Is this the Mets year?
The Mets are playing really well im wondering if this is their year. What do you guys think? Let me know in the comments below.
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Not enforceable but see an employment attorney. Mine has a fairly punitive one and I was told it's not enforceable.
but noncompetes for senior level employees are enforceable? didn't know that noncompetes differed based on seniority. i just thought that junior ppl didn't have to sign noncompetes.
Enforceability varies by geography (e.g., not enforceable in CA) from a legal standpoint. Further, a firm is very unlikely to pursue legal action against an associate versus may take more issue with a more senior departure.
Finally, even if not legally enforceable, they can threaten to alter/rescind one's carry (again, more relevant for senior departures) which may be a worse outcome than legal action given materiality of money on the line.
Enforceability does vary based on seniority because a noncompete typically needs to prove that you have some sort of material knowledge or connections that would harm your former employer by joining a competitor. It's why McD can't put a noncompete on its restaurant employees.
Also your employer in general would not come after you. But if they did, you would almost certainly prevail in court.
Agree hard to enforce and carries minimal teeth (assuming you don't have any carry or co-invest to hang over your head).
Why in the world would you sign a non compete for a PE Associate role?
Offer letters / fund docs are typically non-negotiable, especially at junior levels where you have no leverage. I don't blame OP. Their firm clearly takes an off-market stance here, but it's not like OP was going to turn down the offer over the clause...
Good point and certainly put OP in a tough spot. Just seems like a red flag given how uncommon it is at the associate level, especially if no carry involved
You’re going to be fine. For it to be enforceable, they’ll need to pay you for the time you’re under the non-compete, even if you’re no longer working. Most firms will waive the non-compete unless you actually have valuable information or access (doubtful), and even then most non-competes aren’t enforceable. Gets tricky when you have vested carry but assuming you don’t, you are unlikely to be locked out by this. Furthermore, you can always ask your future employer to push your start date back 3 months to account for the non-compete. Some firms will do this, depending on need.
Thanks for the insight. How does your answer change when you consider vested carry? Certainly the overhang of having that carry clawed back...
Read your carry document closely. If your carry is tied to non-compete it could be a problem. I've usually seen non-compete/garden leaves tied to employment contracts, not carry documents.
Hit up Lina Khan at the FTC
OP, how long is your non-compete? This shouldn’t be a hurdle for your recruiting efforts, unless you are getting paid while you sit-out. At your level, the non-compete is smaller than a senior partner at the firm.
Was let go along with the broader team May 2024. On non compete and getting paid until Dec 2024 along with 2024 bonus number already communicated and guaranteed to be paid March 2025 for the 5 months I was employed this year. I signed the offer letter at the time of hire because of above market comp and better location (relocated from West Coast to NY). AVP in Private Credit.
Looking at a terrible job market and not sure what to expect come Jan 2025.
You should also think about how much carry you might actually be giving up if you had to. If you're an Associate, I doubt your carry is worth that much (relatively of course), especially if you're not fully vested, and very questionable on when carry may even be paid out (if at all if bad fund performance). It's one thing if your DAW is worth a few million dollars (e.g., VPs and up), but I've never seen Associate carry be worth that much (and Associates are rarely fully vested if they were only at the firm for 2 or 3 years). I've seen Associate carry be worth a few hundred thousand assuming fully vested (like ~$200-$300k give or take based purely on my anecdotal evidence), which really means probably closer to like 50%-60% of that is actually vested. And then after taxes, you're really not talking about that much money. If we're talking like $50-$200k of post tax value of carry, it would be most likely pretty silly to change how you'd recruit now (i.e., lateral to another PE shop if that's what you want) over potential lost carry, that may or may not be paid out over the course of like 7-10 years.
Overall, could there be some negative consequences of you lateraling to another PE shop? Certainly possible, no one can guarantee nothing will happen. But it's worth thinking about what is the actual practical risk of them going after you, and even if they do, how much are you actually giving up. If you're unhappy and/or there's no future for you at your current PE shop and you find another one you think you can stay for a while, then sacrificing some Associate carry for VP carry is worth the financial trade off; in addition to what is probably more important that you have a firm you can see yourself staying long(er) term. Your career is a long one, there's no reason to knowingly take a "lessor" career option (based on what's beneficial towards your unique goals in life) if it's going to hurt you in the long-term even if there are some consequences in the short-term (I don’t just mean financially, I mean what you want out of your career/life overall).
(If it's any solace, sooner or later most PE professionals will be giving up some kind of carry - whether it's from clawback on vested carry or just foregone unvested carry. Anytime you switch firms or leave the industry, you're giving up some kind of monetary value and that monetary value is much worse as you get senior. Golden handcuffs are a real bitch, but such as life.)
Work at a UMM tech fund. in my case they agreed to waive off everything except non compete tied to carry, which is non negotiable, pretty long, and unpaid. Quite unfair but as the commenter above said, not the end of the world for the right role. You can also ask your new firm to backfill your carry
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