How do non competes work at a multi-manager like MLP/Citadel/P72/BAM, etc?
- Do everyone who leave get non-competes or do they selectively choose the individuals who get non-competes?
- If you're let go, would you get a non-compete?
- In the exit interview, will they try to find out where you are going before deciding whether or non to enforce a compete? How do you navigate around this? (ie: I want to go to a tech company or go to school or travel for 2y, but want to get paid)
Are you a quant or a discretionary analyst/PM? I can only speak to the former, and my understanding is that quant non-competes are much more aggressively enforced.
The way it works is: you sign an agreement when you first join granting them the option to enforce a non-compete when you leave, and often waive some of your ability to fight it legally by agreeing to resolve disputes through arbitration. Everyone signs this, with basically no exceptions. When you leave, there is technically some discretion around how much of the non-compete to enforce, but in most cases you should expect to serve the whole thing.
Getting fired is usually an exception to the above. Unless you have been there for a long time or have learned something very valuable about their process, it's pretty difficult and not worth it to enforce a long non-compete (>=1year) if you are terminated. So they will usually let you off the hook with a reduced term, maybe 6 months, if you are let go shortly after joining. That being said, I have seen people get screwed here, so I wouldn't make any hard decisions assuming this will be the case.
Sometimes, but in general you will just get paid either way. I have heard some places are starting to discount garden leave comp if you get another job, as many people have abused the tech company loophole to double-dip in recent years. In general though it doesn't matter what you tell them.
What the above poster said mostly covers it. One thing to note is that non compete laws are state dependent AND they do not always require payment for the non compete period.
I also agree with the above, but I've seen people get fired and still have their non-competes strongly enforced.
Agree. Lastly, for the love of God, in matters like this, dont be cheap and get yourself an employment attorney so you have professional advice. Blows my mind how people make decisions on important stuff like this based on online forums.
Yeah, many shops don't really distinguish between leaving and getting fired, and enforce the NC either way. Most will pay the base salary, but a few will not. You only find out on your last day what the exact terms are. You should always get legal advice, and don't assume anything beyond what is on your employment letter.
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1) Often less stringent than researchers but can be long as well. Varies a lot depending on firm and role; if you just write market data parsers you might get away with less, if you work closer to a direct revenue stream you're more likely to be made to sit out a while. Switching industries seems much more common for devs, for obvious reasons.
2) As an example: joining somewhere, being exited very quickly, and serving a non-compete much longer than their tenure at the firm. Definitely does happen.
3) I really want to emphasize that it's not worth it to try to be slick here. For a while, yeah it was possible to take a job in software and collect two incomes during garden leave, but if they're cracking down on this and it's in your contract I wouldn't count on it anymore. The NC comp is usually quite generous if the term is long, plus from what I've heard if you make less at your tech job, they may still make you whole. And yes, they will likely be able to find out if you are playing games. Some firms have a lot of experience navigating these non-competes and have a very strong interest in setting precedent that they'll be enforced.
Agree with everyone above on getting a lawyer, but it's more about understanding what you're getting into than expecting them to work miracles for you. Honestly I think a lot of non-competes are technically not enforceable but just aren't worth it to fight. If you're not getting paid like the posters above mentioned then maybe it's easier, but I haven't seen too many situations like that, especially not at the kind of firms that are known to heavily enforce long NCs.
Anyone know if going to an accelerator (like to work there not in the program) would count as going to tech (OK) or finance (NC)?
Non competes are empolyer enforced.
Citadel - they always enforces their non-competes, the cost doesn't matter to them. If they let you go, they still enforce it. If you are very close with the management, and you can work around this by explaining what you are doing in the tech world has nothing to do with what you are doing at your current job then perhaps middle ground is achievable. Just never seen this happen. This is not the same for other shops.
The shops like MLP they sometimes choose not enforce it to reduce cost down when they don't believe losing IP makes any difference. Their notice is like 1 to 2 weeks or something and sometimes that would be it.
I don't know about the rest of the shops.
You don't have to and it is advised that you don't tell them where you going next if the aim is to get fixed salary locked down so you can travel for a bit. If the aim is opposite, trying to reduce the NC down so you can get on with another job, then you can try. Get your next tech empolyer write a full spec of your expected job role and expected deliverables. This then need to be signed off by the fund, Citadel is notorious going after people just to keep precedence and running tight ship.
Does anyone know if it is necessary to divulge your new company if one is willing to go through the non-compete period?
my contract had a clause saying that I need to disclose the name of a company making me an offer
As someone who recently talked a lot to lawyers about non competes and this kind of stuff. If you go from being say a Quant trader at citadel to a software engineer at Facebook, citadel would not be able to argue that Facebook is a competitor. There is no legitimate business interest to protect. So you should be able to join Facebook during the non compete. But of course you cannot move to a new firm during your notice period or gardening leave as you are still an employee of citadel and they still pay you even if you dont have to go to office anymore. So it really depends how non compete and notice period are structured. I have a six months notice period and then six month unpaid non compete, which really sucks...
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Check your deferred contract too. Sometimes you're deferred mandates a non-compete. That means they can fire you, not pay you the non-compete, and you still have to sit out to collect your deferred
Bumping this thread Is it possible to state you are going to a competitor and go to grad school instead to collect the income? I see there's a response above about one person's non compete that specifically required disclosure of where you are going to next, but mine does not have that.
Would really help to offset the income hit of grad school...
Thanks all
Of course it's possible. It is also possible that when they find out years later, they come after you and sue you and it's all publicly in the open and it hits your reputation and thus your career prospects. And you'd have to return the money, obviously.
That's the practical side. I could talk about the ethics, but guessing you already know and not too interested.
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