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New York may ban noncompete employment agreements and Wall Street is not happy

fortune.com

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Re: New York may ban noncompete employment agreements and Wall Street is not happy

#71

Post by matwood »

vgatherps wrote: post #26

Quant firms at least are one of the few places where noncompetes can make sense. It's an extremely IP sensitive industry with stupendously high pay where the employee is going to someone probably competing very directly with you, for the same/similar opportunities. Actual code + NDAs banning literal reimplementations of stuff aren't that valuable, the knowledge and ideas will stay in the head of the employees. The tw…

Non-competes have only ever made sense where the employee is compensated for signing. Codifying this change would immediately make companies stop with blanket non-competes, and only have them on key people.

While not impossible, non-competes without compensation are already hard to enforce as judges don't look kindly on preventing people from earning a living. The problem is the asymmetry of power let companies bully and intimidate ex-employees.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#72

Post by vgatherps »

infairverona wrote: post #48
bachmeier wrote: post #39

Earlier quoted context omitted.

> Quant firms at least are one of the few places where noncompetes can make sense. It's an extremely IP sensitive industry with stupendously high pay where the employee is going to someone probably competing very directly with you, for the same/similar opportunities. So the solution is that employees should only be able to work for one employer in their career? I wouldn't disagree with this argument if the noncompete…

I feel like the solution is to force the company to pay full TC (average of previous years + inflation or something?) for the duration of the noncompete.

> I feel like the solution is to force the company to pay full TC (average of previous years + inflation or something?) for the duration of the noncompete.

It absolutely has to be something like this at a bare minimum. The whole "We pay full base" argument is nonsense when the TC is multiples of base.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#73

Post by amadeuspagel »

vgatherps wrote: post #26

Quant firms at least are one of the few places where noncompetes can make sense. It's an extremely IP sensitive industry with stupendously high pay where the employee is going to someone probably competing very directly with you, for the same/similar opportunities. Actual code + NDAs banning literal reimplementations of stuff aren't that valuable, the knowledge and ideas will stay in the head of the employees. The tw…

Isn't the same true for SV companies, and aren't they doing fine without noncompetes?

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#74

Post by vgatherps »

matwood wrote: post #71
vgatherps wrote: post #26

Quant firms at least are one of the few places where noncompetes can make sense. It's an extremely IP sensitive industry with stupendously high pay where the employee is going to someone probably competing very directly with you, for the same/similar opportunities. Actual code + NDAs banning literal reimplementations of stuff aren't that valuable, the knowledge and ideas will stay in the head of the employees. The tw…

Non-competes have only ever made sense where the employee is compensated for signing. Codifying this change would immediately make companies stop with blanket non-competes, and only have them on key people. While not impossible, non-competes without compensation are already hard to enforce as judges don't look kindly on preventing people from earning a living. The problem is the asymmetry of power let companies bully…

I mean yeah that's the point I made? FWIW, trading firm noncompetes are almost always compensated with the base salary and they're still blanket applied. A major contributor is that the employer is only paying a fraction of the true employee compensation, making it easy to blanket apply and creating a form of golden handcuffs.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#76

Post by jampekka »

vgatherps wrote: post #26

Quant firms at least are one of the few places where noncompetes can make sense. It's an extremely IP sensitive industry with stupendously high pay where the employee is going to someone probably competing very directly with you, for the same/similar opportunities. Actual code + NDAs banning literal reimplementations of stuff aren't that valuable, the knowledge and ideas will stay in the head of the employees. The tw…

Of course can be beneficial for individual companies, isn't hoarding up IP an impediment for progress in general?

In this specific industry tough one could argue that impeding progress is a good thing for the wider society.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#77

Post by jmyeet »

Here's my stance on noncompetes: I'm fine with them as long as the employee is compensated sufficiently.

Wall Street firms will often have 12 month noncompetes but you get paid for that year. Details matter however. Like you might be paying for health insurance (COBRA). You won't be getting any bonus. Any bonus money in the fund gets removed and put into treasuries, which in some years may have a better performance so that's a mixed bag.

If Wall Street wants noncompetes, the employee should get paid 1.5 times the annual average total compensation they had for the previous 2, 3, 4 or 5 years, whichever is best for the employee.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#78

Post by GuB-42 »

The article doesn't address what I think is the most important aspect of noncompete agreements: compensation.

In France, and I believe in many other places as well, you can't have a noncompete without proper compensation. Compensation is relative to how it will affect the former employee career, it is usually less than a full wage, but it can be that if it makes finding a new job particularly difficult.

There have been a trend at one time of bullshit noncompete clauses that were too broad and didn't come with compensation, these are not enforceable. If they tried to sue the employee (they don't), they would be laughed off by the judge.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#79

Post by xvector »

vgatherps wrote: post #69
saagarjha wrote: post #37

Earlier quoted context omitted.

What kind of sensitive IP do quants have? How is it different than the tech industry?

Most tech work is not particularly novel at a technical level. Very few services have any sort of massive advantage in the technical IP. Some of them might have advantage in customer/data analytics, but most advantage is in the idea itself as well as being gaining the market and brand. Another firm can't just go "Ah, today we'll knock out X new app and take 50% of the market" This is not true in trading. If I go take…

Why is that the employee's problem? Pay the employee well and they will stick around.

Re: New York may ban noncompete employment agreements and Wall Street is not happy

#80

Post by infecto »

izacus wrote: post #68
infecto wrote: post #56

Earlier quoted context omitted.

General strategies of trading on financial markets. Entirely different than working at Google.

And what benefit does the economy and society get by allowing monopolization of these strategies by a single company at the expense of basic right for workers to switch jobs to the ones that pay them the most? It sounds so profoundly anti-capitalist - if the knowledge of certain strategy is so important, the employee should be retained by paying them more and giving them better perks instead of enforced labor contrac…

I am not defending for or against not sure why you replied to me.

But I think it is slightly silly reading your statements knowing that the individuals in that hyper specific industry are top earners already and educated to know what they are signing up for.

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