Can My Firm Sue Me for Leaving? Garden Leave, TROs, and Non-Solicits Explained

The short answer: Yes, your firm can sue you for leaving, but a disciplined exit makes it hard for the firm to win. Courts have often refused to restrain advisors who resigned first, took nothing beyond what the Broker Protocol allows, and solicited no one before resigning. The real risk lives in the exit choreography: your notice and garden leave clauses, your non-solicit, and what you take with you on the way out.

Nothing in this article is legal advice; contracts and jurisdictions differ, and any advisor planning a move should engage experienced securities counsel. The court outcomes and Protocol membership discussed below reflect the record through this article's dates; confirm current status before acting.

Four years after Morgan Stanley, UBS, and Citigroup walked out of the Broker Protocol, the fear of being sued still keeps advisors at firms they have outgrown. The fear is understandable. It is also, in most cases, out of proportion to the actual legal landscape.

Here is the question we hear more than any other, in some form: "Can my firm actually sue me for leaving?"

The honest answer is yes. Any firm can sue anyone. The better questions are whether the firm is likely to win, what it would have to prove, and what a disciplined advisor can do to make the suit unattractive to bring at all. On those questions, the record of the past four years is far more encouraging than most advisors realize.

The Protocol, and what changed in 2017

Start with the framework. The Protocol for Broker Recruiting, created in 2004 by Merrill Lynch, Smith Barney, and UBS, is the industry's peace treaty. An advisor moving between two member firms may take exactly five things: client name, address, phone number, email address, and account title. Nothing else. No statements, no account numbers, no copies of files. Solicitation may begin only after resignation. Follow those rules and the move is largely insulated from solicitation litigation.

By late 2017, nearly 1,700 firms had signed on. Then the ground shifted. Morgan Stanley withdrew effective November 3, 2017, declaring the accord "replete with opportunities for gamesmanship and loopholes" and "no longer sustainable." UBS followed a month later, effective December 1, with Tom Naratil framing the exit as a pivot to retention: "Our top priority is helping you reach your full potential, not recruiting advisors from our competitors." Citigroup confirmed its own exit as the year closed, effective January 8, 2018.

The exits changed the choreography of leaving those firms, and movement continued. Which brings us to what has actually happened in courtrooms since.

What have courts actually done to departing advisors?

The fear scenario is the TRO: the emergency restraining order filed days after resignation, freezing the advisor's ability to contact clients while an arbitration panel gears up. Firms do file them. What advisors hear less often is how these motions have fared against clean exits.

In early 2018, in the first wave of post-Protocol departures, three separate cases went largely the advisors' way. A seven-person, $336 million team that left Morgan Stanley in Michigan saw the firm's TRO motion withdrawn. An advisor who left UBS for Raymond James saw the firm's TRO request denied in part in Idaho state court. Another who left UBS for Ameriprise saw the request denied in North Carolina. The pattern across the decisions was consistent: where the advisor resigned first, took nothing beyond what was permissible, and did not solicit before resigning, judges were unwilling to shut down their ability to work. Can a firm sue an entire team that resigns together looks at what a firm can bring against a whole team that leaves together.

Litigation risk never drops to zero, and it concentrates almost entirely in the exit process itself. Advisors who take spreadsheets, forward statements to personal email, or quietly line up clients before resigning hand their firm the evidence it needs. Advisors who execute a disciplined exit give a judge very little to restrain.

What is garden leave, and why does it matter more than the Protocol?

While the industry debated the Protocol, firms moved the battleground into the contracts themselves. The most important development for anyone planning a move is the spread of advance-notice and garden leave provisions: clauses requiring 60 to 90 days of notice, during which the advisor remains employed and paid but is pulled back from client contact, left to tend the garden while the firm works the phones.

Two things make these clauses dangerous to ignore. First, they often live outside the employment agreement, embedded in bonus agreements, deferred-award documents, and team agreements signed years apart. Second, courts have held they can bind advisors even at Protocol member firms. In a widely noted 2018 ruling, the Georgia Court of Appeals held that the Protocol does not automatically override the 60- or 90-day notice requirements in advisers' agreements, and sent the firm's claims back to the trial court; the contract's notice clause could still bind them.

