A complaint filed by the National Labor Relations Board (NLRB) against Bridgewater Associates (Bridgewater) cites several provisions from a Bridgewater employment agreement that allegedly violated the rights of employees under the National Labor Relations Act (NLRA). The provisions in question – addressing issues such as confidentiality, non-disparagement and waiver of rights to bring certain actions – have been commonplace in employment agreements generally, particularly at hedge funds, for many years. The NLRB’s complaint illustrates a striking disparity between regulators’ standards and expectations, as codified in the NLRA, and employers’ grasp of what constitutes a legal policy or practice. This article provides a summary of the NLRB complaint, along with analysis from law firm partners and other experts in employment-related matters affecting hedge funds regarding the steps managers can take to anticipate and avoid similar administrative actions. For analysis of other restrictive covenants in employment agreements, see “District Court Decision Suggests That Overly Broad Restrictive Covenants Will Not Be Enforced in Employment Agreements in the Wealth Management Industry
” (Apr. 26, 2012); and “Schulte Roth & Zabel Partners Discuss Non-Competition and Non-Solicitation Provisions and Other Restrictive Covenants in Hedge Fund Manager Employment Agreements
” (Nov. 23, 2011). For analysis of a civil complaint filed by Bridgewater against two former employees, see “Bridgewater Associates Sues Ex-Employees Who Allegedly Seek to Trade Off Its Name and Goodwill”
(Oct. 30, 2014).