I'm about to mentor a person that worked at Generic Trading for about 8 months. He says that during this time he had to sign a contract that said if he were to quit, he is NOT allowed to retain a job as an equity trader. If he does, he has to pay $25,000. When I heard this I immdediately thought BS... you can't stop someone from pursuing a career. Thoughts on this?
Non-competes are not legally enforceable in this business although firms claims they are. They are mainly a scare tactic.
They may not be enforceable, but the prior company may have written into the contract that the trader assumes "xxx" cost for prior training if said trader leaves the firm prior to contract expiration. Just a thought....
I guess thats assuming that they trained him. But the guy didnt mention that so who knows. Just hire a lawyer to read over the contract and see what you can and cant do. He'll have a better idea than we do.
The thing is... is this even a Generic rule? or some sub branch making this rule up. I always thought Generic was an upstanding company... never heard of this non compete anywhere else. In my opinion it's total crap that anyone can say you can't be a certain profession because you worked here. Just imagine if this held true for other jobs? So what... I can't be a doctor for a year because I worked as a doctor at so and so hospital? That's just ludicrous. My student is exceptionally worried about leaving. He says that the agreement says taht he must reimburse the company for $25,000 for "training" if he leaves to be a trader elsewhere. Funny... $25,000 to quit a job... lol... meanwhile he's not even profitable! Some training that is!
Thats the whole point, they want the trader to be afraid so that he stays. Once he finds out down the road that the non compete is BS he'll have made the firm money in the meantime. Its a different story though if he tries to leave and bring guys with him. Then the firm may have a case for "corporate sabotage". The bottom line is indentured servitude is illegal and thats basically what a non compete is. The firm isnt paying you a salary, they've made no promises about how much $$$ you'll make trading so how can they possibly say you have to pay THEM $25,000 if you leave? You're right, its ludicrous!
does anyone work at generic that can verify this as a policy though? I want to know if this one branch is taking advantage of my student.
I worked for two different generic firms between april '03 and july '05. This was a policy at neither firm.