The practical meaning: your firm's Protocol status is only the first question. The full answer to "what happens when I resign" is scattered across every document you have signed, and reading them before you plan anything comes first.

Deferred compensation, the third lever

Restrictive covenants are the stick. Deferred compensation is the leash. Unvested awards forfeit on resignation at most major firms, and the balances grow with production and tenure, which is precisely the design. Recruiting packages at acquiring firms are frequently structured to offset what is left behind, but the interaction between forfeited awards, notice clauses, and non-solicits is exactly the kind of multi-document problem that rewards professional review before any move.

What should you do before resigning?

Distill the last four years into practice, and the guidance is straightforward:

• Know your firm's Protocol status. Member-to-member moves still enjoy the accord's protection. Moves out of Morgan Stanley, UBS, or Citi run entirely through your contracts.
• Collect and read every agreement, especially bonus and award paperwork, before signaling anything. The covenant that binds you is rarely in the document you expect.
• Take nothing. The five Protocol data points if you are covered; effectively nothing if you are not. The urge to bring "just a contact list" is how TROs get won.
• Do not solicit before you resign. Announcements, hints, and pre-wiring conversations are the most common self-inflicted wounds.
• Get help before, not after. Experienced securities counsel and a transition consultant earn their fee in the planning phase, when the exit can still be designed.

The firms that left the Protocol were betting that fear would hold advisors in place. Four years on, the evidence says the fear is manageable and the moves continue. What separates the clean transitions from the courtroom stories is choreography.

What has changed since 2021 (updated October 2026)

The picture above still holds in its broad lines, and five years of rulings and rule changes have added detail.

The Protocol keeps growing, and membership moves both ways. The administrator's member list dated October 12, 2026 shows more than 2,300 listed firm entries not marked as withdrawn; nearly 1,700 firms had signed by late 2017. Two RIAs withdrew effective May 22, 2026, and another RIA joined in September 2026.

Courts look first at what the advisor signed. In August 2025 the Fourth Circuit, in a published opinion, left an injunction in place against former employees whose agreements said they controlled over the Protocol, and vacated the injunction against their new firm, which was not a party to those agreements. Other recent rulings went the other way: the Eighth Circuit vacated a preliminary injunction against departing advisors in January 2026, and Pennsylvania's Superior Court in February 2026 affirmed the denial of an injunction and held the non-solicit clause unenforceable as written. A federal court in Delaware granted a restraining order in part in March 2026 and a preliminary injunction that May, and the parties later agreed to end the case. The record since 2021 is less one-sided than the early cases suggested: the outcome turns on the contract and the evidence.

The arbitration clock. Under FINRA Rule 13804, in disputes between a FINRA member firm and its associated persons, a firm that wins a temporary injunctive order in court gets an arbitration hearing on permanent relief that must begin within 15 days; a firm that loses its court bid waits for the ordinary arbitration schedule. Whatever the dispute between firm and advisor, FINRA Rule 2140 bars a firm from interfering with a client's own request to transfer an account, including by seeking a court order against it, unless the account is subject to a lien for money the client owes or another bona fide claim; how those transfers run is covered in how client accounts move when you change firms.

No federal non-compete ban; the states differ. The FTC adopted a rule banning most non-competes in April 2024; a federal court set it aside on August 20, 2024, the FTC dropped its appeals in September 2025, and the rule was removed from the Code of Federal Regulations on February 12, 2026. States have moved in both directions. Washington enacted a law, effective June 30, 2027, that bans non-competes and limits customer non-solicits to active solicitation of current or prospective customers for up to 18 months. Florida's CHOICE Act, effective July 1, 2025, allows garden-leave and non-compete agreements of up to four years for workers paid more than twice the annual mean wage of the county where their employer is based.

Every practice is different. The specific answer comes from a confidential conversation: the best deal we can win for your practice through our relationships and our record of past deals, and how culture, technology, support and service compare at the firms that fit. Request an introduction.

Reading those provisions while there is still time to plan around them, rather than react to them, is in reading your own agreement two years early.

If you were terminated rather than resigning, the order of the first days changes; what to do in the first 72 hours and Rapid Response cover that week.