Has anyone been required to sign a non-compete for a post-MBA Sr. Associate/VP position? Basically the agreement would not let me join a similar PE firm or any company remotely related to any portfolio companies for a significant period of time post-employment. Is this market?
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My sample size is low, but I have never heard of that. What's significant? 2 years?
Post MBA, Consult., 6 mnths
Are non-competes even effective with good lawyers? Just curious... I've heard quite a few stories of people getting around them
Varies state to state... Definitely not effective out here in CA.
It's not uncommon, but definitely not the rule, for that level to be subject to a non-compete. Whether they're enforceable is another issue.
That said -- even if they are not enforceable, your former employer could still be a big pain in your assistance and waste a lot of your time and money trying to pursue you if they so choose.
Waiving Non-Compete at Jr. Level (Originally Posted: 02/25/2016)
Hey All - wanted to get your thoughts on my situation -- this may be more of a legal question, but I figured worth starting here as well.
I've been at my new firm for about 6 months, and while I'm enjoying the switch from an industry standpoint, the culture and work environment is particularly bad. I won't be overly dramatic, but the work environment/people are such that it has started to effect my general well being (nothing too serious) with a general dread of coming to the office and anxiety etc.
As I said, I love the industry and this is entirely specific to the team I work with. I'd like to start pursuing opportunities with other firms in the industry, but my contract has a non-compete in it that basically bars me from working at any I-bank or PE firm. This is a standard clause they have in every employees' contract regardless of seniority, which basically makes it incredibly difficult for me to leave the firm.
Does anyone have experience with dealing with a non-compete and/or having it waived. I'm the most junior level at the firm (entirely dealing with private companies), so it isn't as though I have clients/investors/etc or any deep insider knowledge, as is usually the reason for having such a clause in place. The challenge is that there is no good way to know if they would waive it without asking someone on our legal team, which would basically be a red flag that I am considering leaving.
Any advice here would be helpful.
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Final bump, anyone?
Just my two cents, I'd be surprised if that is enforceable assuming you're based in the US, especially if they didn't give you options or something of value in exchange for it (i.e., paid time during non-compete period). I'm not a lawyer but I have dealt with a number of employment agreements for new employees at portfolio companies and the rule of thumb is that if the person isn't receiving something of value in exchange for the non-compete it is really hard to enforce it. I'd imagine this is especially true for someone as junior as you are.
Doubt it is enforceable but this may be something you would want to get a better opinion on. I'd imagine you probably have a few friends who are junior lawyers or in law school if you want to get a free informal opinion, but you can also go to an employment lawyer and pay some money for more concrete advice. Could be worth it just to put your mind at ease.
Both of the above are correct, especially the advice to ask a lawyer in your state to look at it. Different states are more employee friendly than others. For example, CA doesn't allow non-competes at all and I'm pretty sure if you move there an out of state non-compete is void so you could always look for new roles in CA (although I'm not 100% certain on that so don't pick up stakes and move there without looking into that). The good thing is that it's pretty easy to fight a non-compete but unfortunately it can involve legal dollars and time. Curious, how long is the non-compete for?
The more practical issue you're going to have even if it's not enforceable is that when you're interviewing and especially when a new firm is extending you an offer they're going to ask if you have a non-compete or if there's any other reason you can't work for them (or when you can start) and you'll have to say yes if you don't want to first quit and get it voided then look for a new job. And most companies aren't going to want to spend legal dollars fighting for a new hire who's tied up in a non-compete unless they're pretty senior or a rock star in their role.
First, talk to a lawyer in your state. In NY and CA, non-competes are rarely almost non-enforceable. It is in the contract mostly for "good faith" purposes. Most courts will not recognize non-competes, especially for junior /entry level staff bcs. it will be very unfair and will inhibit the mobility of people in a labor market. However, if your current employer uses some very specific proprietary techniques in research.analysis, they may be very upset about you leaving. So, this move may be more of a repetitional damage to you. Try to talk to your employer and leave on good terms.
Non-compete Agreements (Originally Posted: 01/25/2010)
I was wondering what do people normally do after leaving or being fired from a firm, if they are bound by a non-compete agreement (say 1- 3 years)?
Do they usually just chill out? Or what relevant jobs could they get? How would this look on one's resume?
In the event they do apply to another finance firm during the non-compete period, would the new firm be willing to work with the old firm to allow shortening or relaxing some of the terms of the non-compete or is this strictly taboo?
It depends. I have had 5 non-competes. One was negotiated out, another firm hired me to do a related but not similar activity. The best non-competes are very specific - try to avoid the ones that are too general and cover all banking activity.
It depends. I have had 5 non-competes. One was negotiated out, another firm hired me to do a related but not similar activity. The best non-competes are very specific - try to avoid the ones that are too general and cover all banking activity.
Non-compete - Clarification? (Originally Posted: 10/24/2013)
Hi all, I was unsure of the language in my non-compete and I was hoping someone here could clarify since I am sure someone here signed something similar. My question is, what is the "periodic rate" in the language below? Thanks in advance.
"The company agrees to compensate employee during the non-compete period at a periodic rate equal to ninety-five percent (95%) of on-twenty-fourth of employee's total compensation for the one year period prior to termination of employment, not to exceed $10,000 per month.
probably means every two weeks but you should clarify. I personally would never sign a one year non-compete with a comp cap of 120k...way too restrictive, especially given that norms are typically 30 days or 3 months or offer you a lot more comp
well I know the one year non compete is very standard since the other offer I receive has a 9 month non compete as well at 75% without the 10k restriction. and I will renegotiate the non-compete when I receive a raise.
Be wary of what you're getting into. Even a 9 month non-compete is a real roll of the dice. Are you signing with a bank or a bucket shop? If there's an upfront they're giving you & your base salary is north of $100k, it will be tough to kill the terms in the contract if things don't work out.
A Non-Compete Agreement may be a vital tool to guard the interests of an employer. Now, what exactly may be a Non-Compete Agreement Consistent with the law, a non-compete agreement is under which 'one party (usually an employee) agrees not to start an identical profession in competition against another party (usually the employer).' it's also referred to as Non-Compete Clause (NCC), Covenant to not Compete (CNC), and Restrictive Covenant.
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