spinrealmoneyapp| FTC plans to ban Wall Street competition agreements, but bankers and "gardening leave" are not included

For Wall Street traders and fund managersSpinrealmoneyappIt would be a great disappointment to think that the authorities' crackdown on non-competition agreements will enable them to move to their high-paid competitors without barriers.

The prohibition of competition agreements by the Federal Trade Commission (FTC) does not include mandatory "horticultural leave" (gardening leave). "gardening leave" is often found in contracts for positions that have access to sensitive information, such as financial positions that know the trading strategies of fund managers.

According to a copy of the regulations issued by FTC, it does not constitute a competition clause as long as the employer continues to pay normal wages to former employees during their "gardening leave".

The interpretation of the regulation is that "although employees' job responsibilities, or access to colleagues or access to the workplace may be greatly weakened, they are still employed."

Fearing that many companies would stifle competition for talent, FTC voted on Tuesday to pass a clause close to a total ban on competition. However, this measure has been challenged by industry associations.SpinrealmoneyappThey believe that this undermines efforts to protect confidential information.

Some officials are particularly concerned about the number of low-paid employees limited by competition agreements. In fact, the new rules do not include senior managers who earn more than $151164 a year and hold decision-making positions.

Another problem for bankers is that they do not fall within the jurisdiction of the FTC. But the new rule applies to employees of non-bank institutions such as hedge funds, private equity firms and traditional asset managers.

The concept of "gardening leave" comes from the UK and usually lasts for several months, sometimes longer. This cooling-off period helps ensure that departing employees do not bring information about the current deal to the next job.

Peter Steinmeyer, a lawyer who advises financial services companies, said the FTC rules, if eventually implemented, would encourage more companies to use "gardening leave" instead of competition agreements.

He says "gardening leave" causes relatively few legal disputes because people think it's fair. "who doesn't want to go to Hawaii and surf for 180 days while taking the money?" It's a pretty good deal.