Ex-Barclays Trader's Win Opens Path for Fired London Bankers
(Bloomberg) -- David Fotheringhame said he doesn’t bear grudges.
The former Barclays Plc trader, fired at the behest of a New York regulator for misusing an electronic trading program, was pursuing the longest of shots in his fight against the bank. Sitting without an attorney, facing top lawyers on the other side of a London courtroom, Fotheringhame insisted from the very outset he wanted his old job back.
The 47-year-old cut an unlikely figure as executive after executive from the bank lined up to explain why they couldn’t rehire him. They said trust had broken down, he wouldn’t be able to get the necessary regulatory approvals, and he just didn’t have the skills. But earlier this month, Fotheringhame, who in reply described himself has "hyper rational,” won a rare judgment -- a new contract for a 150,000-pound ($192,000) a year post.
Compensation after winning a traditional unfair dismissal case is typically capped at 83,000 pounds without a successful whistle-blowing or discrimination claim. However awkward it may be for Barclays, Fotheringhame’s award shows that a banker stands to gain far more by going back to work.
"Although rarely ordered and rarely applied for, this remedy is always there," said Samantha Mangwana, an employment lawyer at CM Murray in London. "In the financial industry, when people’s earnings are so much greater than the cap, the fact there could be value in pursuing an ordinary unfair dismissal case, is worth thinking about. It’s another way round.”
Fotheringhame declined to comment for this story, as did a spokesman for Barclays.
Orders for reinstatement, where the former employee gets the same or very similar job, are made in fewer than 1 percent of cases, according to employment lawyers. As a result, ex-workers often chase larger payouts by trying to show they were blowing the whistle on an abuse in the workplace or suffered discrimination.
"The best financial remedy is to go back to the work," said John Marshall, an employment lawyer at Slater & Gordon. "You’re treated like you never left, all back pay is due and you’re made whole."
Marshall said that the working assumption in the U.K. is that re-engagement is unfeasible, especially at more senior levels.
“The argument that’s often wheeled out is that we’ve lost trust in this individual and we don’t want him back,” he said. That theme played out, unsuccessfully, in the Fotheringhame case.
Fotheringhame will return as director of data commercialization, a post below his previous job, and at a salary that’s a fraction of the 1.2 million pounds he earned before. But Barclays will have to make major adjustments too, finding a way to welcome back Fotheringhame after officials said his re-hiring would be inappropriate because of his criticism of the dismissal process.
The lender has until Sept. 21 to comply with the judge’s order. If an employer refuses to accept a judgment, the fired employee can receive additional compensation.
At the hearing, Fotheringhame told the judge he would return to any job, in any division or with any responsibilities. The former trader said he didn’t hold irrational grudges.
While parts of the employment tribunal hearings had been “contentious,” that didn’t mean relationships with future colleagues would be fractious, he said.
The New York Department of Financial Services ordered that the bank terminate Fotheringhame after it investigated the Last Look electronic trading program. The agency had told the bank in 2015 to “take all steps necessary” to eliminate Fotheringhame’s post. DFS declined to comment after the court ruling.
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Fotheringhame, who was head of eFX trading, should be given a role that doesn’t require Barclays to formally certify him as a “fit and proper person,” employment judge Jill Brown said.
“It would be a change in direction for him,” she said. “It might well be appropriate for an employee to take a pay cut when pursuing a new line of employment.”
The ruling will encourage workers who hadn’t seriously considered trying to get their job back, said Glenn Hayes, an employment lawyer at Irwin Mitchell. "People tend to tick the box just to keep pressure on the employer," he said.
While re-engagement in the U.K may be almost unheard of, it’s a different story in Germany. Deutsche Bank AG was ordered to re-hire bankers accused of fixing Euribor rates and later charged by British prosecutors. The traders were improperly dismissed because the lender didn’t have processes in place to prevent conflicts of interest when submitting data to calculate interest-rate benchmarks.
Barclays may now make Fotheringhame an offer he can’t refuse, CM Murray’s Mangwana said.
“They’ve got a conundrum: if they don’t want him back they need to negotiate a package that allows him to give his job up,” Mangwana said. “Or they have to let him walk in again.”
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