While it was never doubted that the resolution of the dispute would lie in the privacy of a Finra arbitration hearing, as set out in the agreement between Campbell and her employer, involving civil court to potentially freeze J.P. Morgan’s activity around her clients shed public light on the kinds of disputes channel conflicts can raise and how the involved parties try to resolve them before the court complaint.
In his ruling, the judge stated that since Campbell “is less seeking to maintain the status quo than asking for an order codifying her view of the merits, the court finds that plaintiff has not made the required ‘clear showing’ necessary to warrant the requested extraordinary remedy she seeks as to any of her claims. … None of this is to say that the court has concluded that defendants (or plaintiff) will win at arbitration. This is a complex (and apparently messy) high-stakes business dispute that the arbitrator will have to sift through on a fully-developed record … so that the merits of the dispute can be determined as a matter of actual, not preliminary, relief.”
In addition, the judge said, it was possible that the limitations Campbell asked for would not be in the interests of the clients, to whom both Campbell and J.P. Morgan had fiduciary responsibilities.
Had the side letter been more specific, it’s possible the dispute between Campbell and J.P. Morgan might have been avoided altogether, sources said.
“Here, while the representative did a better job than most having recruiting promises documented, that documentation was still apparently imperfect, at least in the eyes of this court,” said Sharron Ash, chief employment counsel at Englewood, N.J.-based Hamburger Law Firm, which specializes in counseling advisors. “A takeaway lesson for others is not only get those promises in writing, but make sure it is subject to only one interpretation. Here, the judge found ambiguity in the contract clause(s) at issue and, among other reasons, refused to grant a TRO because it would amount to interpreting the contract in the manner urged by the rep, where the dispute over the meaning of the language was the very subject [of] arbitration.”
A Possible Path Forward
Now that the dispute will most likely go to arbitration—assuming the two sides don’t resolve the issues at hand—the lengthy process of that endeavor brings its own dynamics. Of course, Campbell could leave J.P. Morgan and try to take her clients with her, but that might be quite complicated, attorneys noted.
“Another move in a short period of time is often out of the question as it poses too much risk of harming client relationships and undermining confidence in the advisor,” Ash said.
And yet, staying put for a year and a half pending arbitration could bring its own stress. “Choosing to sue her firm while she remains employed can be a risky play,” Ash continued, “and make for an estranged relationship for the duration of her tenure with the firm.”
But Landsman said he could see the parties coming to an agreement that would enable them to move forward now that there’s been a full airing of grievances, especially since Campbell joined the firm just over a year ago.
“Obviously, she was bringing something to the table the firm was interested in having, and they both though this would be a good idea,” Landsman said. “Now there’s a chance to step back and reassess where they are. There was a time not too long ago when they thought this was a profitable relationship for both of them.”