zlacker

I’ve heard of some pretty aggressive non-competes in finance, but AFAIU (never worked in Connecticut myself), it’s both the carrot and the stick: you get both paid and a stiff contract if you leave with proprietary alpha between the ears.

In tech I’ve never even heard a rumor of something like this.

>>benree+(OP)
It’s got a term - “garden leave” and yeah it was prevalent in finance. I say “was” because I think some states are changing laws wrt/ non-competes and this calling this practice into question.

>>whitej+h1
The federal government banned non competes last month:

https://www.ftc.gov/news-events/news/press-releases/2024/04/...

>>lotsof+Ka
I think this still leaves garden leave on the table. The thing that can no longer happen is an employer ending it's relationship with an employee and preventing them from continuing their career after the fact. Garden leave was in fact one of the least bad outcomes of a non-compete as I understand it.

>>lotsof+Ka
I don't recall where I saw it, but I believe the FTC clarified and said that garden-leave type arrangements aren't covered under their ban.

>>whitej+h1
No, you're confusing stuff.

First of all, taking any code with you is theft, and you go to jail, like this poor Goldman Sachs programmer [1]. This will happen even if the code has no alpha.

However, noone can prevent you from taking knowledge (i.e. your memories), so reimplementing alpha elsewhere is fine. Of course, the best alpha is that which cannot simply be replicated, e.g. it depends on proprietary datasets, proprietary hardware (e.g. fast links between exchanges), access to cheap capital, etc.

What hedge funds used to do, is give you lengthy non-competes. 6months for junior staff, 1-2y for traders, 3y+ in case of Renaissance Technologies.

In the US, that's now illegal and un-enforceable. So what hedge funds do now, is lengthy garden(ing) leaves. This means you still work for the company, you still earn a salary, and in some (many? all?) cases also the bonus. But you don't go to the office, you can't access any code, you don't see any trades. The company "moves on" (developes/refines its alpha, including your alpha - alpha you created) and you don't.

These lengthy garden leaves replaced non-competes, so they're now 1y+. AFAIK they are enforceable, just as non-competes while being employed always have been.

[1] https://nypost.com/2018/10/23/ex-goldman-programmer-sentence...