It happens just about every day in the wild world of investment banking: One bank picks off another bank’s top talent.
Exhibit A: Today, Goldman Sachs sued seven former private wealth management employees recently poached by Credit Suisse (one of whom was reportedly lured away from Goldman with $11 million).
Some argue that poaching talent is unethical; others say it encourages competition.
No matter what you believe, the talent war is here to stay.
So if you’re a potential poachee, you better know the rules of the game.
The first thing you should do when considering a move to a competitor is take a look at your employment contract.
Did you sign a non-compete clause? If so, what are the clause’s details?
It’s not uncommon that employees have forgotten the fine print of the papers they signed when they joined their firm. Not to mention the whereabouts of said papers. So, some digging and searching may be required.
Luckily, these days, most banking professionals don’t sign non-compete clauses and thus are free to leave at-will. Though, in other industries and at the C-suite level across the capitalistic world (even in banking), non-competes are common, requiring departing executives to wait a certain period before joining a competitor.
Once you’ve found your contract and confirmed you’re free to leave without restrictions, you’ll want to check to see if you signed a non-solicitation agreement. If so, you’ll have to be careful how you tell your clients about your imminent departure—Goldman’s current lawsuit against its departing employees cites a breach of such an agreement.
Though it’s fine to tell clients you’re joining a competitor (and to name that firm), it’s not okay to ask them to bring their business with you before you’ve made the jump.
To do that legally, you’ll have to wait until you’re officially not an employee of the firm you’re leaving.
Finally, when you do go, beware of bringing along proprietary information—though not always easily defined, the use of proprietary information is a common ground for lawsuits.
So, if in doubt, leave the recipe of the secret sauce behind when you’re cleaning out your desk.
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Derek Loosvelt is Vault.com’s global finance editor. He has a BS in economics from the Wharton School at the University of Pennsylvania and an MFA in creative writing from The New School. He is a writer and editor and has worked for Brill’s Content and Inside.com. Previously, he worked in investment banking at CIBC and Duff & Phelps.
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