Yes, we knowit’s the Fourth Circuit. But the typo stays in the title because (1) that’s what you asked for, and (2) legal drama deserves at least one plot twist.

If you work anywhere near financial advisor recruitingwirehouse, independent RIA, broker-dealer, or the poor soul in compliance who gets the Friday-afternoon “Quick question…”you’ve probably heard of the Protocol for Broker Recruiting (a.k.a. the “Broker Protocol”).
It’s the industry’s gentleman’s agreement: advisors can move, clients can choose, and everyone promises not to turn the transition into a cage match over client lists.

Except… a Fourth Circuit decision in Salomon & Ludwin, LLC v. Winters narrowed what “raiding” means under the Broker Protocol and, more importantly, reminded everyone of a painfully simple rule:
if your employment agreement says it overrides the Protocol, the contract may win.

Below is what happened, what the court actually did (and did not do), and what firms and advisors should take away before the next transition email gets sent from a brand-new domain name.

What the Broker Protocol is (and what it is not)

The Broker Protocol is a voluntary agreement among participating firms designed to protect client choice and reduce litigation when registered representatives move between signatory firms.
In the simplest version of the story: if the advisor follows the Protocol’s steps, they may take limited client contact information and solicit those clients after resignationwithout the old firm (or the new firm) automatically suing over that narrow set of information.

But the Protocol is not a magic cloak of invisibility. It doesn’t automatically erase:

• non-solicitation clauses you signed,
• confidentiality and trade secret duties,
• state law claims that attach to conduct outside the Protocol’s guardrails, or
• the consequences of taking more data than the Protocol allows.

Think of the Protocol like the “speed limit” sign on a highway. It helps traffic flowuntil someone decides the shoulder lane is also a lane.

The case behind the headline: a team leaves, a new firm launches, a fight breaks out

In Salomon & Ludwin, LLC v. Winters, a Richmond, Virginia wealth management firm sued former employees who left to form their own firm (later known as Founders Grove Wealth Partners). The departing group included advisors and operational staff, and the former employer alleged the team took confidential client information and solicited clients after leaving.

The former employer sought emergency relief, and the dispute quickly moved into the world of temporary restraining orders and preliminary injunctionsthe legal equivalent of yelling, “Everybody freeze!” while the court figures out what’s likely true and what might be irreparably harmful if it continues.

A key complication: both the old firm and the new firm were tied to the Broker Protocol. The departing team argued they complied with the Protocol, so solicitation and limited client information use should be permissible.
The former firm argued the team’s employment agreements and confidentiality duties still controlledand that the Protocol wasn’t a “free pass.”

The Fourth Circuit’s two big messages

1) “Raiding” under the Broker Protocol got narrowed

The Broker Protocol includes language saying it does not bar actions against a new firm for “raiding.” The catch is that the Protocol doesn’t neatly define raiding in a way that resolves every modern transition scenario.
The district court treated the mass client movement and business impact as enough to fit a raiding theory.

The Fourth Circuit disagreed with that broad approach. It emphasized that treating “raiding” as basically “clients left in large numbers” risks swallowing the Protocol’s core promisebecause the Protocol already contemplates client solicitation and client movement when done correctly.
Put differently: if “raiding” = “a lot of clients transferred,” then the Protocol starts looking like a coupon that expires the moment you try to use it.

The decision effectively steers “raiding” back toward its ordinary industry meaningmore like predatory hiring or targeting another firm’s employeesrather than simply a big wave of clients choosing to follow advisors.

2) If the contract says “we override the Protocol,” courts may enforce it that way

Here’s the part that made recruiting teams everywhere quietly reopen their employment packets.
The advisors’ employment agreements included language indicating that the agreement would control over the Protocol in the event of a conflict (even though the clause’s wording created arguments about timing and membership status).

The Fourth Circuit leaned hard into a contract-first approach under Virginia law: courts enforce the words the parties used.
And reading the provision as a whole, the court concluded the agreements controlled over the Protocolmeaning the non-solicitation and confidentiality duties could still restrict conduct, even in a world where the Protocol exists.

