are employment contracts pretty common?

Discussion in 'Prop Firms' started by rbenedict, Jul 12, 2006.

  1. rbenedict


    just received my first offer, and there is a contract that pretty much says that I cannot trade for any other firm for 2 years after I leave the company. the contract is full of other caveats as well. is this the standard for entry-level trading positions?

  2. Who is this with, that is insane. No I have never heard of anything like that. That would never even be enforceable.
  3. rbenedict


    this is for maverick trading out of chicago
  4. I would ask them what their reasoning is. No judge in the world would hold you to that contract. Are they a prop firm that requires an initial deposit of capital ?
  5. Avoid that contract at all costs.
  6. rbenedict


    here was their reasoning:

    "One thing to keep in mind when going over the contract is that the entire reason for the contract is that after the time, capital, training, etc. that we invest in each trader we hire, our worst nightmare is that after assuming the risk during the trader's learning period, the trader leaves to go somewhere else once he becomes profitable. In that case we assume all the risk with none of the rewards, so the contract is in place to protect us from that event. "

    as far as the capital goes, no deposit is required. i initially turned down the job offer because the contract scared the crap out of me. plus since it was my first offer for a trading job, i had no other offer or contract to compare it to, so i had no way of knowing how good or bad it was.
  7. That is true with any position, in any capacity, with any employeer , anywhere on earth. The employeer always assumes a risk of flight. I have never heard of a contract that tried to restrict your choice of profession. The thing you have to remember is the odds they want to go before a judge are very remote, but I would ask them to strike it and see what they say.
  8. Maverick used to have a sketchy way of locking traders down by holding a percentage of their profits for a year (and then keeping it if they felt slighted). Seems they're switching to the non-compete, which has been effective in scaring new traders into indentured servitude at other firms. The remaining firms that do this tend to keep your commissions high because there's no incentive for them to be competitive and they know you there's nothing you can do about it.

    Really, the only way to avoid deals like this is to put up a deposit (or go with a firm like Swift for the time being). Your trading and psychology will suffer otherwise.
  9. I might also try to get in writing the exact training they will supply. That way if they don't live up to their end, you can claim grounds for voiding your contract.
  10. I believe this has alot to do with states deemed as right to work, such CA and CO where I am at now. They should not be able to enforce a contract that would unreasonable prevent you from making aliving in your given field as long as you aren't using proprietary info against them. I ran into this will sales when I switched co's in telecom. They bluffed and backed down when I called them on it.
    #10     Jul 13, 2006