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OxbridgeGrad
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Joined: May 8th, 2009, 4:16 pm

how enforcable is my UK non-compete?

May 10th, 2009, 8:04 am

I work for a UK based firm as a quant trader and have a 12 month notice period (paid) followed by a 12 month non-compete clause (unpaid).The non-compete clause is very general, (basically it says 'you are restricted from quantitative trading in XYZ' where XYZ is a range of different asset classes) and doesn't mention a geographic scope. Furthermore, I have been working in a silo since joining the firm two years ago so haven't been privvy to any proprietary algorithms etc. used by others at the firm.Is this likely to be enforcable in the UK if I were move to another UK based firm, and would it be enforcable elsewhere in the world specifically New York, HK, and Zurich/Geneva?
 
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chriscolumbus
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how enforcable is my UK non-compete?

May 10th, 2009, 9:05 am

QuoteOriginally posted by: OxbridgeGradI work for a UK based firm as a quant trader and have a 12 month notice period (paid) followed by a 12 month non-compete clause (unpaid).The non-compete clause is very general, (basically it says 'you are restricted from quantitative trading in XYZ' where XYZ is a range of different asset classes) and doesn't mention a geographic scope. Furthermore, I have been working in a silo since joining the firm two years ago so haven't been privvy to any proprietary algorithms etc. used by others at the firm.Is this likely to be enforcable in the UK if I were move to another UK based firm, and would it be enforcable elsewhere in the world specifically New York, HK, and Zurich/Geneva?2 years! I would like to believe it is very unlikely it would stand in a court of law, especially the unpaid months.
 
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PlasticSaber
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how enforcable is my UK non-compete?

May 10th, 2009, 11:18 am

I sometimes wonder whether those firms that impose such a draconian non-completing clause really have such profitable proprietary algorithm or just happen to have an ego out of control...
 
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DominicConnor
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how enforcable is my UK non-compete?

May 10th, 2009, 7:01 pm

According to a lawyer (who refuses to be named), this is unlikely to be enforceable in the UK because of "restraint of trade".But...They might be able to persuade a court to enforce it for (say) three months.Is your contract under English law ?If so then it does not matter where you go (except maybe Iran or Somalia), Chad has its attractions I understand.Most contracts do explicitly state the law that applies, which is almost always binding, and the default if you are in London is that English law (very probably).I have the name and contact details of a Reassuringly Expensive Lawyer who I can recommend to you if you PM me.Based upon the details you have shared I believe you need better advice than you can get from some headhunter who hangs out on the Internet.
 
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tu160
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how enforcable is my UK non-compete?

May 10th, 2009, 10:55 pm

QuoteOriginally posted by: PlasticSaberI sometimes wonder whether those firms that impose such a draconian non-completing clause really have such profitable proprietary algorithm or just happen to have an ego out of control...The reason is plain simple. The potential employer usually does not want to take any risks from you. This decrease your marketability, this allows them to restrict your compensation.The truth is that smb should be desperate to take offer with non-compete like that... but it happens.
Last edited by tu160 on May 10th, 2009, 10:00 pm, edited 1 time in total.
 
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tu160
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how enforcable is my UK non-compete?

May 10th, 2009, 10:56 pm

repost
Last edited by tu160 on May 10th, 2009, 10:00 pm, edited 1 time in total.
 
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KackToodles
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how enforcable is my UK non-compete?

May 10th, 2009, 11:01 pm

QuoteOriginally posted by: PlasticSaberI sometimes wonder whether those firms that impose such a draconian non-completing clause really have such profitable proprietary algorithm or just happen to have an ego out of control... there is nothing big in finance that is really "secret". all good ideas are pretty much industry knowledge for those willing to spend the time to learn it and you can google up papers on almost any big topic.
 
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OxbridgeGrad
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how enforcable is my UK non-compete?