That’s the real “narrowing” effect on the Broker Protocol in practice:
the Protocol may be less protective when a signed employment contract explicitly says it takes precedence.

3) The new entity wasn’t automatically bound just because the people were

The court also drew a line between the individuals and the newly formed firm.
Because the new firm wasn’t a party to the individuals’ employment agreements, the court concluded the injunction should not have been entered against the new firm itself on that contractual basis.
(Important nuance: restrictions on the individuals can still limit what they do through the new firm.)

Translation: a business entity doesn’t become contract-bound by osmosis just because its founders signed something at their previous jobbut the founders can still be personally restrained, and that can shape how the new shop operates.

Why this matters (even if you think you’ll “just follow the Protocol”)

This decision matters because it clarifies two pressure points that show up in real transitions:

• Protocol ambiguity: “Raiding” is the Protocol’s litigation trapdoor. The Fourth Circuit essentially said: don’t interpret the trapdoor so broadly that it becomes the front door.
• Contract supremacy clauses: Many firms draft agreements that attempt to preserve contractual non-solicitation and confidentiality duties even when the firm is a Protocol signatory. The Fourth Circuit signaled those clauses can carry real weight.

The practical result is that “We’re in the Protocol” is no longer the end of the conversation. It’s the beginning of the checklist.

A practical compliance checklist for advisor transitions

Not legal advicejust the kind of practical roadmap that keeps people out of emergency injunction hearings.

Before resignation

• Inventory what you signed: employment agreement, confidentiality agreement, non-solicit, non-compete (if any), policy acknowledgments, equity/bonus plans with restrictive covenants.
• Confirm Protocol status: are both firms signatories at the time of departure? (And do not assume “yes” because someone said it in a recruiting call.)
• Keep pre-resignation conduct clean: avoid forwarding client lists, exporting CRM data, printing files, or “just backing up contacts.” Those phrases are exhibit stickers waiting to happen.
• Separate planning from solicitation: it’s one thing to form an LLC; it’s another to line up client transfers while still employed.

At resignation

• Follow Protocol mechanics precisely: provide written notice and limit the “Protocol list” to the information the Protocol allows.
• Do not take extra data: account numbers, statements, social security numbers, notes about risk tolerance, internal fee schedulesthese are the kinds of details that turn “transition” into “trade secret claim.”
• Return firm property: devices, files, notebooks, anything that can be framed as proprietary.

After resignation

• Solicit carefully: even where the Protocol permits contact, your contract might notand the Fourth Circuit signaled courts can enforce the contract terms.
• Document good-faith compliance: what was taken, what was returned, what was deleted, and when.
• Train the team: operational staff are often the quiet center of trade secret disputes (CRM access, account paperwork, service workflows).

For firms: what to revisit in drafting and policy

If you’re a firm (old or new) and you want less courtroom cardio, this case highlights drafting and governance pressure points:

• Be explicit about Protocol interaction: if you intend the agreement to override the Protocol, say so cleanly and consistently (and update language when membership status changes).
• Define “confidential information” with real boundaries: courts like clarity; juries like clarity even more.
• Operational controls matter: access logs, download restrictions, CRM permissions, and exit procedures can be more persuasive than dramatic accusations.
• Plan for the emergency motion: if you ever need a TRO, your internal documentation will either be your best friend or your awkward silence.

FAQ: quick answers to the questions everyone asks (usually too late)

Does the Broker Protocol automatically let an advisor solicit former clients?

Only within its rules, and only if both firms are signatories and the advisor complies.
Even then, a separate employment agreement may restrict solicitation if it clearly takes precedence.

What did the Fourth Circuit do to the “raiding” exception?

It rejected an overly broad interpretation that would treat client movement itself as “raiding,” because that would undermine what the Protocol already permits.
“Raiding” is better understood as predatory conductespecially around hiring a competitor’s employeesrather than simply losing a lot of clients.

