clearly, in this industry, the issue of client solicitation following termination of employment is a significant one,” the court said, ruling that in this case the balance of convenience favours the firm.
The court noted an injunction cannot prevent the broker from having any contact with his former clients. “Financial advisors develop ongoing relationships with their clients and those clients are entitled to choose whether or not they will follow their advisor to his new place of employment,” it said. However, the court found that advisors can’t go beyond communicating to the point of soliciting their business.