Noncompete clause

Hi there,

I just started a 3-months internship in a hedge fund today and they gave a good amount of papers to "read" and sign. As it's a quantitative hedge fund their intellectual properties are extremely valuable and they want to protect them as much as they can. I understand.

It says that I shall not work for any other quantitative hedge fund t in the US, Europe, Australia or Asia within 12 months of the end of my employment. Not to mention the don't-steal-our-clients-clause which lasts 24 months.

How reasonable does it sound to you? I'm really not sure that it is worth being locked up a year for a simple 3-months internship.. Are noncompete clauses usually that harsh?

Thanks

Employee non compete

You should consult an attorney when you have questions about a legal document. Employment contracts are legally binding and employment law varies from state to state. Consider using a service like findlaw.com to find an attorney in your area.

from certified user @Dingdong08"

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 tim

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Comments (11)

Nov 30, 2011 - 12:56am

Company A and Company B are rivals

Company A is a hedge fund that outclasses Company B because of their strategies. ROIs are out the roof.

Company B sees Company A making bank and hires a college student to get an internship at Company A to learn their tips and tricks.

Company B hires Company A's intern once he gets out of the 3 month internship.

Pays Intern 1.5x what Company A offers to keep the intern for the intellectual property.

See...I'm pretty sure things like that happen and the difference between comp A and comp B is only their intellectual property and talents.

point is, if there were no noncompete clause everyone would be hopping around like hot potatoes and the company that gave the internship would have to pay the intern higher pay to keep him from joining company B.

Man cannot remake himself without suffering, for he is both the marble and the sculptor. -Dr. Alexis Carrel
Nov 30, 2011 - 2:27am

Actually, it's extremely reasonable for the most part. I am certain that if you are concerned about the work restriction, you can ask for the term to be amended to cover you until graduation, however it's not crazy.

I would, however, have a lawyer look at it if you are concerned.

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Nov 30, 2011 - 5:19am

Cartwright, actually that's wrong. It is quite enforceable, however the employer can choose to not enforce it if they so choose.

Nov 30, 2011 - 7:37pm
Frieds:
Cartwright, actually that's wrong. It is quite enforceable, however the employer can choose to not enforce it if they so choose.

Highly dependent on the state (banned in california...including if you are subject to a NCA and move to california).

Reasonableness is the general standard.....i don't think you're going to find many judges who enforce an NCA on a 25 year old (whatever) thus preventing them from gainful employment...as was the decision in my own case, and that of a friend who left another firm.

Executives are a different case but the reasonableness standard still governs (in most jurisdictions).

Nov 30, 2011 - 9:45am
nonos:
...It says that I shall not work for any other quantitative hedge fund in the US, Europe, Australia or Asia within 12 months of the end of my employment...

Dude, work there and then start a Quant Fund in Canada, New Zealand, Brazil, Argentina, or the Bahamas. You're good to go.

“Millionaires don't use astrology, billionaires do”
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