Kutak Rock partner Andrew Shedlock authored an article for Law360 titled “How Courts Treat Nonservice Clauses for Financial Advisers.” The piece analyzes how courts across the country are addressing “nonservice” and “nonacceptance” provisions—contractual clauses that restrict departing financial advisers from accepting or servicing clients they previously worked with, even when the clients independently choose to follow them.

In the article, Andrew explores how these provisions present significant challenges for advisers and reviews a range of recent court decisions, including those that have upheld and invalidated such clauses. He highlights that courts taking a strict contract-based approach often uphold nonservice provisions, while those considering public policy arguments—particularly client choice and market competition—are more likely to strike them down.

Drawing on cases from Minnesota, Oregon, Wisconsin, Idaho, Arizona, Illinois and Pennsylvania, Andrew underscores the importance for advisers and their counsel to understand how their specific state law treats nonservice and nonacceptance provisions. His analysis concludes that employees contemplating a job change must carefully evaluate relevant state precedent and recent opinions to anticipate potential legal risks from former firms.

Andrew’s article appears in Law360 and is available here (shared with permission).

Andrew is a seasoned litigator with a specialized focus on representing broker-dealers, Registered Investment Advisors (RIAs), financial planners, Certified Financial Planners® (CFPs®), financial advisors, and other financial institutions and professionals. His expertise spans litigation, arbitration, defense against regulatory enforcement actions, and general regulatory and compliance matters. Andrew excels in managing broker and advisor transition matters, offering strategic guidance and counsel to advisors and brokers transitioning to independence through all stages of the process, as well as overseeing buy/sell transactions of varying sizes. He frequently advises financial professionals on transitioning their practices and resolving solicitation and non-compete issues.