Non-Compete Section for IB Analysts

I've searched the forum for an answer here, but I haven't found many relevant discussions:

I've received an IB analyst offer for a boutique firm that specializes in financial services. The employment agreement contains a non-compete section which would bar me from working in FIG at another investment bank for 2 years after leaving the firm. This seems to be overly restrictive for an analyst. The firm has advised me that this section applies to all levels (i.e. analyst through director) and is non-negotiable. The 2 year non-competition period is unpaid, as well. Given that, I'm wondering how enforceable something like this would be in the event that I did find an opportunity with another financial services group in the future.

Any thoughts would be appreciated.

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (14)

  • Intern in IB-M&A
Aug 10, 2021 - 4:22pm

Do not accept the offer, literally no one does that and even MDs do not have to sign NDAs. This is a huge red flag, I repeat do not accept the offer and tell them to suck a dick

Aug 10, 2021 - 4:37pm

Seems like it is highly enforceable if you sign the contract. Further, don't see a scenario where you should be too concerned about this. If this is the best analyst offer you have, take it, and if you need to lateral, just join a different industry/product group. 

Learn More

300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.

Learn more
  • Intern in IB - Gen
Aug 10, 2021 - 7:03pm

This is terrible advice, don't take the offer - huge red flag

Aug 10, 2021 - 7:09pm

Other posters are right, it is a huge red flag and you should stay away - says a lot about the firm.

Having said that, these clauses rarely hold up in court as they directly impact your livelihood. Have taken legal advice on this matter and 99% certain they can't do anything if you go to another FIG shop. Reeks of poor culture tho.

Aug 11, 2021 - 2:00pm

It's tough, because I do have an interest in the vertical and don't want to stifle opportunities down the road in the same sector. I've had great conversations with people in the group, though. Would it be worth paying a lawyer to look at this? Or trying to speak with someone at the MD level about it?

Most Helpful
Aug 12, 2021 - 8:00pm

Honestly, the decision is on you to make. I would assess what other opportunities you have available to you, how competitive your profile is and where you see yourself in the long run. What happens 2 years down the line when you want to exit? Can you go straight to PE/HF/CorpDev?

Honestly I would say legal advice not worth the money at this stage, but again it's your career you're playing with. Would also check where other Analysts/associates went from the boutique. If you had a good feel of culture, might just be the legal team on a power trip.

Aug 11, 2021 - 1:57pm

HR mentioned the section was standard for all employees and was non-negotiable. I turned down another offer for this one, and I don't have any more in the pipeline, but I still don't think it would make sense to sign something like this.

Aug 10, 2021 - 9:09pm

It doesn't really matter if it is enforceable or not. If you were an MD, that would be a consideration, but you likely don't have the resources make such a fight worthwhile. I would  take the offer unless you have others. You can always find a job outside of FIG IB as an exit...work for a financial institution, work for a PE firm, work for a different IB group etc. I would not say that the presence of a non-compete is a red flag in the sense that it says the firm is terrible or abusive or something. For all we know, they just hired some new in-house counsel who wants to make a name for himself within the leadership etc. I would be more worried about an NDA than a non-compete, though the non-compete limits exit ops in a much bigger way, obviously. 

  • Associate 3 in HF - Other
Aug 11, 2021 - 2:37pm

In tempore laboriosam fugiat blanditiis beatae dolor vero nam. Quaerat accusamus praesentium est voluptatem quas velit voluptatem. Ut quo sequi omnis minus provident dolorem veniam.

Eaque ipsam et tempore ducimus. Et fugiat aut sit laboriosam aut.

Blanditiis velit in voluptatem id recusandae pariatur accusamus. Nihil quibusdam velit non. Ea fugit consectetur facere voluptatem consequatur possimus laudantium. Error praesentium unde vero veritatis consequatur pariatur impedit. Rem omnis est mollitia quo. Eveniet quis veritatis aut laudantium dolor at.

Start Discussion

Total Avg Compensation

November 2021 Investment Banking

  • Director/MD (10) $853
  • Vice President (40) $360
  • Associates (236) $235
  • 2nd Year Analyst (144) $156
  • 3rd+ Year Analyst (34) $154
  • Intern/Summer Associate (107) $146
  • 1st Year Analyst (514) $136
  • Intern/Summer Analyst (394) $84