331–340 of 407 posts
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…
For those unaware: Quant = quantitative analyst
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…
> It's an extremely IP sensitive industry I know this will not resonate with some, but on some level I do not really subscribe to the idea of intellectual property. My personal belief is that the brain is more like a radio receiver. The ideas are floating out there for anyone to pull down. The more sensitive among us are able better able to hear what is there and report it back to the rest of us. To claim ownership o…
You have to be a saint or already have everything you could ever dream of
Earlier quoted context omitted.
Quant firms have already adapted years ago. Now they don't have 6-24m non-competes anymore, but 6-24m notice periods. You're paid full salary (incl bonus) but you don't work ("gardening leave") and obviously can't work for a competitor (because you can have a non-compete while you're employed).
So what's the incentive to keep working under those conditions?
Earlier quoted context omitted.
Because they own the trade secret. For example, they have the legal right to license a trade secret; an employee does not. It's about legal ownership of intellectual property. As a corollary, you may read a patent and now have the knowledge of a product. But you don't have the same legal right to create and sell that product. That right is protected by the patent owner.
Of course, that line of thinking involves the inevitable follow up: when is something a “copy” vs a “genuine invention”. If company has a patent on making widget A, how different does a previous employee who leaves and makes widget B have to be before it’s not considered a violation? I am no expert here but my understanding is that the case law around this is much more well trodden in patent land than it is for nonco…
If it's truly patented (different from a trade secret), you can't produce it, even if your invention is slightly different. For example, if I hold a patent on a "car" and you make a "car with a radio," you still can't produce it because it infringes on my patent. You can't make your product without covering the totality of my claim. That's why people try to make patent claims as broad as possible.
Non-competes should, at minimum, be banned for anyone not making in the top 10% of salaries.
Also, if the employee is laid off then it is not enforceable unless the company pays the ex-employee during the term of the non-compete the difference between what they had been paying them and whatever the employee earns in whatever non-competing jobs they take during that time.
For consultants as opposed to employees to be enforceable the contractor has to be earning $250k (again in 2020 dollars).
The law also has something to say about employers that don't want to let employees have other jobs, or do contracting, or do self-employment. Employers can only prohibit that if the employee is making at least twice minimum wage, unless that other work could cause safety issues or interfere with the reasonable and normal scheduling expectations of the employer.
Earlier quoted context omitted.
Because they own the trade secret. For example, they have the legal right to license a trade secret; an employee does not. It's about legal ownership of intellectual property. As a corollary, you may read a patent and now have the knowledge of a product. But you don't have the same legal right to create and sell that product. That right is protected by the patent owner.
That’s not a very good example. A patent is available to read specifically because the discoverer has entered an agreement with the government to share the relevant information in return for exclusive use for a set period of time. If they had not patented whatever it is they had, anyone could replicate the information/item in question with no penalty.
Sure, I suppose someone could develop/copy something in parallel with no knowledge. But that's not really the case in the discussion here as it comes to former employees.
If you worked for Company A which uses a proprietary algorithm for trading and somehow created the same for Company B later, would you really expect a jury to think the two are unrelated? As stated above, the threshold is "more likely than not" that your work for Company B is related to knowing the trade secrets of Company A. If you had never worked for Company A, maybe, but again that's not the case here because a noncompete would never enter the picture.
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> 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. Cry me a river. If knowledge of some particular employees worth so much to the quant firms, then they should pay them not to leave accordingly.
Employees don't hold ownership of that intellectual property, though. You're speaking almost in terms of a moral right; IP rights are legal rights of convention. An employee isn't entitled to them in the same way.
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…
> It's an extremely IP sensitive industry I know this will not resonate with some, but on some level I do not really subscribe to the idea of intellectual property. My personal belief is that the brain is more like a radio receiver. The ideas are floating out there for anyone to pull down. The more sensitive among us are able better able to hear what is there and report it back to the rest of us. To claim ownership o…
Likewise, trade secrets are a mechanism to help foster better (and fairer) commercial practices under the guise that society will benefit. It's a pragmatic take rather than an idealistic one.
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…
This particular suggestion breaks down fast when you have multiple employees that need to collaborate. If you have a million dollar strategy, you can pay half a million to an employee as a retention bonus. But you can't pay half a million each to 8 employees.
Earlier quoted context omitted.
Employees don't hold ownership of that intellectual property, though. You're speaking almost in terms of a moral right; IP rights are legal rights of convention. An employee isn't entitled to them in the same way.
Right, and you don't need a non-compete to go after former employee stealing your IP.
The OP was about how non-competes make sense in an IP-intensive field, like quant finance. The reason is that these contracts help protect the IP by explicitly stating their case. Your comment goes against the very foundation of IP law: creating reasonably fair commercial opportunities. If I can extort you because you hired me and I learned your secrets, I think that pushes the scales beyond "reasonable."