Imagine taking an upfront recruitment bonus and moving to a new office at a new firm. But before the note is completely forgiven, the office is closed with no nearby alternative. You assume you owe no money if you leave, right?


Just ask Bill Lissau and Jane Terry, who went through that exact scenario with Dain Rauscher and Everen Securities, respectively.

When Dain decided to close its Tulsa, Okla., office this past July, the firm told its Tulsa brokers, including Lissau, that they had to move to Oklahoma City two hours away--or resign. Lissau says he told the firm that working so far away from his clients would make it difficult to remain in contact with them.

Lissau decided to switch firms, but he had a problem with the outstanding balance of 15,000 dollars he owed Dain on his upfront note. If he resigned, he owed the remaining portion of the recruitment bonus. "That was the language of the contract," he says.

By the time Dain closed the Tulsa office Sept. 2, Lissau had already moved to A.G. Edwards' Tulsa branch. But Dain was still coming after him for the remaining part of the bonus.

When RR last spoke to Lissau in August, he was close to settling the dispute--under the condition that he agree not to say anything derogatory about Dain. The firm was still attempting to collect taxes due on the note, Lissau claims.

Terry's situation is similar. She was given an upfront recruitment bonus to go to Everen in Santa Fe, N.M. But her office closed in the summer of '98. When she refused to move to the nearest Everen branch in Albuquerque 60 miles away, Terry was told to resign and pay back the remaining portion of her bonus--about 40,000 dollars. She refused both requests.

In a settlement the firm proposed last year, Everen offered to forgive Terry's indebtedness provided she agree not to make any "derogatory" remarks about the firm, and further promise not to file any kind of suit against the firm.

Terry, who contacted RR last year about her case, would not return phone calls about the current status of the dispute. She now works as a rep with Raymond James Financial in Santa Fe.

Brokers could try to get contract provisions to protect themselves. "[But] the problem is that many large broker/dealers are unwilling to include certain provisions within the agreement," says Michael Blumenfeld, a Los Angeles employment attorney. "So it comes down to how badly the firm wants a given broker, and how far that broker is willing to go to make it an issue."

Both Dain and Everen declined comment.