May 11th, 2009, 5:15 am

QuoteOriginally posted by: DominicConnorAccording to a lawyer (who refuses to be named), this is unlikely to be enforceable in the UK because of "restraint of trade".But...They might be able to persuade a court to enforce it for (say) three months.Is your contract under English law ?If so then it does not matter where you go (except maybe Iran or Somalia), Chad has its attractions I understand.Most contracts do explicitly state the law that applies, which is almost always binding, and the default if you are in London is that English law (very probably).I have the name and contact details of a Reassuringly Expensive Lawyer who I can recommend to you if you PM me.Based upon the details you have shared I believe you need better advice than you can get from some headhunter who hangs out on the Internet.Thanks for the reply. Yes my contract is under English law so it does sound like I'll be needing that expensive lawyer so expect a PM shortly!
 
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OxbridgeGrad
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how enforcable is my UK non-compete?

May 11th, 2009, 5:18 am

QuoteOriginally posted by: tu160QuoteOriginally posted by: PlasticSaberI sometimes wonder whether those firms that impose such a draconian non-completing clause really have such profitable proprietary algorithm or just happen to have an ego out of control...This decrease your marketability, this allows them to restrict your compensation.Bingo!
 
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DominicConnor
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how enforcable is my UK non-compete?

May 11th, 2009, 6:27 am

Certainly non-competes are bargaining chips, and the idea is restrict your options making you less likely to leave in a given period.It is part of our standard advice to people we help move that they avoid saying where they are going to. Departure can be an emotional thing for team managers who often see it as betrayal in very personal times, and occasionaly try to use the law beyond normal rationality. A useful countermeasure is simply not to tell them where you're going, some people even choose to lie. You'd be just shocked how many people apparently move to risk management at Citi.KT is right about "big" secrets, but there are lots of little ones, especially in quant / algoritmic trading. Algotraders make money out of surprisinlgy small discoveries and tweaks, and typically operate in such finite sum games that a competitor using the same tweak seriously impacts performance.
 
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tu160
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how enforcable is my UK non-compete?

May 11th, 2009, 3:33 pm

QuoteOriginally posted by: DominicConnorIt is part of our standard advice to people we help move that they avoid saying where they are going to. Departure can be an emotional thing for team managers who often see it as betrayal in very personal times, and occasionaly try to use the law beyond normal rationality. A useful countermeasure is simply not to tell them where you're going, some people even choose to lie. You'd be just shocked how many people apparently move to risk management at Citi.there are problems with 'Citi risk management' approach:1. The standard additional clause in non-compete is that you must inform your previous employer about new workplace and types of activity you involved during non-compete period.2. You have to lie to new employer as well. As I said very likely they will not hire you because of potential risks. This seems to be very dangerous from legal perspective.
 
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repoman
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how enforcable is my UK non-compete?

May 11th, 2009, 4:04 pm

QuoteOriginally posted by: DominicConnorCertainly non-competes are bargaining chips, and the idea is restrict your options making you less likely to leave in a given period.It is part of our standard advice to people we help move that they avoid saying where they are going to. Departure can be an emotional thing for team managers who often see it as betrayal in very personal times, and occasionaly try to use the law beyond normal rationality. A useful countermeasure is simply not to tell them where you're going, some people even choose to lie. You'd be just shocked how many people apparently move to risk management at Citi. But if this measure fails, and they do find out where you went, wouldn't your new employer hold it against you that you did not tell them you signed a non-compete? Edit: Sorry, I didn't read tu160's post before writing this.
Last edited by repoman on May 10th, 2009, 10:00 pm, edited 1 time in total.
 
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DominicConnor
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how enforcable is my UK non-compete?

May 11th, 2009, 6:19 pm

Tu160 is right, it is a common term in non-competes, but these vary a lot more in quality than you might think.In my last job it took several months for them to get the terms right, and at one point they had banned me from working for every company in the world, and in every country except those with which we were at war.One reading banned me from working for or with anyone who had ever paid tax....but that didn't matter because they couldn't get my name right Disclosure to your next employer is a tricky one, and often best left to your headhunter (if you have a good one), since it requires presentation and timing.But I agree that you abolsutely must get them on side, and hiding it from them is a bad move.If you are required explicitly to tell your ex-employer where you went, then you should do so, but again there is subtlety in this.
 
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jomni
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how enforcable is my UK non-compete?

May 12th, 2009, 2:10 am

The thead starter is not really stuck. This can be settled through some $money$.All you have to do is to convince a potential employer that your are really good to the point that they will deal with your current employer and settle the non-compete clause.