If the new firm joins the Protocol the day the team resigns, does that fix everything?

Not necessarily. Protocol membership doesn’t rewrite private contracts, and it doesn’t immunize taking information beyond what the Protocol allows.

Why do courts care so much about the employment agreement language?

Because contracts are the parties’ chosen rules. When the contract text is clear, courts often enforce iteven if it creates an inconvenient outcome for someone who assumed the Protocol would control.

Does the decision mean new firms can’t be enjoined?

No. It means injunctions must be supported by a valid theory as to the entity (not just the individuals’ contracts).
Individuals can still be restrained, and that can limit what the firm does through them.

What’s the safest single sentence for a transition plan?

“We’re going to follow the Protocol and the contractsbecause courts follow the contracts.”

Conclusion: the Broker Protocol isn’t deadjust less magical

The Broker Protocol still matters. It’s still a major framework for advisor mobility and client choice.
But the Fourth Circuit’s decision makes two things harder to ignore:
(1) “raiding” isn’t a catch-all label for “we lost a lot of clients,” and
(2) contractual non-solicitation and confidentiality obligations can still control when the agreement says they do.

In other words: if you’re planning a move, don’t treat the Protocol as a “get-out-of-lawsuit free” card.
Treat it like part of a larger rulebookone that includes the documents you signed when you still had a company email signature.

From the Trenches: real-world transition experiences (the kind you learn the hard way)

If you’ve ever watched a transition go sideways, you know it rarely starts with villainy. It starts with optimism and a spreadsheet.
Someone says, “We’re in the Protocol, so we’re fine,” and everybody nods like the Protocol is a force field you can hold up with one hand while packing your desk with the other.
Then the tiny decisions beginthe ones that sound harmless until they’re read out loud in court.

Experience #1: The ‘Protocol List’ that quietly gained weight.
The Protocol allows a limited set of client information. But teams often work from a CRM export that includes “bonus columns” like notes, household relationships, beneficiary info, account IDs, and service tickets.
No one means to take the extras; they just don’t uncheck the boxes.
Later, when the old firm’s lawyer asks, “Why did you need account details to contact a client?” the room gets colder.
The safest transitions are almost boring: the list is manually curated, reviewed twice, and stored like it’s evidencebecause it might be.

Experience #2: The contract clause nobody read because it looked ‘standard.’
Advisors tend to read compensation sections the way normal people read restaurant menus: carefully and with emotion.
Restrictive covenants get the opposite treatmentlike airplane safety cards.
The problem is that “standard” language is often exactly the language a court enforces.
If the agreement says it overrides the Protocol, a judge may treat that sentence like the entire plot summary.
In practice, teams that win peace (or at least avoid emergency motions) bring counsel in early to map the overlap: what the Protocol permits versus what the contract forbids.

Experience #3: The new firm that thought it was safe because it wasn’t on the old contract.
It’s true that an entity may not be bound by a founder’s prior employment agreement. But here’s the punchline: if the founders are restrained, the firm’s “freedom” becomes theoretical.
You can’t build a growth plan on activities your key people are prohibited from doing.
Smart new firms treat onboarding like a compliance event: written protocols, restricted data intake, documented deletion procedures, and training for staff who touch client onboarding paperwork.

Experience #4: The emotional temptation to ‘announce’ before resigning.
The fastest way to turn a clean departure into a messy one is pre-resignation messagingespecially when it looks like solicitation.
Even a friendly “I’ll be in touch soon” can be framed as the first step in a solicitation campaign if it lines up with later account moves.
The cleanest pattern is also the simplest: resign, then communicate, then let clients choosewithout dragging along extra data or questionable timing.

The Fourth Circuit decision doesn’t change human nature. People will still move, clients will still follow relationships, and firms will still protect what they believe they built.
What it does change is the confidence level behind casual assumptions.
The Protocol is still part of the landscape, but contractsand careful behaviorare the difference between a smooth transition and a court order that ruins your next quarter.

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