Goldman's Aggressive Legal Tactics to Enforce Non-Solicitation Agreements Before Creative Planning Sale

Posted on October 23rd, 2023 at 1:25 PM
Goldman's Aggressive Legal Tactics to Enforce Non-Solicitation Agreements Before Creative Planning Sale

From the desk of Jim Eccleston at Ecclesoton Law 

Two former Goldman Sachs Personal Financial Management advisors based in California have filed a lawsuit challenging the enforceability of their employment agreements following their departures.

The lawsuit specifically targets the non-compete clauses in the agreements, which would restrict the advisors from participating in the industry for six months after leaving Goldman Sachs in September. Additionally, it addresses clauses that prohibit them from soliciting their former customers. This legal action comes just before Goldman Sachs completes the sale of the unit in its fourth quarter to Creative Planning.

Corderman and Kohrmann claim these clauses violate California state laws supporting employee choice. The lawsuit also requests the court to compel Goldman to surrender any profits obtained from enforcing the challenged contractual terms, in addition to attorney fees, costs, and interest. In their complaint, the advisors assert that the non-compete clauses unlawfully restrict them from participating in significant segments of the financial industry and violate California law, which prohibits employers from inhibiting employees from engaging in a lawful profession. The advisors argue that a provision mandating arbitration of their dispute violates California state law. They argue this because they were required, without negotiation options, to sign employment agreements to secure their jobs and the mandatory arbitration provisions were non-negotiable.

According to FinancialPlainning.com, Peter Mallouk, CEO and majority owner of Creative Planning, intends to actively enforce the terms of employment agreements signed by advisors during their tenure at Goldman Sachs or its predecessor, United Capital.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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