Merrill Lynch Financial Advisors and Noncompete Agreements

Dan Frith

Contributor

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Everyone knows the U. S. economy is suffering. I believe we will continue to see corporate bankruptcies, mergers, and requests for financial assistance from the federal government. We will also see more and more employees faced with onerous non-compete and non-solicitation contracts.

Take the financial giant Merrill Lynch who has just been swallowed up by Bank of America. Guess what? Bank of America, as a part of its retention package, wants all of the "financial advisors" at Merrill Lynch to sign non-compete contracts...provisions which may prevent them from taking clients/customers with them if they should leave their employment.

A Merrill spokesman says the noncompetes don't change Merrill's "Protocol for Broker Recruiting." I don't know what is in the "Protocol" but I do know that state law controls the issue regardless of the "Protocol."

My take: If you are one of the thousands of Merrill Lynch financial advisors, your best bet is to consult with an experienced attorney (licensed in your state) and understand the serious implications of what you are being asked to sign. I gave the same advice to Registered Rep Advisor magazine.