I am considering interviewing for Susquehanna for QR / QT roles and was looking at their non-compete. Is a 3-year non-compete really enforced by this firm (and is it paid)? Does 3 year out of the industry not push you out of the industry as a whole? I can't imagine an HFT firm hiring someone who has spent 3 years not working as part of a non-compete. (Moving to California to avoid non-competes is not an option here)
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One year is very standard, two year is common and unfortunately starting to become more standard. I've never heard of a 3 year, though. Seems excessive. Definitely a big reason to refuse that job unless they're paying very very well.
Definitely make sure the agreement is paid very well, and absolutely don't accept the job if it's not. (I once signed an unpaid noncompete agreement cause I thought it wouldn't be enforceable. Turns out it was. :-( )
I know a lead quant at a big MMHF who got a 10 year non-compete. not joking
Those are usually pretty specific and more tied to very sensitive IP (and the legal contract is different). If you see what the FTC was proposing (banning non competes) they still had provisions for things like trade secrets. These contracts are usually more specific (not overly broad as far as banning you from working for a competitor) but can effectively have the same impact (I.e., if you have trade secrets related to trading certain assets with certain strategies, good luck working at another fund).
Seems pointlessly long -- if you've been out of work for even just 5 years, it's hard to see another firm hiring you again. Plus whatever trading secrets IP you knew will surely no longer be profitable after that long.
I think that kind of long non-compete isn't intended to stop a rank-and-file employee from going to another company. It's intended to stop a senior partner from quitting and founding a competing firm. If your company ever asks you to sign an agreement that long, it would surely come with a serious golden parachute.
That's crazy. I read an article in business insider that California has few quant firms since enforcing non-compete is almost impossible there (as well as likely taxes), but Voleon tried to do it anyway. 10 years is insane though - maybe he'd have to move to California to get out of it lol
Paywall free link: https://archive.ph/0oyFU
Back to the OP's question -- assuming your non-compete is paid well (*at least* as much as your base salary and hopefully a percentage of your prior year's total comp) then your company does have some incentive to let you out of the contract early so they can stop paying you. They almost certainly will require you to sit out for a while, but it's not unusual for them to waive the non-compete after, say, one year instead of the full two years.
But they probably won't tell you that in advance. They'll try to make you think you're locked up for the full period so you take a job at a non-competitor like Google. Once you're settled there for a year, they might contact you and waive the non-compete going forward so they no longer have to pay you, and they'll hope you're settled enough that you won't bother going back to finance.
But yes, most likely you will need to quit your company without any certainty of how long the non-compete will last, and that makes it hard to already have your next job lined up. Someone could offer you a dream job for 10X the money but you'll have to quit your old job knowing the new offer may not still be valid by the time your non-compete ends, so quitting is a risk. The only thing you can do is demand a reasonable payout during the non-compete period.
Thanks this is very helpful info
How would an employer know if you began your next job that was a competitor? Assuming you don't do anything stupid like updating LinkedIn, for example
Yeah, if you believe the logic of "it's safe to violate my contract because how will they ever know", you could ignore 90% of all contracts and laws, and you'll usually get away with it. But I don't advise that.
For new grad at least, the 3-year non-compete only applies after you finish training and then the non-compete declines until it's only 1-year long where it'll stay. The rationale is that they don't want you to leave right after training.
Does SIG pay out for the portion of the non compete ?
Do you know more about what the training program is like? I have heard it’s quite rigorous
I know a friend on 3 years, it definitely happens at more senior levels. He doesn't think he will be hired in the industry ever again and changed careers into tech. l would avoid taking such a job even if the pay seems good.
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