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ETwode


Total Posts: 2
Joined: May 2017
 
Posted: 2019-10-10 19:05
Looking for entry-level QR/trading roles out of undergrad, I've been encountering many shops with very long non-competes, on the order of 18-24 months. I understand the need to protect IP and how easy it is for someone junior to walk out the door with others’ work, but this seems like a pretty big ask.

How do people handle being caught in something like this if/when they leave the firm? I imagine it’s quite difficult to find another quant job if you need to sit out for so long, especially if it's early on in one’s career. Does it make the most sense to just find work in another industry (technology etc.), or are people actually able to come back from it? And is this standard now for strong places, or is it really as big of a risk/red flag as it seems?

automator


Total Posts: 6
Joined: Jan 2009
 
Posted: 2019-10-11 00:50
Best to accept the idea that your prospective employer strongly prefers you never work in industry again.

This is not an uncommon desire for successful shops.

I can suggest 3 strategies to deal with this:

1) Have a backup career plan outside of buy side trading.
2) Be so successful at your chosen firm that an unpaid or low-paid 24 month sabbatical becomes a well deserved break, rather than a financially crippling event.
*or*
3) Pick a firm with people you connect with. So even if #2 isn't practical, you at least enjoy going to work every day, and they enjoy your company enough to keep you around.

Jurassic


Total Posts: 265
Joined: Mar 2018
 
Posted: 2019-10-11 09:33
I swear Cubist is 6 months and thats supposedly a top shop, so not all.

deeds


Total Posts: 449
Joined: Dec 2008
 
Posted: 2019-10-11 10:47
In my understanding and experience, unless you misbehave when you leave, or are a rockstar (not saying you're not or won't be), most states in the US won't enforce unduly punitive non-competes under the broader principle that it isn't just for a firm to be able to deny a former employee reasonable access to a career in their chosen trade...in a suit it can be demonstrated that the non-compete has a negotiated value and that rarely equals lifetime incremental salary. I had heard the same when i was in the UK.

EDIT: advice to have broad networks is essential...if you move it's good to move to a place that would have your back if you start receiving letters from lawyers

tbretagn


Total Posts: 280
Joined: Oct 2004
 
Posted: 2019-10-11 11:35
I saw someone who had been moved inside Citadel as a junior in their systematic team and hadn't realised the new contract signed came with a 9m non compete (so 12m with notice period).
We were looking to hire that person for a non quant HF but 12 months was just too long.
So beware about that when you sign.
The bigger ones will enforce the non compete, because they don't really care about keeping a good relationship with people who want to leave.
(i'm talking non quant HFs)


Et meme si ce n'est pas vrai, il faut croire en l'histoire ancienne

sharpe_machine


Total Posts: 28
Joined: Feb 2018
 
Posted: 2019-10-11 12:40
In the case of Citadel, you are paid a very good base salary while sitting non-compete. You will have ZERO problems finding a job after this period. Also, you can work in Google/FB/Academic Lab on this non-compete. Again, no difficulty finding another job afterward.
In the case of Jane Street -- they do not have any.

Jurassic


Total Posts: 265
Joined: Mar 2018
 
Posted: 2019-10-11 12:57
@tbretagn (i'm talking non quant HFs)

Whats the point of this distinction?

ronin


Total Posts: 483
Joined: May 2006
 
Posted: 2019-10-11 14:18
Two points, really.

One, make sure that the contract says you are paid throughout the non-compete, salary and bonuses. It gives the other side an incentive to cut it short.

Two, in the UK at least, long non-competes are generally not enforceable. The courts view non-competes as a restriction to trade and contrary to public interest, and they really, really hate them. If it comes to the court, the onus will be on the employer to prove that the long non-compete is really necessary. Even 6 months for a junior would raise eyebrows. Longer than that is dead in the water - no chance.

But this is one of those things where spending a few hundred $$ for a lawyer to review before signing is money well spent.

"There is a SIX am?" -- Arthur

Kitno


Total Posts: 399
Joined: Mar 2005
 
Posted: 2019-10-11 23:47
The last I was deeply involved in English law non-competes (circa 2-3y ago) they were unenforceable >12 months and at 12 month tenors they had to be for company directors/super senior executives. Otherwise 6 months was enforceable.

"Yeh, after that blow out I bid the bonds at 76 and you hit man...You're 77/81 now? Cool man...What? Do I care at 80? No mate... I'm 73 bid now...I'm sure you didn't just load up just for me...".

Kitno


Total Posts: 399
Joined: Mar 2005
 
Posted: 2019-10-11 23:49
Also in my shop I use asymmetric notice periods... aside from non-compete.

So X tenor notice for employee, Y tenor notice from us, Z non-compete post either X or Y tenor.

"Yeh, after that blow out I bid the bonds at 76 and you hit man...You're 77/81 now? Cool man...What? Do I care at 80? No mate... I'm 73 bid now...I'm sure you didn't just load up just for me...".

ETwode


Total Posts: 2
Joined: May 2017
 
Posted: 2019-10-12 02:52
Thanks for the color everyone.

The sentiment that these are generally not enforceable if >12 months is in line with what I've heard from lawyers. However they also say it is often too expensive to fight as some firms are willing to deploy considerable resources against you. Even if you would eventually "win", it can be dragged out for a while or can bleed you out financially.

Looking around on LinkedIn it's easy to find people sitting out much longer than this, which kind of suggests fighting isn't optimal - any actual examples of things playing out this way? Regardless I'd also be very uncomfortable morally agreeing to an NC with the intention of disputing it if the situation arose, but maybe that's just naive.

It's true that you are paid during the non-compete, but the career impact is much more concerning to me. Seems like one could very easily find themselves forced out of the industry if they come up any short of being a "rockstar" at their first gig.

I am in the US FWIW.

ronin


Total Posts: 483
Joined: May 2006
 
Posted: 2019-10-14 18:03
@etwode,

In all seriousness, there are may good reasons to think hard about whether the career in quant trading is worth it these days.

But "will my career be ruined by a non-compete" isn't even in the top ten. If that is your only concern, relax.

"There is a SIX am?" -- Arthur

Jurassic


Total Posts: 265
Joined: Mar 2018
 
Posted: 2019-10-14 19:08
@ronin statements like this always beg the question. why not? what are these 10 reasons

gaj


Total Posts: 51
Joined: Apr 2018
 
Posted: 2019-10-15 01:58
I don't see why non-compete would ruin your career. Most people I know have worked in more than one shops and they do sit out the non-compete period. It's completely normal and the future employer knows it.
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