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Employment Skirmish Heads to Arbitration

A hearing held May 1 on a request by Scudder Kemper Investments of Boston for a preliminary injunction against Robert Hoffman, Scudder's former managing director, gave no clues as to the possible outcome of pending arbitration between the two parties, according to an industry lawyer.

The outcome of arbitration is often won or lost in preliminary hearings, but Judge Alvin K. Hellerstein did not appear to take sides in the Scudder case, said Nancy Shilepsky, an employment lawyer with Perkins, Smith & Cohen LLP of Boston. Instead, the judge issued a preliminary injunction that looks very similar to the temporary restraining order initially issued against Hoffman, she said.

"I don't think the judge is favoring one side or the other," said Shilepsky. "The parties have agreed to a status quo situation and there appears to be an agreement to an expedited arbitration."

The terms of the preliminary injunction, however, are more general than the temporary restraining order and allow more communication between Hoffman and Scudder employees.

"It seems to me that what you are divided on is the extent of permissible communications that can occur between Mr. Hoffman and various employees of Scudder," Judge Hellerstein said, according to a transcript of the hearing. "Clearly if the Scudder employees solicit Mr. Hoffman, Scudder can't complain ..."

If there are any infractions of the preliminary injunction, both parties have the right to bring the matter back to Judge Hellerstein for a decision, according to the hearing transcript.

Hellerstein's availability to both parties and his decision to remain neutral on the issue, allowing the matter to be settled in arbitration, is rare, said Shilepsky.

Scudder filed a complaint in U.S. District Court April 17 alleging Hoffman violated terms of a separation agreement he signed with the firm by hiring former Scudder executives Suzanne Twitchell, a former vice president of institutional marketing services and Christopher Coleman, a former senior vice president and manager of large-cap listed trading. Hoffman left Scudder to start his own money management firm and hedge fund.

But both Twitchell and Coleman approached Hoffman regarding possible employment, according to Laura Schnell, Hoffman's lawyer.