Non-Compete Agreements

[AbuCordelia]

Hello all,

I was offered a job recently with a prop firm (sorry won't name it) and today I was given a copy of the contract. I have never traded professionally for a firm, only for myself without much consistent returns.

They will be training me for free (when many others are actually paying) which is HUGE in my opinion.

I read through the contract, and there was a clause that stated something along the lines of me not being able to work for another trading company within two years of my contract ending or of me being terminated unless I had written consent.

After thinking about it for some time I realized that in case I actually turn out to be a good trader, I am stuck with this company forever pretty much on their terms. When the contract comes to an end I will have little to no negotiating power because they could invoke that clause and effectively close me out from working for another firm for two years.

I have to say that I appreciate that these guys are offering me a position and I have no intention of getting trained and moving to another company but I'm not comfortable with this clause.

I feel as though this is probably the only company that would take me on in the state that I am in (not a bad state but not the IDEAL candidate for many firms). So to say "if one company will take you another will" won't really fit this situation.

Any opinion will be appreciated.

Thanks,


Abu

 

[trendie]

There are clauses such as the one you mention in employment contracts.
In my previous life as a contractor, they have such things.
But it's usually 6-months or thereabouts.

I believe the challenge to that clause is a thing called restrictive practices.
That is, you cannot be denied a fair chance to work.
You could argue that trading is the only skill that allows you to earn money, and in denying the chance to work they are being restrictive.

Their comeback would be if they thought you were being given proprietary knowledge or technology, and that you are using their intellectual knowledge.

If the information or training they give you is generic, or an industry standard, then it isn't secret, so isn't proprietary.

Don't know if it would be better to just get advice from an employment lawyer, but don't give up the chance to learn to trade. Worry about contract restrictions later.

Key thing to establish is if they will be teaching anything proprietary or generic.

 

[Brumby]

Looks to me to be straight forward.

You are presently not consistently profitable.
If your track record improves - likely it is due to their training
In future, you can't jump ship but you have an option to return to status quo i.e. trade for yourself but probably with better results
If you don't improve and they fire you, nothing has change except you revert to as before.

There is no downside. The scenario that you are concern about is not a reality at the moment. Deal with what is in front of you.

 

[AbuCordelia]

I agree with both of you. Thanks for the input

Abu

 

[A Dashing Blade]

I read through the contract, and there was a clause that stated something along the lines of me not being able to work for another trading company within two years of my contract ending or of me being terminated unless I had written consent.
. . .

Personally I'd wouldn't hesistateto sign.
UK based? 2 years is an absolutely un-enforcable "restictive practice" clause, have been a few court cases (banking/finance related) where this sort of time-frame has been thrown out. 6 months tops (pretty sure that's what Optiver enforce) is realistic, and that's only enforcable for top-people.