Test case for cuffs
THE Barclays affair is regarded through- out the City as the test case for golden handcuffs. Can the buyer of a firm effec- tively bind its key people to stay? Con- tracts of service carrying such restrictions are disliked by the courts, which may refuse to enforce them if they are 'con- tracts in restraint of trade'. But City lawyers now advise that handcuff contracts are enforceable where the man in the handcuffs has received consideration meaning that he has got something out of It, in payment for his share in the part- nership. The previous case, where a trader, handcuffed to Hill Samuel was recruited by Lloyds Bank, is being resolved by legal agreement between the two banks. Lloyds will compensate Hill Samuel, there will be a de-briefing period between the two jobs, and the trader's team will not move with him. Barclays, though, are confronted with the departure of two Wedd partners com- plete with their team, and there may not be scope for agreement along Lloyds' and Hill Samuel's lines. What can be taken as certain is that Barclays intends to enforce every line in the contracts of those seeking to leave. The whole affair has shocked sensibilities to a point where the governor of the Bank of England is being urged to restore order in the market for City jobs. This, though, is not the best moment for testing how far the Governor's writ can be made to run.
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